EX-99.1 2 q320258-kex991pressrelease.htm EX-99.1 Document
Exhibit 99.1
Designer Brands Inc. Reports Third Quarter 2025 Financial Results
Generated diluted earnings per share ("EPS") of $0.35 and adjusted diluted EPS of $0.38, both up over 40% compared to the same period last year
Delivered 210-basis point improvement in gross margin over the same period last year
Fiscal 2025 adjusted operating income expected to be in range of $50.0 million to $55.0 million

COLUMBUS, Ohio, December 9, 2025 - Designer Brands Inc. (NYSE: DBI) (the "Company," "we," "us," "our," and "Designer Brands"), one of the world's largest designers, producers, and retailers of footwear and accessories, today announced financial results for the third quarter ended November 1, 2025.

"Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics," stated Doug Howe, Chief Executive Officer. "Stronger consumer demand and improved in-store execution drove improved comparable sales in the third quarter compared to the second quarter. Our team also delivered a meaningful increase in gross profit and diligently managed expenses, which helped drive an increase in operating income over last year."

Howe continued, "I'm encouraged that this positive momentum has extended into the early part of the fourth quarter, reinforcing the progress of our strategic initiatives and positioning us well as we close out the year. While macroeconomic pressures persist, we are confident in our ability to navigate the near-term environment and continue making progress on our long-term strategies."

Third Quarter Operating Results (Unless otherwise stated, all comparisons are to the third quarter of 2024)
•Net sales decreased 3.2% to $752.4 million.
•Total comparable sales decreased by 2.4%.
•Gross profit increased to $339.6 million versus $333.8 million last year, and gross margin was 45.1% compared to 43.0% last year.
•Reported net income attributable to Designer Brands Inc. was $18.2 million, or diluted EPS of $0.35.
•Adjusted net income was $19.6 million, or adjusted diluted EPS of $0.38.



Liquidity
•Cash and cash equivalents totaled $51.4 million at the end of the third quarter of 2025, compared to $36.2 million at the end of the same period last year, with $166.9 million available for borrowings under our senior secured asset-based revolving credit facility. Debt totaled $469.8 million at the end of the third quarter of 2025 compared to $536.3 million at the end of the same period last year.
•The Company ended the third quarter with inventories of $620.0 million compared to $637.0 million at the end of the same period last year.

Return to Shareholders
A dividend of $0.05 per share for both Class A and Class B common shares will be paid on December 19, 2025 to shareholders of record at the close of business on December 5, 2025.

Store Count
(square footage in thousands)November 1, 2025November 2, 2024
Number of StoresSquare FootageNumber of StoresSquare Footage
U.S. Retail segment - DSW stores497 9,759 496 9,784 
Canada Retail segment:
The Shoe Co. stores120 612 125 638 
Rubino stores28 147 28 149 
DSW stores27 528 26 511 
175 1,287 179 1,298 
Total number of stores672 11,046 675 11,082 


Fiscal 2025 Financial Outlook
The Company expects the following for fiscal 2025:
Metric
 2025 Guidance
Designer Brands Net SalesDown 3% - 5%
Adjusted Operating Profit$50.0 million - $55.0 million
Adjusted Income Tax Expense$8.0 million - $10.0 million




Forward-looking adjusted operating income excludes potential charges or gains that may be recorded during the fiscal year, including among other things restructuring costs, including severance charges, and impairment charges. Forward-looking adjusted income tax expense excludes the net tax impact of such items and the potential change in the valuation allowance on deferred tax assets. A reconciliation of these forward-looking non-GAAP amounts to the comparable GAAP measure is not provided, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items are uncertain and could have a substantial impact on GAAP measures of our financial performance. For additional information regarding the use of non-GAAP measures, refer to the Non-GAAP Measures section below.

