Comparable sales up 3.0% on top of comparable
sales of 40.8% for the third quarter of 2021
Net sales from our Owned Brands increased
25.0% over the same period last year
In November
2022, received $120.3 million in tax refund reducing
debt and increasing liquidity
COLUMBUS, Ohio, Dec. 1, 2022
/PRNewswire/ -- Designer Brands Inc. (NYSE: DBI) (the "Company" and
"Designer Brands"), one of the world's largest designers,
producers, and retailers of footwear and accessories, announced
financial results for the three months ended October 29, 2022.
Roger Rawlins, Chief Executive Officer, stated, "We
continued to make meaningful progress on our long-term brand
building strategy while also delivering solid comparable sales
across every segment of our business. Sales of Owned Brands
represented 26.5% of total net sales in the third quarter of 2022
compared to 21.5% for the same period last year. The strategic
shifts we have made in our business over the past several years are
driving a sustainably higher gross margin rate than 2019 as we have
a more targeted focus on customer acquisition, optimizing our
assortment, and growing the brands we own and control.
"While we are seeing many of the same pressures across the
consumer landscape that most retailers are seeing, our flexible
business model continues to support our efforts to navigate a
dynamic macro environment. We are focused on meeting our customers'
footwear needs while we balance inventory and expenses in order to
continue growing market share in this volatile environment."
Third Quarter Operating Results (all comparisons
are to the third quarter of 2021)
- Net sales increased 1.4% to $865.0
million.
- Comparable sales increased 3.0%.
- Gross profit decreased to $285.8
million versus $313.6 million
last year, and gross margin as a percentage of net sales was 33.0%
as compared to 36.7% last year.
- Reported net income was $45.2
million, or diluted earnings per share ("EPS") of
$0.65.
- Adjusted net income was $46.1
million, or adjusted diluted EPS of $0.67.
Liquidity Highlights
- Cash and cash equivalents totaled $62.5
million at the end of the third quarter of 2022 compared to
$83.1 million at the end of the same
period last year, with $130.9 million
remaining available for borrowings under our senior secured
asset-based revolving credit facility. Debt totaled $415.5 million at the end of the third quarter of
2022 compared to $227.9 million at
the end of the same period last year. In November 2022, we received $120.3 million of our income tax receivable from
the Internal Revenue Service as a result of the Coronavirus Aid,
Relief, and Economic Security Act. We anticipate receiving the
remaining income tax receivable within the next twelve months.
- The Company ended the quarter with more normalized inventory
levels of $681.8 million compared to
$602.1 million at the same period
last year with accelerated receipts to support fall season
demand.
Return to Shareholders
- During the third quarter of 2022, Designer Brands repurchased
1.3 million Class A common shares (2.0% of Class A and Class B
common shares at the beginning of the quarter) at an aggregate cost
of $19.1 million under its share
repurchase program.
- During the nine months ended October 29,
2022, we repurchased 10.7 million Class A common shares
(14.6% of Class A and Class B common shares at the beginning of the
fiscal year) at an aggregate cost of $147.5
million, with $187.4 million
of Class A common shares that remain authorized under the program
as of October 29, 2022.
- A dividend of $0.05 per share of
Class A and Class B common shares will be paid on December 28, 2022 to shareholders of record at
the close of business on December 13,
2022.
Store Openings and Closings
During the third quarter of 2022, we opened 1 new store and
closed 3 stores in the U.S. with no changes to the store count in
Canada, resulting in a total of
504 U.S. stores and 138 Canadian stores as of October 29,
2022.
