Overview

• U.S. footwear retailer's Q1 net sales rose 1.4% from a year earlier

• Adjusted diluted EPS for Q1 was $0.07

• Gross margin expanded by 240 basis points, driven by inventory and pricing improvements

Outlook

• Designer Brands reaffirms 2026 net sales guidance of down 1% to up 1%

• Company expects 2026 diluted EPS of $0.28 to $0.38

• Designer Brands anticipates full-year EPS trending toward high end of guidance range

Result Drivers

• BRAND PORTFOLIO GROWTH - Double-digit sales growth in Brand Portfolio segment drove overall sales increase, per CEO Doug Howe

• GROSS MARGIN EXPANSION - Gross margin rose 240 basis points, reflecting improvements in inventory management, pricing, sourcing, and channel profitability, according to CEO Doug Howe

• RETAIL SEGMENT STABILIZATION - Retail segment comparable sales decline slowed, showing signs of stabilization, per CEO Doug Howe

Company press release: ID:nPnDW2sKa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue		$696.40 mln
Q1 Adjusted EPS		$0.07
Q1 Adjusted Net Income		$3.80 mln
Q1 Net Income		$1.16 mln
Q1 Gross Profit		$315.30 mln

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories retailers peer group is "buy."

• Wall Street's median 12-month price target for Designer Brands Inc is $7.50, about 15.5% below its June 8 closing price of $8.88

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 17 three months ago

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