Designer Brands Shares Slip Post Mixed Q4 Results, Guides FY23 EPS Below Consensus

Designer Brands Inc DBI reported a fourth-quarter FY22 sales decrease of 7.5% year-over-year to $750.6 million, missing the consensus of $791.81 million.
Comparable sales decreased 5.5% compared to 36.9% growth in 4Q21.
Adjusted EPS of $0.07 topped the consensus of $(0.02).
Q4 gross profit declined 12.7% Y/Y to $221.99 million, and the margin contracted 172 bps to 29.2%.
The operating margin was 0.27%, and operating income for the quarter fell 90.8% to $2.07 million.
The company held $58.8 million in cash and equivalents as of Jan. 28, 2023. It ended the year with inventories of $605.7 million compared to $586.4 million at the end of 2021.
The company had a total of 501 U.S. stores and 138 Canadian stores at the end of 2022.
Dividend: The company's dividend of $0.05 per share will be paid on Apr. 14, 2023, to shareholders of record on Mar. 31, 2023.
FY23 Outlook: Designer Brands expects net sales, excluding Keds, to be down mid-single digits. It sees incremental net sales from Keds acquisition of $75 million - $85 million.
The company expects EPS (excluding Keds) of $1.65 - $1.75 vs. consensus of $1.76.
Doug Howe, President of DSW and incoming Chief Executive Officer, commented, "Looking ahead, we are confident in the strength of our business as we work to integrate new and recognizable names into the Designer Brands family, including Keds, Le Tigre, Topo Athletic, and Hush Puppies. Although we are navigating through a volatile environment, we are well-positioned to offer great value and a diverse assortment of product to our customers as we head into 2023."
Price Action: DBI shares are trading lower by 3.38% at $8.00 in the premarket on the last check Thursday.
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