Why Is Specialty Retailer Designer Brands Stock Rising Today?

Designer Brands Inc DBI shares are trading higher on Thursday after the fourth-quarter earnings result.

The company reported a fourth-quarter sales decline of 5.4% year-on-year to $713.572 million, missing the analyst consensus estimate of $719.323 million. Total comparable sales increased by 0.5%.

Adjusted EPS loss of 44 cents beat the consensus estimate for a loss of 49 cents.

Gross profit margin expanded 80 basis points to 39.6% and the gross profit declined 3.4% to $282.6 million.

The company incurred an operating loss of $25.8 million versus an operating loss of $36 million a year ago.

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The company held $44.8 million in cash and equivalents as of February 1, 2025. Operating cash flow for 2024 was $82.2 million.

Inventories totaled $599.8 million at the end of 2024, compared to $571.3 million at the end of 2023. The company had a total of 494 U.S. stores and 175 Canadian stores as of February 1.

Debt totaled $484.3 million at the end of the fourth quarter versus $420.3 million at the end of the same period last year.

During 2024, the company repurchased an aggregate 10.3 million class A common shares at an aggregate cost of $68.6 million.

A dividend of $0.05 per share of class A and class B common shares will be paid on April 11 to shareholders of record at the close of business on March 28.

Outlook: Designer Brands sees FY25 net sales growth to be in low single-digits. The company expects FY25 EPS of $0.30 – $0.50 against the consensus of $0.51.

Price Action: DBI shares traded higher by 11.2% at $4.225 at last check Thursday.

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