Q1 2025 Designer Brands Inc Earnings Call Transcript
Key Points
- Designer Brands Inc (DBI) achieved two consecutive quarters of year-over-year adjusted operating income growth.
- The company implemented expense cuts resulting in a 6% reduction in operating expenses for the quarter.
- Topo brand showed impressive growth, with sales increasing by 84% year-over-year.
- The company is focusing on strategic partnerships and data-driven insights to optimize its product assortment.
- DBI is actively diversifying its sourcing to mitigate tariff impacts, expecting less than half of its sourcing to come from China by the end of the year.
- First quarter comparable sales declined by 8%, reflecting weakening consumer sentiment.
- US retail reported a 7.3% decline in comps and a 7.7% decline in total sales.
- Canadian sales declined by 2.9% with comps down 9.2%, affected by similar consumer sentiment issues as in the US.
- Consolidated gross margin decreased by nearly 120 basis points due to increased markdowns.
- The company withdrew its forward-looking guidance due to the highly volatile macro-environment.
Good morning, and welcome to the Designer Brands first quarter 2025 results conference call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Ashley Firlan, Investor Relations. Please go ahead.
Good morning. Earlier today, the company issued a press release comparing results of operations for the 13-week period ended May 3, 2025, to the 13-week period ended May 4, 2024. Please note that the financial results that we will be referencing during the remainder of today's call excludes certain adjustments recorded under GAAP unless specified otherwise.
For a complete reconciliation of GAAP to adjusted earnings, please reference our press release. Additionally, please note that remarks made about the future expectations, plans and prospects of the company constitute forward-looking statements.
Results may differ materially due to the various factors listed in today's press release and the company's public filings with the SEC.
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