Designer Brands Inc. reported a significant decline in financial performance for the first quarter of fiscal 2025, with net sales falling to $686.9 million, an 8% decrease from $746.6 million in the same period last year. The company experienced a net loss of $17.4 million, or $0.36 per diluted share, compared to a net income of $0.8 million, or $0.01 per diluted share, in the prior year. The gross profit margin also decreased to 43.0%, down from 44.2% in the previous year, reflecting lower sales and increased promotional activity across all segments.
The decline in revenue was attributed to a 7.8% decrease in comparable sales, with the U.S. Retail segment experiencing a 7.3% drop and the Canada Retail segment a 9.2% decline. The Brand Portfolio segment saw a notable 27% decrease in direct-to-consumer sales, primarily due to reduced orders from retail customers. The company noted that macroeconomic conditions, including inflation and consumer spending declines, have negatively impacted sales and overall liquidity.
In terms of operational developments, Designer Brands completed the acquisition of Rubino Shoes Inc. in April 2024, which has allowed for expansion into Quebec, Canada. The company also reported a slight increase in the number of stores, with a total of 669 locations as of May 3, 2025, compared to 675 a year earlier. However, the company faced challenges with inventory management, leading to a net cash used in operating activities of $20.4 million, slightly higher than the $19.7 million used in the same quarter last year.
Looking ahead, Designer Brands is focused on mitigating the impacts of ongoing macroeconomic uncertainties and potential tariff changes. The company has implemented measures to align inventory with current demand and reduce expenses. Despite the challenges, the company remains committed to its growth strategy, supported by its available liquidity and credit facilities. The Board of Directors declared a quarterly cash dividend of $0.05 per share, reflecting ongoing shareholder returns despite the current financial challenges.
About Designer Brands Inc.
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