Webcast and Conference Call
The Company is hosting a conference call today at 8:30 am Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-888-317-6003, or the international dial-in, 1-412-317-6061, and reference conference ID number 7491258 approximately ten minutes prior to the start of the conference call. The conference call will also be broadcast live over the internet and can be accessed through the following link, as well as through the Company's investor website at investors.designerbrands.com:
https://app.webinar.net/GvlLzdE2OoM

For those unable to listen to the live webcast, an archived version will be available on the Company's investor website until December 23, 2025. A replay of the teleconference will be available by dialing the following numbers:
U.S.: 1-877-344-7529
Canada: 1-855-669-9658
International: 1-412-317-0088
Passcode: 2491453
Important information may be disseminated initially or exclusively via the Company’s investor website; investors should consult the website to access this information.



About Designer Brands
Designer Brands is one of the world's largest designers, producers, and retailers of the most recognizable footwear brands and accessories, transforming and defining the footwear industry through a mission of being shoe obsessed. With a diversified, world-class portfolio of coveted brands, including Topo Athletic, Keds, Vince Camuto, Kelly & Katie, Jessica Simpson, Lucky Brand, Mix No. 6, Crown Vintage and others, Designer Brands designs and produces on-trend footwear and accessories for all of life's occasions delivered to the consumer through a robust direct-to-consumer omni-channel infrastructure and powerful national wholesale distribution. Powered by a billion-dollar digital commerce business across multiple domains and over 670 DSW Designer Shoe Warehouse, The Shoe Co., and Rubino stores in North America, Designer Brands delivers current, in-line footwear and accessories from the largest national brands in the industry and holds leading market share positions in key product categories across women's, men's, and kids'. Designer Brands also distributes its brands internationally through select wholesale and distributor relationships while also leveraging design and sourcing expertise to build private label products for national retailers. Designer Brands is committed to being a difference maker in the world and the footwear industry. By leading with our corporate values of We Belong and We Do What's Right, Designer Brands supports the global community and the health of the planet by donating more than twelve million pairs of shoes to the global non-profit Soles4Souls since 2018. To learn more, visit www.designerbrands.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain statements in this press release may constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "could," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," "guidance," or the negative version of those words or other comparable words. These statements are based on the Company's current views and expectations and involve known and unknown risks, uncertainties, and other factors, many of which are outside of the Company's control, that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: uncertain general economic and financial conditions, including economic volatility and potential downturn or recession, supply chain disruptions,


new or increased tariffs and other barriers to trade, fluctuating interest rates, unemployment rates and inflationary pressures, and the related impacts to consumer discretionary spending, as well as our ability to plan for and respond to the impact of these conditions; our ability to anticipate and respond to rapidly changing consumer preferences, seasonality, customer expectations, and fashion trends; the impact on our consumer traffic and demand, our business operations, and the operations of our suppliers, as we experience unseasonable weather, climate change evolves, and the frequency and severity of weather events increases; our ability to execute on our business strategies, including growing our Brand Portfolio segment, enhancing in-store and digital shopping experiences, and meeting consumer demands; our ability to successfully and efficiently integrate acquisitions in a manner that does not impede growth; our ability to maintain strong relationships with our suppliers, vendors, licensors, and retailer customers; risks related to losses or disruptions associated with our distribution systems, including our distribution centers and stores, whether as a result of reliance on third-party providers or otherwise; risks related to cyber security threats and privacy or data security breaches or the potential loss or disruption of our information technology ("IT") systems, or those of our vendors; risks related to the implementation of new or updated IT systems; our ability to protect our reputation and to maintain the brands we license; our reliance on our reward programs and marketing to drive traffic, sales, and customer loyalty; our ability to successfully integrate new hires or changes in leadership and retain our existing management team, and to continue to attract qualified new personnel; risks related to restrictions imposed by our senior secured asset-based revolving credit facility, as amended, and our senior secured term loan credit agreement, as amended, that could limit our ability to fund our operations; our competitiveness with respect to style, price, brand availability, shopping platforms, and customer service; risks related to our international operations and our reliance on foreign sources for merchandise; our ability to comply with laws and regulations, as well as other legal obligations; risks associated with climate change and other corporate responsibility issues; and uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation. Risks and other factors that could cause our actual results to differ materially from our forward-looking statements are described in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025 or our other reports made or filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the time when made. Except as may be required by applicable law, the Company undertakes no obligation to update or revise the forward-looking statements included in this press release to reflect any future events or circumstances.


