Designer Brands’ third-quarter sales surged 30.7% to $853.5 million.
Designer Brands Inc. reported better-than-expected third-quarter earnings along with “record-setting” margin expansion.
The footwear and accessories retailer’s net income totaled $80.2 million, or $1.04 per share, for the quarter ended Oct. 30, compared to a loss of $40.6 million, or $0.56 per share, in the year-ago quarter. Adjusted earnings per share of $0.86 topped past analysts’ estimates of $0.56.
Sales rose 30.7% to $853.5 million, missing estimates of $895.6 million. Comparable sales increased 40.8%.
Designer Brands said its gross profit increased to a record $313.6 million in the quarter versus $165.7 million last year. Gross margin as a percentage of net sales was a record 36.7% as compared to 25.4% for the same period last year and 29.3% for the third quarter of fiscal 2019.
“We continue to see strength in our key assortment distortion areas including athletic and athleisure, kid's, and men's, all powered by the Top 50 Brands in footwear, as well as a return to growth in our vertical brands,” said CEO Roger Rawlins. “This drove record-setting margin expansion in the third quarter and our expectation is that these areas will continue to drive our long-term margin profile with these shifts being a permanent part of our go-forward model.”
For the fourth quarter, the company expects net sales to be flat to up low-single digits and earnings per share to range from $0.10 to $0.15.
"We are energized by the strength of our strategy and our record-setting results, despite unseasonably warm weather and industry-wide supply chain challenges,” Rawlins said. “Looking forward, we are continuing to focus on our three key strategic pillars – customer, brand, and speed – to remove friction, acquire new customers, evolve our assortment to match consumer preferences, and move product to our customers faster and more efficiently."
Designer Brands operates nearly 700 stores under the DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse banners. The Company designs and produces footwear and accessories through Camuto Group, a leading manufacturer selling in more than 5,400 stores worldwide.
Camuto Group owns licensing rights for the Jessica Simpson footwear business and footwear and handbag licenses for Lucky Brand In partnership with a joint venture with Authentic Brands Group, the Company also owns a stake in Vince Camuto, Louise et Cie and others.
Designer Brands is the parent company for DSW Designer Shoe Warehouse and designs shoes for Camuto Group.