Dive Brief:
- Designer Brands reported a Q4 5.4% net sales drop year over year to $713.6 million. Comparable sales rose 0.5%, marking a return to growth for the first time in nine quarters. Net loss widened to $38.2 million, from $29.6 million a year ago.
- For the full year, net sales dipped 2.1% year over year to $3 billion, and comparable sales fell 1.7%. The company was in the red, with net loss of $10 million, compared to last year’s $29.2 million net income.
- The company plans to add net new DSW locations for the first time since 2019, Designer Brands CEO Doug Howe said during an earnings call on Thursday. The company will also enhance its in-store selection and displays, a “key differentiator when it comes to the in-person shopping experience that drives over 70% of our sales,” Howe said.
Dive Insight:
Howe attributes Designer Brands’ progress to several “decisive actions,” including a leadership shakeup and changes to merchandising and marketing.
In the past year and a half, Designer Brands has tapped experienced execs to come on board. In January 2024, Andrea O’Donnell joined the company as brands president , leaving behind her previous role as CEO of Everlane. In June the company named Sarah Crockett , who previously held leadership roles at Dickies, Backcountry, Lucky Brand, Vans and REI, as chief marketer. Designer Brands has also brought on a new head of merchandising, according to Howe.
The company made these hires “to reinvigorate our teams, implement new ways of working and bring in expertise we were previously lacking,” he said.
In addition to filling key leadership roles, Designer Brands made efforts to refresh its product assortment. That included integrating more athleisure products, a move that boosted penetration by five percentage points and grew market share.
Designer Brands is also concentrating on its VIP rewards program, which represents 90% of its transactions. The company aims to relaunch the program in 2026 after reshaping its VIP Rewards and perks. The company will continue to evolve its approach to promotions to help customers who are searching for value.
Meanwhile, as the Trump administration continues to roll out tariffs, Howe said that the company doesn’t expect “a material impact on our business.” However, so far the company has seen consumers become more cautious in their spending, a trend that emerged in January as a result of inflation and declining discretionary income, he said during the call.
“This was a marked change from the trends we were seeing exiting December, and we recognize that uncertainty remains as they continue to be selective with their discretionary income,” Howe said. “As such, we are leaning into initiatives to drive demand and value.”
