Designer Brands Climbs Amid Strong Margins and 2026 Outlook

Designer Brands Inc. (NYSE:DBI) shares climbed on Thursday after the footwear retailer delivered fourth-quarter results and guidance above consensus. The company reported adjusted loss per share of 31 cents, better than the consensus loss of 49 cents. Metrics Sales of $713.6 million, flat year over year (Y/Y), missed the analyst consensus estimate of $718.9 million. Total comparable sales decreased by 1.9% Y/Y in the quarter. Beginning in the fourth quarter of 2025, the company combined the previously reported U.S. Retail operating segment and Canada Retail operating segment into a single reportable segment known as the Retail segment. Segment-wise, Retail remained broadly flat Y/Y, while the Brand Portfolio rose 5.3% Y/Y. Gross profit rose to $302.7 million from $282.6 million a year ago, with margins improving to 42.4%, up from 39.6% last year. The company reported adjusted operating loss of $11 million versus loss of $23.5 million last year, mainly driven by gross margin expansion. Designer Brands exited the quarter with cash and equivalents worth $50.9 million. As of January 31, Designer Brands operates a total of 665 stores across North America, with 519 DSW Designer Shoe Warehouse locations in the United States. The company said a dividend of 5 cents per share for both Class A and Class B common shares will be paid on April 10 to shareholders of record at the close of business on March 26. Outlook For 2026, the company projects Designer Brands' net sales to be down 1%-up 1% and EPS of 28 – 38 cents vs. the street view of 16 cents. In the conference call, management says that the ongoing conflict in the Middle East adds uncertainty may fuel inflation and affect consumer confidence. The company further says that despite some early-quarter weather-related challenges, first quarter has maintained positive momentum. Hence, the company sees sales to be flat to slightly up in the low single digits, with EPS projected to be around breakeven to modestly positive. Price Action: Designer Brands shares were up 5.95% at $5.70 at the last check on Thursday, according to Benzinga Pro data. Photo via Shutterstock