The following is a summary of the Designer Brands (DBI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Designer Brands reported a decrease in Q3 sales by 1.2% year-over-year to $777 million.

• Adjusted operating income improved by approximately 40%, reaching $43.6 million.

• Despite a reduction in top-line sales, profitability increased due to ongoing expense optimization and reversal of incentives.

• Net interest expense increased to $11.6 million due to higher interest rates and term loan costs.

• Adjusted net income for Q3 was $14.5 million with earnings per share of $0.27.

Business Progress:

• Designer Brands emphasized its strategic focus on athletic and athleisure categories, which continue to perform strongly.

• Investments are being made in marketing and omnichannel experiences, including enhanced social media engagement and partnerships with national brands for holiday promotions.

• The company addressed inventory management by reducing seasonal inventory and planning more aggressive adjustments for 2025.

• New store openings in Canada and improvements in brand portfolio performance were highlighted.

Opportunities:

• Continued growth and strong performance in athletic and athleisure footwear represent ongoing opportunities for Designer Brands.

• Enhancements in marketing and social media engagement are positioned to increase brand visibility and customer engagement.

• The holiday season presents an opportunity for increased sales with strategic promotions and gift offerings.

Risks:

• The company observed a significant drop in demand for boots due to unseasonably warm weather, impacting overall sales performance.

• Consumer discretionary spending remains uncertain affecting overall market conditions.

More details: Designer Brands IR

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