Designer Brands Inc. reported a decline in financial performance for the second quarter of 2025, with net sales decreasing by 4.2% to $739.8 million compared to $771.9 million in the same period last year. The company's gross profit also fell, amounting to $322.9 million, or 43.7% of net sales, down from 44.0% in the prior year. Net income attributable to Designer Brands Inc. was $10.8 million, or $0.22 per diluted share, a decrease from $13.8 million, or $0.24 per diluted share, in the previous year. The decline in profitability was attributed to lower sales and increased promotional activity, which pressured margins across all segments.
In comparison to the previous fiscal period, Designer Brands experienced a significant drop in comparable sales, which fell by 5.0% overall. The U.S. Retail segment saw a 4.9% decline in comparable sales, while the Canada Retail segment reported a smaller decrease of 0.6%. The Brand Portfolio segment, however, faced a more substantial decline of 29.2% in its direct-to-consumer channel, primarily due to reduced wholesale activity and lower consumer demand. The company also recorded impairment charges of $1.5 million for an underperforming store in the U.S. during the quarter.
Strategically, Designer Brands has been focusing on integrating its recent acquisition of Rubino Shoes Inc., which has allowed for expansion into Quebec, Canada. The acquisition is expected to enhance the company's presence in the Canadian market. Additionally, the company has been adjusting its inventory levels in response to changing consumer demand and has implemented cost-cutting measures to align its expenses with lower sales. As of August 2, 2025, the company operated 668 stores, a decrease from 676 stores a year earlier, reflecting ongoing adjustments to its retail footprint.
Operationally, the company reported a total employee headcount of 41,796 as of August 2, 2025, down from 47,757 a year prior. This reduction is part of the company's efforts to streamline operations amid challenging market conditions. The company also noted a decrease in customer traffic, which has impacted sales performance. Despite these challenges, Designer Brands is actively working to enhance its digital shopping experience and diversify its sourcing strategies to mitigate risks associated with tariffs and supply chain disruptions.
Looking ahead, Designer Brands remains cautious about the macroeconomic environment, which has been characterized by inflationary pressures and changing consumer spending patterns. The company anticipates that these factors may continue to affect its performance in the near term. Management has indicated that they will continue to monitor market conditions closely and may implement further operational efficiency measures as necessary. The company is committed to maintaining liquidity to support its operations and growth strategy while navigating the uncertainties in the retail landscape.
About Designer Brands Inc.
Designer Brands Inc. is a leading footwear and accessories company operating retail stores and e-commerce platforms under banners like DSW, The Shoe Co., and Rubino. It designs, sources, and sells a wide range of national and owned brands, including licensed labels like Vince Camuto and Keds. The company serves North American consumers through a multi-channel model emphasizing value, style, and customer engagement.
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