DESIGNER BRANDS INC.
SEGMENT RESULTS
(unaudited)

Net Sales
Three months ended
(dollars in thousands)November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%
Segment net sales:
U.S. Retail $610,462 77.3 %$615,495 75.9 %$(5,033)(0.8)%
Canada Retail 77,279 9.8 %83,504 10.3 %(6,225)(7.5)%
Brand Portfolio
101,923 12.9 %111,492 13.8 %(9,569)(8.6)%
Total segment net sales789,664 100.0 %810,491 100.0 %(20,827)(2.6)%
Elimination of intersegment net sales(37,253)(33,297)(3,956)11.9 %
Consolidated net sales$752,411 $777,194 $(24,783)(3.2)%

Nine months ended
(dollars in thousands)November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%
Segment net sales:
U.S. Retail$1,794,628 79.0 %$1,878,556 78.1 %$(83,928)(4.5)%
Canada Retail206,261 9.1 %213,813 8.9 %(7,552)(3.5)%
Brand Portfolio
270,978 11.9 %311,615 13.0 %(40,637)(13.0)%
Total segment net sales2,271,867 100.0 %2,403,984 100.0 %(132,117)(5.5)%
Elimination of intersegment net sales(92,785)(108,294)15,509 (14.3)%
Consolidated net sales$2,179,082 $2,295,690 $(116,608)(5.1)%

Comparable Sales
Three months ended Nine months ended
November 1, 2025November 2, 2024November 1, 2025November 2, 2024
Change in comparable sales:
U.S. Retail segment(1.5)%(2.8)%(4.6)%(2.1)%
Canada Retail segment(6.6)%(4.6)%(5.2)%(4.2)%
Brand Portfolio segment - direct-to-consumer channel(21.5)%(7.5)%(25.9)%(5.8)%
Total(2.4)%(3.1)%(5.1)%(2.3)%




Gross Profit
Three months ended
(dollars in thousands)November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%Basis Points
Segment gross profit:
U.S. Retail$275,635 45.2 %$264,384 43.0 %$11,251 4.3 %220
Canada Retail34,340 44.4 %37,181 44.5 %(2,841)(7.6)%(10)
Brand Portfolio28,968 28.4 %31,313 28.1 %(2,345)(7.5)%30
Total segment gross profit338,943 42.9 %332,878 41.1 %6,065 1.8 %180
Net recognition of intersegment gross profit676 937 (261)
Consolidated gross profit$339,619 45.1 %$333,815 43.0 %$5,804 1.7 %210

Nine months ended
(dollars in thousands)November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%Basis Points
Segment gross profit:
U.S. Retail$782,953 43.6 %$821,708 43.7 %$(38,755)(4.7)%(10)
Canada Retail94,694 45.9 %98,642 46.1 %(3,948)(4.0)%(20)
Brand Portfolio74,147 27.4 %91,425 29.3 %(17,278)(18.9)%(190)
Total segment gross profit951,794 41.9 %1,011,775 42.1 %(59,981)(5.9)%(20)
Net recognition (elimination) of intersegment gross profit5,884 (8,400)14,284 
Consolidated gross profit$957,678 43.9 %$1,003,375 43.7 %$(45,697)(4.6)%20

Intersegment Eliminations
Three months ended
(in thousands)November 1, 2025November 2, 2024
Intersegment recognition and elimination activity:
Elimination of net sales recognized by Brand Portfolio segment$(37,253)$(33,297)
Cost of sales:
Elimination of cost of sales recognized by Brand Portfolio segment28,929 23,823 
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period9,000 10,411 
$676 $937 


