The gross profit also dipped to $273.4 million in Q2 FY23, down from $295.7 million during the same period last year, even though the gross margin remained fairly stable at 34.5 per cent, slightly above the 34.4 per cent noted in Q2 FY22.

In Q2 FY23, Designer Brands reported a 7.8 per cent YoY decrease in net sales to $792.2 million and a gross profit of $273.4 million, down from $295.7 million in Q2 FY22.
The gross margin slightly improved to 34.5 per cent.
The firm anticipates a mid to high-single-digit decline in 2023 net sales.
The diluted EPS guidance is set between $1.20 and $1.50.

The reported net income attributable to Designer Brands was $37.2 million or $0.56 per diluted earnings per share (EPS). Meanwhile, the adjusted net income stood at $39.4 million or an adjusted diluted EPS of $0.59, the company said in its Q2 FY23 financial results.

As of the end of Q2 FY23, the company’s inventory was valued at $606.8 million, showing a decrease compared to $694.0 million at the end of the same quarter last year. During this quarter, Designer Brands also made the decision to close one store in the US and one in Canada, bringing the total number of stores to 498 in the US and 138 in Canada as of July 29, 2023.

“I am proud of the sequential improvement in both sales and profitability in the second quarter as well as the progress that has been made on our strategic initiatives, with several exciting milestones in the quarter, including new collaborations and celebrity partnerships. Our portfolio of owned brands and national brand partners remains strong, and we are excited to be rolling out our new athletic and athleisure offerings from Le Tigre and Keds while continuing to elevate our relationship with Nike during a time that athletic and athleisure demand continues to grow,” said Doug Howe, chief executive officer.

Looking ahead, the company provided an updated financial outlook for 2023, reaffirming the guidance given earlier. The net sales growth for Designer Brands, excluding the impact of the Keds acquisition, is expected to be down by mid to high-single digits. However, the incremental net sales from the Keds acquisition are anticipated to be between $75.0 million and $85 million. The guidance for diluted EPS is projected to be between $1.20 and $1.50.

Fibre2Fashion News Desk (DP)