Designer Brands Inc. (NYSE:DBI) raised its full-year earnings guidance on Thursday after reporting second-quarter adjusted earnings per share above analyst estimates, while revenue came in below expectations.
Adjusted EPS was $0.34, compared with an analyst estimate of $0.26. Revenue declined 1.2% year on year to $730.6 million from $739.8 million, below the consensus estimate of $745.09 million.
Shares of Designer Brands fell 1.34% in pre-market trading following the results.
The footwear retailer increased its full-year adjusted diluted EPS guidance to between $0.47 and $0.52 from its previous range of $0.28 to $0.38. The midpoint of the new range is $0.50, compared with an analyst consensus of $0.39.
Designer Brands also revised its net sales outlook to between flat and 1% growth, from its previous forecast of a decline of 1% to growth of 1%.
“Our second quarter results represent significant improvement in profitability year-over-year, highlighted by meaningful gross margin expansion as well as impressive sales growth in our Brand Portfolio segment,” Chief Executive Officer Doug Howe said.
Gross Margin Rises to 50%
Reported gross margin increased to 50.0% from 43.6% in the prior-year quarter, while adjusted gross margin rose to 47.9% from 43.6%.
Net income attributable to Designer Brands was $17.6 million, equivalent to $0.31 per diluted share on a GAAP basis.
Total comparable sales declined 2.4%. Sales in the Brand Portfolio segment increased 17.9%, while Retail segment sales fell 2.2%.
Designer Brands ended the quarter with total debt of $423.1 million, down $93.0 million from the same period last year.
The company also declared a dividend of $0.05 per share, payable on October 7, 2026.
Designer Brands stock price
