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Designer Brands Inc (DBI)
NYSE:DBI
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Designer Brands
(NYSE:DBI)
Rating:58Neutral
Price Target:
$4.50
▼(-4.26% Downside)
Positive Factors
Strategic Partnership
The partnership with DoorDash has introduced approximately 85% new customers to DSW, indicating a strategic expansion of the customer base and potential for increased sales through new channels.
Product Category Growth
The women's dress category showed a 5% comp increase, a 900 basis point improvement, highlighting successful category focus and potential for revenue growth in a key segment.
Debt Reduction
Reducing debt levels enhances financial stability and flexibility, allowing for better resource allocation and potential investment in growth opportunities.
Negative Factors
Sales Decline
A decline in sales indicates challenges in maintaining market share and revenue growth, which could impact long-term profitability and competitive positioning.
High Leverage
High leverage poses a risk to financial health, limiting flexibility and increasing vulnerability to economic downturns, which can affect long-term sustainability.
Profitability Challenges
Negative profitability margins highlight operational inefficiencies and the need for strategic adjustments to improve financial performance and shareholder value.
Designer Brands (DBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$232.86M
Dividend Yield4.26%
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)1.76
Revenue Growth-4.63%
EPS Growth-637.55%
CountryUS
Employees14,000
SectorConsumer Cyclical
Sector Strength81
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.34
Shares Outstanding41,810,745
10 Day Avg. Volume1,423,109
30 Day Avg. Volume1,122,294
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.97
Price to Sales (P/S)0.09
P/FCF Ratio3.09
Enterprise Value/Market Cap6.17
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit1.02
Enterprise Value/Ebitda-591.40
Forecast
1Y Price Target
$4.50Price Target Upside-4.26% Downside
Rating ConsensusHold
Number of Analyst Covering3
Designer Brands Business Overview & Revenue Model
Company DescriptionDesigner Brands Inc. (DBI) is a leading retailer of footwear and accessories, primarily operating under the DSW (Designer Shoe Warehouse) brand. The company focuses on delivering a wide array of branded and private-label footwear for men, women, and children, as well as accessories such as handbags and socks. Operating both physical stores and an online platform, DBI caters to a diverse customer base across various market segments, emphasizing both style and affordability.
How the Company Makes MoneyDesigner Brands generates revenue primarily through the sale of footwear and accessories in its retail locations and e-commerce channels. The company's revenue model is built on a combination of direct sales, private-label product offerings, and branded merchandise from various well-known manufacturers. Key revenue streams include in-store sales, online sales, and membership programs that encourage repeat customers. Additionally, DBI benefits from partnerships with various brands that allow for exclusive product offerings and seasonal collections, which can drive higher traffic and sales. The company also leverages its loyalty program to enhance customer retention and increase average transaction values.
Designer Brands Earnings Call Summary
Earnings Call Date:Sep 09, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic improvements and positive trends, particularly in specific product categories and brand partnerships. However, the overall sales decline and the impact of macroeconomic headwinds such as tariffs present ongoing challenges. With significant improvements in targeted areas and strategic initiatives, the sentiment leans towards the positive, though tempered by the broader economic context.Q2-2025 Updates
Positive Updates
Improvement in Women's Dress Category
The women's dress category delivered a positive 5% comp, which is a 900 basis point improvement from the first quarter, and represents a significant part of the business at almost 12% of total sales.
Successful New Partnership with DoorDash
Approximately 85% of transactions from the DoorDash marketplace so far represent new customers to DSW.
Top Performing Brands
The top eight brands outperformed the balance of the chain with a positive 1% comp for the quarter, accounting for 45% of total sales.
Social Engagement and Marketing Initiatives
Social engagement continued to climb in Q2, fueled by stronger content strategies and creator partnerships.
Debt Reduction
The company paid down debt to end fiscal August with outstanding debt of $476.1 million.
Expansion in Topo Athletic
Topo Athletic posted a 45% growth in sales year over year.
New Store Format and Brand Repositioning
Unveiled a reimagined DSW store in Framingham, Massachusetts, with immersive, playful elements designed to drive deeper customer engagement.
Negative Updates
Overall Sales Decline
Total sales for the quarter were down 4% year over year, with a 5% decline in comparable sales.
Decline in Brand Portfolio Sales
Sales in the brand portfolio segment were down 24% compared to last year, largely driven by lower internal sales.
Impact of Tariffs and Consumer Caution
Uncertainties related to tariffs and continued consumer caution around discretionary spending led to withholding full-year guidance.