Nine months ended
(in thousands)November 1, 2025November 2, 2024
Intersegment recognition and elimination activity:
Elimination of net sales recognized by Brand Portfolio segment$(92,785)$(108,294)
Cost of sales:
Elimination of cost of sales recognized by Brand Portfolio segment68,528 76,090 
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period30,141 23,804 
$5,884 $(8,400)

Operating Profit
Three months ended
(dollars in thousands)
November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%Basis Points
Segment operating profit:
U.S. Retail$66,202 10.8 %$60,507 9.8 %$5,695 9.4 %100 
Canada Retail6,756 8.7 %10,478 12.5 %(3,722)(35.5)%(380)
Brand Portfolio8,256 8.1 %7,747 6.9 %509 6.6 %120 
Total segment operating profit81,214 10.3 %78,732 9.7 %2,482 3.2 %60 
Corporate/eliminations(38,551)(55,916)17,365 (31.1)%
Consolidated operating profit$42,663 5.7 %$22,816 2.9 %$19,847 87.0 %280 

Nine months ended
(dollars in thousands)
November 1, 2025November 2, 2024Change
Amount% of Segment Net SalesAmount% of Segment Net SalesAmount%Basis Points
Segment operating profit:
U.S. Retail$166,021 9.3 %$202,281 10.8 %$(36,260)(17.9)%(150)
Canada Retail15,619 7.6 %22,698 10.6 %(7,079)(31.2)%(300)
Brand Portfolio7,241 2.7 %7,650 2.5 %(409)(5.3)%20 
Total segment operating profit188,881 8.3 %232,629 9.7 %(43,748)(18.8)%(140)
Corporate/eliminations(126,897)(171,842)44,945 (26.2)%
Consolidated operating profit $61,984 2.8 %$60,787 2.6 %$1,197 2.0 %20 



DESIGNER BRANDS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)

Three months ended Nine months ended
November 1, 2025November 2, 2024November 1, 2025November 2, 2024
Net sales$752,411 $777,194 $2,179,082 $2,295,690 
Cost of sales(412,792)(443,379)(1,221,404)(1,292,315)
Gross profit339,619 333,815 957,678 1,003,375 
Operating expenses(300,056)(296,827)(899,380)(933,851)
Income from equity investments3,100 3,584 8,105 9,019 
Impairment charges— (17,756)(4,419)(17,756)
Operating profit42,663 22,816 61,984 60,787 
Interest expense, net(11,420)(11,565)(34,955)(34,161)
Non-operating expenses, net(34)(260)(104)(512)
Income before income taxes31,209 10,991 26,925 26,114 
Income tax benefit (provision)(11,891)2,223 (13,462)2,067 
Net income19,318 13,214 13,463 28,181 
Net income attributable to redeemable noncontrolling interest(1,103)(202)(1,845)(562)
Net income attributable to Designer Brands Inc.$18,215 $13,012 $11,618 $27,619 
Diluted earnings per share attributable to Designer Brands Inc.$0.35 $0.24 $0.23 $0.48 
Weighted average diluted shares 51,532 53,486 49,998 57,116 



DESIGNER BRANDS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)

November 1, 2025February 1, 2025November 2, 2024
ASSETS
Current assets:
Cash and cash equivalents$51,352 $44,752 $36,227 
Receivables, net64,376 50,371 70,570 
Inventories620,008 599,751 637,012 
Prepaid expenses and other current assets36,623 39,950 56,864 
Total current assets772,359 734,824 800,673 
Property and equipment, net221,081 208,199 212,206 
Operating lease assets701,895 701,621 707,544 
Goodwill130,607 130,386 130,649 
Intangible assets, net81,090 84,639 85,854 
Deferred tax assets37,672 43,324 39,656 
Equity investments59,940 56,761 53,358 
Other assets48,345 49,470 50,824 
Total assets$2,052,989 $2,009,224 $2,080,764 
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$249,421 $271,524 $238,040 
Accrued expenses180,580 152,153 167,601 
Current maturities of long-term debt6,750 6,750 6,750 
Current operating lease liabilities173,510 159,924 155,220 
Total current liabilities610,261 590,351 567,611 
Long-term debt463,089 484,285 529,551 
Non-current operating lease liabilities628,084 635,076 644,303 
Other non-current liabilities48,671 17,737 17,521 
Total liabilities1,750,105 1,727,449 1,758,986 
Redeemable noncontrolling interest4,317 3,284 3,272 
Total shareholders' equity298,567 278,491 318,506 
Total liabilities, redeemable noncontrolling interest, and shareholders' equity$2,052,989 $2,009,224 $2,080,764 