Updated 2022 Financial Outlook
The Company is updating the following guidance for the full year
2022:
Metric
|
|
Previous
Guidance
|
|
Current
Guidance
|
Designer Brands
Comparable Sales Growth
|
|
Mid-single
digits
|
|
Mid-single
digits
|
Diluted EPS
|
|
$2.05 -
$2.15
|
|
$1.75 -
$1.80
|
Webcast and Conference Call
The Company is hosting a conference call today at 8:30 a.m. Eastern Time. Investors and analysts
interested in participating in the call are invited to dial
1-888-317-6003, or the international dial-in, 1-412-317-6061, and
reference conference ID number 8112374 approximately ten minutes
prior to the start of the conference call. The conference call will
also be broadcast live over the internet and can be accessed
through the following link:
https://app.webinar.net/95ZvEx7rpAl
For those unable to listen to the live webcast, an archived
version will be available via the same website address until
December 15,2022. A replay of the
teleconference will be available by dialing the following
numbers:
U.S.: 1-877-344-7529
Canada: 1-855-669-9658
International: 1-412-317-0088
Passcode: 5000482
About Designer Brands
Designer Brands is one of the world's largest designers,
producers and retailers of the most recognizable footwear brands
and accessories, transforming and defining the footwear industry by
inspiring self-expression across every facet of its enterprise.
Through its portfolio of world-class owned brands, led by the
industry-setting Vince Camuto brand, Designer Brands delivers
on-trend footwear and accessories through its robust
direct-to-consumer omni-channel infrastructure, featuring a
billion-dollar digital commerce business and nearly 650 stores
across the U.S. and Canada. Its
retailing operations under the DSW Designer Shoe Warehouse and The
Shoe Company banners deliver current, in-line footwear and
accessories from most of the largest national brands in the
industry and hold leading market share positions in key product
categories across Women's, Men's and Kid's in the U.S. and
Canada. Designer Brands also
distributes its owned brands through select wholesale relationships
while leveraging its design and sourcing expertise to build private
label product for national retailers. Designer Brands is also
committed to being a difference maker in the world, taking steps
forward to advance diversity, equity, and inclusion in the footwear
industry and supporting our global community and the health of our
planet through donating more than six million pairs of shoes to the
global non-profit Soles4Souls. More information can be found at
www.designerbrands.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
Certain statements in this press release may constitute
forward-looking statements and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
You can identify these forward-looking statements by the use of
forward-looking words such as "outlook," "could," "believes,"
"expects," "potential," "continues," "may," "will," "should,"
"would," "seeks," "approximately," "predicts," "intends," "plans,"
"estimates," "anticipates," or the negative version of those words
or other comparable words. These statements are based on the
Company's current views and expectations and involve known and
unknown risks, uncertainties, and other factors that may cause
actual results, performance, or achievements to be materially
different from any future results, performance, or achievements
expressed or implied by the forward-looking statements. These
factors include, but are not limited to: risks and uncertainties
related to the ongoing coronavirus ("COVID-19") pandemic, any
future COVID-19 resurgence, and any other adverse public health
developments; risks that recent inflationary pressures, including
higher freight costs, could have on our results of operations and
customer demand based on pricing actions and operating measures
taken to mitigate the impact of inflation; uncertain general
economic conditions, including inflation and supply chain
pressures, domestic and global political and social conditions and
the potential impact of geopolitical turmoil or conflict, and the
related impacts to consumer discretionary spending; our ability to
execute on our long-term strategic plans; our ability to anticipate
and respond to fashion trends, consumer preferences, and changing
customer expectations; our ability to maintain strong relationships
with our vendors, manufacturers, licensors, and retailer customers;
risks related to losses or disruptions associated with our
distribution systems, including our distribution centers and
fulfillment center and stores, whether as a result of the COVID-19
pandemic, reliance on third-party providers, or otherwise; our
reliance on our loyalty programs and marketing to drive traffic,
sales, and customer loyalty; risks related to cyber security
threats and privacy or data security breaches or the potential loss
or disruption of our information systems; our ability to
protect our reputation and to maintain the brands we license; our
competitiveness with respect to style, price, brand availability,
and customer service; risks related to our international
operations, including international trade, our reliance on foreign
sources for merchandise, exposure to political, economic,
operational, and compliance and other risks, and fluctuations in
foreign currency exchange rates; our ability to comply with privacy
laws and regulations, as well as other legal
obligations; risks associated with climate change and other
corporate responsibility issues; and uncertainties related to
future legislation, regulatory reform, policy changes, or
interpretive guidance on existing legislation. Risks and other
factors that could cause our actual results to differ materially
from our forward-looking statements are described in the Company's
Annual Report on Form 10-K for the fiscal year ended January 29, 2022 and in our other filings with
the Securities and Exchange Commission. All forward-looking
statements speak only as of the time when made. Except as may be
required by law, the Company undertakes no obligation to update or
revise the forward-looking statements included in this press
release to reflect any future events or circumstances.
