Designer Brands (DBI) Q2 Earnings call transcript Sep 11, 2025

Designer Brands, a leading footwear retailer, recently held its second quarter 2024 earnings call, highlighting a period of continued progress and strategic initiatives aimed at returning the company to growth. The call was led by CEO Doug Howe and CFO Jared Poff, who provided insights into the company's financial performance and strategic outlook.

Financial Performance and Strategic Initiatives

The company reported a 3% decline in sales and a 1% decline in comparable sales for the second quarter. However, the management highlighted the positive trend in the back-to-school business, which has been supported by the expansion of athletic and athleisure offerings. The top 8 brands, all in the athletic and athleisure categories, generated outsized growth, up over 30%, underscoring the benefits of developing deeper relationships with key brand partners.

Doug Howe emphasized the company's strategic initiatives, including reinvigorating the assortment, elevating marketing efforts, and enhancing the omnichannel shopping experience. These efforts have been particularly notable in the athletic and athleisure categories, where DSW outpaced the overall footwear market by 1 percentage point in the second quarter. The company's focus on athletic and casual footwear, a shift from the pre-pandemic period, has been instrumental in improving overall performance.

Market Position and Competitive Landscape

Despite the challenges posed by a cautious consumer environment, Designer Brands remains optimistic about its future prospects. The company expects positive comps to continue in the back half of the year, supported by its strategic initiatives and the strength of the athletic and athleisure categories. The management is particularly pleased with the back-to-school business, which has carried momentum into the third quarter.

The company's market position is strengthened by its strategic acquisitions, including the recent acquisition of Rubino in Canada, which has expanded its reach into a new territory. The acquisition has allowed the company to leverage Rubino's established brand in Quebec and anticipate no material expenses associated with integrating the business within its portfolio.

Financial Outlook and Guidance

Looking ahead, Designer Brands expects to continue its strategic initiatives, focusing on assortment pivot, marketing enhancements, and omnichannel improvements. The company is also working on a formalized expense efficiency initiative, aiming to optimize its cost structure moving forward. Despite the ongoing macroeconomic uncertainty, Designer Brands remains confident in its ability to navigate further potential challenges, with a healthy liquidity position and a clear focus on growth.

In conclusion, Designer Brands' second quarter earnings call revealed a company on a path to growth, driven by strategic initiatives in product assortment, marketing, and omnichannel enhancements. The management's positive outlook, supported by the strength of the athletic and athleisure categories, positions the company well for the future. Investors and analysts will be closely watching the company's progress in the back half of 2024, as it continues to execute on its strategic plan and navigate the dynamic footwear market.