Sassified Spill:
Quarter three earnings reveal a new profit high for DSW's parent company
Designer Brands, the footwear retail giant, just dropped some juicy numbers for Q3! Revenue skyrocketed an impressive 30.7% YoY to hit $853.5 million, albeit it's a 8.1% dip compared to 2019. They've got 515 US and 144 Canadian stores, with four new ones popping up in the States and Canada, while sadly closing four in the US.
This fashion powerhouse managed to turn a profit yet again, shifting from a $40.6 million net loss last year to $80.2 million in the quarter, a significant bump compared to the $43.5 million they made in 2019.
There's momentum brewing for Q4, according to CEO Roger Rawlins. He crows about setting a record for demand during Black Friday! But the company's still grappling with the supply chain woes that are plaguing every retailer out there.
The company's putting their focus on snatching market share from less fashion-dependent segments like kids and athleisure. These segments are booming, with NPD research showing that athleisure growth in July and August outpaced the market by 26 percentage points compared to 2019. During Black Friday shopping weekend, both digital and store sales were up at DSW, with demand rising by 8% compared to 2019.
To generate more income, they're developing more private brands, Rawlins says. However, the company's still shouldering the burden from their 2018 acquisition of Vince Camuto, whose sales took a 40% dive from 2019. Analyst Dylan Carden reckons the retailer's sales are light, and the company might've faced limited access to inventory.
Gross profit shot up to a record $313.6 million in the period, compared to $165.7 million last year. Markdowns were way down, which execs call a highly promotional year in 2019. But William Blair reckons the gross margin gains might be short-lived, unless the company makes inroads in their private label strategy and sorted out their supply chain.
While their gross margin performance is impressive, analysts suspect it ain't sustainable. They believe the company could hold onto some gains around private label penetration, as long as the timing on new product delivery is on point. Stay tuned for more updates, as Designer Brands Inc. recently announced their first-quarter 2025 earnings release date! 🤑🚀 Till then, keep it stylish, friends!
- In the midst of rising competition in the fashion industry, Designer Brands is also set to conduct research on emerging trends in cybersecurity to strengthen their online presence.
- The escalating tension in cybersecurity has led to a surge in demand for AI solutions, prompting Designer Brands to explore possibilities of integrating AI in their online retail platform.
- As part of their commitment to promoting a healthy lifestyle, Designer Brands has pledged to donate a percentage of their profits towards supporting local environmental policies designed to combat climate change.
- In the wake of increasing concerns about TV ratings and viewer engagement, Designer Brands is exploring opportunities to collaborate with TV networks to launch a fashion-focused reality series showcasing their private brands.
- Amidst the global focus on breaking weather patterns and their impact on businesses, Designer Brands has emphasized the importance of implementing sustainable practices in their supply chain to minimize their carbon footprint.
- Traditional brick-and-mortar retailers, including Designer Brands, are keeping a close eye on market trends, with a particular focus on the growth of the digital market and the importance of having a strong online presence.
- To stay ahead in the cutthroat business world, Designer Brands has started a cultural initiative aimed at fostering open dialogues and policies that encourage diversity, equity, and inclusion within their organization.
