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Designer Brands Earnings Lag Expectations on Virus Woes

Designer Brands, operator of Designer Shoe Warehouse, reported first-quarter results short of analyst estimates.
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Designer Brands  (DBI) - Get Designer Brands Inc. Class A Report, the footwear and accessories retailer, reported worse-than-expected fiscal-first-quarter earnings due to the coronavirus pandemic.

For the quarter ended May 2, the Columbus, Ohio, operator of Designer Shoe Warehouse swung to a net loss of $215.9 million, or $3 a share, compared with a profit of $31.2 million, or 40 cents, in the year-earlier quarter.

The adjusted loss per share was $1.83 a share, compared with the FactSet consensus analyst consensus of a 60-cent loss.

Revenue totaled $482.8 million in the latest quarter, down 45% from $873.3 million a year earlier. Analysts predicted sales of $505 million.

“The effect of covid-19 on our industry has been unprecedented and has created many significant near-term challenges,” Chief Executive Roger Rawlins said in a statement.

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“The pandemic necessitated store closures and heavily impacted consumers, resulting in total comparable sales being down 42% during the first quarter."

On the bright side, “we were able to generate strong digital demand during the first quarter, which resulted in digital demand representing 50% of total demand for the quarter, growing 25% over last year,” he said.

In addition, inventory is flat versus last year, and the company will focus on its top 50 brands in footwear, further emphasizing “everyday value.”

The company has now reopened about 90% of its stores and has cash and investments totaling $250.9 million. Its debt is $393 million.

Designer Brands shares at last check traded at $6.82, down 7%. The shares have jumped 80% over the past three months. They were off 53% in 2020 through Wednesday's close.