Company Guidance
In the second quarter of fiscal year 2025, Designer Brands Inc. reported a 4.2% decline in net sales year-over-year to $739.8 million, with comparable sales down 5%. This marked a 280 basis point improvement in comparable sales from the first quarter. Adjusted operating expenses decreased by over $14 million, achieving a 350 basis point leverage compared to Q1. Despite a 5% decline in U.S. retail comps, the company noted a 1% increase in store conversion rates, driven by a strategic focus on inventory depth and marketing investments. The women's dress category outperformed with a 5% positive comp, a 900 basis point improvement from the prior quarter. In the Canadian retail segment, sales were flat year-over-year with a positive comp in July. The brand portfolio's external wholesale business grew by 7%, despite a 24% decline in internal sales. The company continued to withhold full-year guidance due to macroeconomic uncertainties, including tariffs and consumer spending caution. However, it remains focused on executing its strategy, with a targeted $20-$30 million reduction in expenses for fiscal 2025.Designer Brands Financial Statement Overview
Summary
Designer Brands faces challenges with profitability and leverage, as indicated by a negative net profit margin and high debt-to-equity ratio. However, the company maintains positive operating cash flows, suggesting some efficiency in cash conversion.Income Statement
Designer Brands demonstrates moderate performance in its income statement. The TTM Gross Profit Margin is 45.28%, indicating decent profitability. However, with a TTM Net Profit Margin of -0.97%, the company struggles with net losses, primarily due to declining EBIT and EBITDA margins. The revenue growth trajectory shows a decrease, reflecting challenges in maintaining revenue levels.55
Neutral
Balance Sheet
The balance sheet shows a relatively high Debt-to-Equity Ratio of 5.00, indicating significant leverage and potential risk. The Return on Equity has weakened, negatively impacted by net losses. The Equity Ratio of 12.76% highlights a low proportion of equity, suggesting vulnerability in financial stability.60
Neutral
Cash Flow
Cash flow health is moderate, with positive operating cash flow and a Free Cash Flow to Net Income Ratio of 1.37 in TTM, suggesting some efficiency in converting earnings to cash. However, the Free Cash Flow Growth Rate is negative, indicating recent declines in cash flow generation.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.92B | 3.01B | 3.07B | 3.32B | 3.20B | 2.23B |
| Gross Profit | 1.41B | 1.29B | 974.89M | 1.08B | 1.07B | 311.24M |
| EBITDA | -2.43M | 99.53M | 138.51M | 255.94M | 283.15M | -496.59M |
| Net Income | -31.75M | -10.55M | 29.06M | 162.68M | 154.48M | -488.72M |
Balance Sheet | ||||||
| Total Assets | 2.06B | 2.01B | 2.08B | 2.01B | 2.01B | 1.98B |
| Cash, Cash Equivalents and Short-Term Investments | 44.94M | 44.75M | 49.17M | 58.77M | 72.69M | 59.58M |
| Total Debt | 1.32B | 1.29B | 1.24B | 1.10B | 1.02B | 1.26B |
| Total Liabilities | 1.78B | 1.73B | 1.71B | 1.58B | 1.60B | 1.73B |
| Stockholders Equity | 280.80M | 278.49M | 359.22M | 429.75M | 412.40M | 243.02M |
Cash Flow | ||||||
| Free Cash Flow | 43.54M | 87.27M | 107.40M | 146.45M | 138.40M | -184.91M |
| Operating Cash Flow | 61.41M | 82.24M | 162.40M | 201.43M | 171.43M | -153.79M |
| Investing Cash Flow | -39.87M | -62.67M | -182.49M | -88.12M | -35.03M | 2.63M |
| Financing Cash Flow | -15.24M | -22.09M | 10.48M | -128.48M | -121.49M | 122.95M |
Designer Brands Technical Analysis
Positive
4.70
Price Trends
3.28
Positive
3.14
Positive
3.87
Positive
Market Momentum
0.37
Negative
69.46
Neutral
67.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBI, the sentiment is Positive. The current price of 4.7 is above the 20-day moving average (MA) of 3.75, above the 50-day MA of 3.28, and above the 200-day MA of 3.87, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 69.46 is Neutral, neither overbought nor oversold. The STOCH value of 67.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DBI.
Designer Brands Risk Analysis
Designer Brands disclosed 20 risk factors in its most recent earnings report. Designer Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Designer Brands Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $664.89M | 10.70 | 9.69% | 2.39% | -6.42% | -19.27% | |
66 Neutral | $867.69M | 166.10 | 6.23% | 6.75% | 7.84% | -81.20% | |
62 Neutral | $354.51M | ― | -4.81% | ― | 2.66% | -4772.54% | |
62 Neutral | $286.48M | ― | -13.32% | ― | 3.32% | 25.71% | |
61 Neutral | $17.83B | 12.89 | -1.60% | 3.03% | 1.39% | -14.45% | |
58 Neutral | $232.86M | ― | -9.98% | 4.26% | -4.63% | -637.55% | |
44 Neutral | $2.29B | 194.63 | -13.84% | ― | -3.58% | -4.20% |
* Consumer Cyclical Sector Average
Performance Comparison
DBI
Designer Brands
4.70
-0.28
-5.62%
CTRN
Citi Trends
34.54
18.67
117.64%
FL
Foot Locker
24.01
-1.35
-5.32%
GCO
Genesco
32.89
8.66
35.74%
GES
Guess?
16.66
-0.37
-2.17%
SCVL
Shoe Carnival
23.84
-14.41
-37.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.