Designer Brands Inc. (NYSE:DBI) shares plunged premarket Tuesday after reporting earnings for its latest quarter, missing consensus estimates.
The fashion company reported third-quarter earnings of $0.24, $0.22 worse than the analyst estimate of $0.46, while revenue for the quarter declined 9.1% year-over-year, coming in at $786.3 million, below the consensus estimate of $824.24 million. Total comparable sales decreased by 9.3%.
DBI's more than 32% decline in premarket trading Thursday means it is currently trading at levels last seen in June this year, below the $9 per share mark.
The company said its quarter was impacted by a footwear market that contracted for the first time since COVID alongside unseasonably warm weather, which significantly reduced customer demand for shoes and pressured DBI's heavily seasonal assortment.
"We saw improved performance in casual and clearance categories this quarter, but this was not enough to offset the broader lack of demand," stated Doug Howe, DBI's Chief Executive Officer. "While macro pressures notably impacted our business, we clearly recognize the need to operate with even greater speed and increase the level of innovation, newness, and fashion into our assortments, returning to our roots as a merchant organization and a fashion footwear retailer."
Looking ahead, the macro pressures are not expected to alleviate in the near term for DBI. However, it states it is positioning the business well for the long term.
By Sam Boughedda