Designer Brands Inc DBI reported a first-quarter FY23 sales decline of 10.7% year-on-year to $742.08 million, missing the analyst consensus estimate of $754.28 million. Comparable sales decreased by 10.4%.
Adjusted EPS of $0.21 missed the analyst consensus of $0.23.
Gross profit margin contracted 120 basis points Y/Y to 32%, and the gross profit dropped 13.8% to $237.7 million.
The operating margin was 2.6%, and operating income for the quarter declined 63% to $19.6 million.
The company held $50.6 million in cash and equivalents as of Apr 29, 2023. The company ended the quarter with inventories of $637.4 million compared to $672.5 million for the same period last year.
The company had a total of 499 U.S. stores and 139 Canadian stores as of Apr 29, 2023.
"As the consumer remains cautious, we are approaching the remainder of the year and the trajectory of the recovery in our business with heightened consideration," said CEO Doug Howe.
Outlook: Designer Brands cut FY23 EPS guidance to $1.20 - $1.50 from $1.65 - $1.75, versus the consensus of $1.56.
The company expects FY23 sales, excluding Keds, to decline mid-to-high-single digits (prior view: down mid-single digits).
Price Action: DBI shares are trading higher by 6.80% at $7.70 premarket on the last check Thursday.
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