DESIGNER BRANDS INC.
NON-GAAP RECONCILIATION
(unaudited and in thousands, except per share amounts)

Three months ended Nine months ended
November 1, 2025November 2, 2024November 1, 2025November 2, 2024
Operating expenses$(300,056)$(296,827)$(899,380)$(933,851)
Non-GAAP adjustments:
Restructuring and integration costs3,796 2,936 9,883 10,114 
Acquisition-related costs— 82 — 2,154 
Total non-GAAP adjustments3,796 3,018 9,883 12,268 
Adjusted operating expenses$(296,260)$(293,809)$(889,497)$(921,583)
Operating profit$42,663 $22,816 $61,984 $60,787 
Non-GAAP adjustments:
Restructuring and integration costs3,796 2,936 9,883 10,114 
Acquisition-related costs— 82 — 2,154 
Impairment charges— 17,756 4,419 17,756 
Total non-GAAP adjustments3,796 20,774 14,302 30,024 
Adjusted operating profit$46,459 $43,590 $76,286 $90,811 
Net income attributable to Designer Brands Inc.$18,215 $13,012 $11,618 $27,619 
Non-GAAP adjustments:
Restructuring and integration costs3,796 2,936 9,883 10,114 
Acquisition-related costs— 82 — 2,154 
Impairment charges
— 17,756 4,419 17,756 
Foreign currency transaction losses34 260 104 512 
Total non-GAAP adjustments before tax effect3,830 21,034 14,406 30,536 
Tax effect on above non-GAAP adjustments(4,373)(19,478)(4,116)(22,025)
Valuation allowance change on deferred tax assets844 (306)74 (348)
Total non-GAAP adjustments, after tax301 1,250 10,364 8,163 
Net income attributable to redeemable noncontrolling interest1,103 202 1,845 562 
Adjusted net income $19,619 $14,464 $23,827 $36,344 
Diluted earnings per share$0.35 $0.24 $0.23 $0.48 
Adjusted diluted earnings per share$0.38 $0.27 $0.48 $0.64 

Non-GAAP Measures
To supplement amounts presented in our consolidated financial statements determined in accordance with accounting principles generally accepted in the U.S. ("GAAP"), the Company uses certain non-GAAP financial measures, including adjusted operating expenses, adjusted operating profit, adjusted income tax, adjusted net income, and adjusted diluted earnings per share, which may be shown in the table above. These measures adjust for the effects of: (1) restructuring and integration costs, including severance charges; (2) acquisition-related costs; (3) impairment charges; (4) foreign currency transaction losses; (5) the net tax impact of such items; (6) the change in


the valuation allowance on deferred tax assets; and (7) net income attributable to redeemable noncontrolling interest. The unaudited adjusted results should not be construed as an alternative to the reported results determined in accordance with GAAP. These financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures presented by other companies. The Company believes that these non-GAAP financial measures provide useful information to both management and investors to increase comparability to prior periods by adjusting for certain items that may not be indicative of core operating measures and to better identify trends in our business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company compared to prior periods, when reviewed in conjunction with the Company's GAAP statements. These amounts are not determined in accordance with GAAP and therefore should not be used exclusively in evaluating the Company's business and operations.

Comparable Sales Performance Metric
We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the U.S. Retail and Canada Retail segments. Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.

CONTACT: Stacy Turnof, DesignerBrandsIR@edelman.com