Designer Brands Inc. DBI shares are trading lower Tuesday Morning after the company reported worse-than-expected Q3 financial results and lowered FY23 adjusted EPS guidance.
The company reported a third-quarter FY23 sales decline of 9.1% year-on-year to $786.33 million, missing the analyst consensus of $829.18 million.
Adjusted EPS of $0.24 missed the analyst consensus of $0.48. Total comparable sales decreased by 9.3%.
"This quarter, we were impacted by a footwear market that contracted for the first time since COVID coupled with unseasonably warm weather, which significantly reduced customer demand for shoes and pressured our heavily seasonal assortment," stated CEO Doug Howe.
Quarterly gross profit decreased to $256.4 million from $285.8 million last year. Gross margin was 32.6%, lower than 33.0% for the same period last year.
Cash and equivalents totaled $54.6 million at the end of the third quarter of 2023. Debt totaled $375.5 million at the end of the third quarter.
The company ended the quarter with inventories of $601.5 million compared to $681.8 million at the end of the same period last year.
During the third quarter of 2023, the company opened one store in the U.S. and six stores in Canada, resulting in a total of 499 U.S. stores and 144 Canadian stores as of October 28, 2023.
As of October 28, 2023, the company had $87.7 million of Class A common shares for repurchase under the share repurchase program.
The company will pay a dividend of $0.05 per share of Class A and Class B common shares on December 14, 2023, to shareholders of record at the close of business on November 30, 2023.
The company also disclosed it has made some difficult decisions regarding leadership across its organization, without providing any details.
Outlook: Designer Brands lowered FY23 adjusted EPS guidance excluding Keds to $0.40 - $0.70 versus the consensus of $1.30 (prior outlook: $1.20 - $1.50).
The company forecasts incremental net sales from Keds acquisition of $60.0 million-$70.0 million (prior outlook: $75.0 million-$85.0 million).
Designer Brands net sales growth, excluding Keds, is now expected to be down high-single digits (prior view: down mid- to high-single digits).
Price Action: DBI shares are trading lower by 34.4% at $8.40 premarket on the last check Tuesday.
Photo Via Company
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