DESIGNER BRANDS
INC. SEGMENT RESULTS (unaudited)
|
|
Net
Sales
|
|
Three months
ended
|
|
|
|
|
(dollars in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
Segment net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
706,391
|
|
78.8 %
|
|
$
709,608
|
|
79.9 %
|
|
$ (3,217)
|
|
(0.5) %
|
Canada
Retail
|
82,289
|
|
9.2 %
|
|
74,792
|
|
8.4 %
|
|
7,497
|
|
10.0 %
|
Brand
Portfolio
|
107,458
|
|
12.0 %
|
|
103,919
|
|
11.7 %
|
|
3,539
|
|
3.4 %
|
Total segment net
sales
|
896,138
|
|
100.0 %
|
|
888,319
|
|
100.0 %
|
|
7,819
|
|
0.9 %
|
Elimination of
intersegment net sales
|
(31,118)
|
|
|
|
(34,852)
|
|
|
|
3,734
|
|
(10.7) %
|
Consolidated net
sales
|
$
865,020
|
|
|
|
$
853,467
|
|
|
|
$ 11,553
|
|
1.4 %
|
|
Nine months
ended
|
|
|
|
|
(dollars in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
Segment net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
2,143,199
|
|
81.5 %
|
|
$
2,053,359
|
|
84.2 %
|
|
$ 89,840
|
|
4.4 %
|
Canada
Retail
|
216,888
|
|
8.2 %
|
|
172,981
|
|
7.1 %
|
|
43,907
|
|
25.4 %
|
Brand
Portfolio
|
271,265
|
|
10.3 %
|
|
211,875
|
|
8.7 %
|
|
59,390
|
|
28.0 %
|
Total segment net
sales
|
2,631,352
|
|
100.0 %
|
|
2,438,215
|
|
100.0 %
|
|
193,137
|
|
7.9 %
|
Elimination of
intersegment net sales
|
(76,470)
|
|
|
|
(64,258)
|
|
|
|
(12,212)
|
|
19.0 %
|
Consolidated net
sales
|
$
2,554,882
|
|
|
|
$
2,373,957
|
|
|
|
$
180,925
|
|
7.6 %
|
Net Sales by Brand
Category
|
(in
thousands)
|
U.S. Retail
|
|
Canada
Retail
|
|
Brand
Portfolio
|
|
Eliminations
|
|
Consolidated
|
Three months ended
October 29, 2022
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
153,311
|
|
$
—
|
|
$
9,810
|
|
$
—
|
|
$
163,121
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
66,530
|
|
—
|
|
66,530
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
31,118
|
|
(31,118)
|
|
—
|
Total Owned
Brands
|
153,311
|
|
—
|
|
107,458
|
|
(31,118)
|
|
229,651
|
National
brands
|
553,080
|
|
—
|
|
—
|
|
—
|
|
553,080
|
Canada
Retail(2)
|
—
|
|
82,289
|
|
—
|
|
—
|
|
82,289
|
Total net
sales
|
$
706,391
|
|
$
82,289
|
|
$
107,458
|
|
$
(31,118)
|
|
$
865,020
|
Three months ended
October 30, 2021
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
114,702
|
|
$
—
|
|
$
7,726
|
|
$
—
|
|
$
122,428
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
61,341
|
|
—
|
|
61,341
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
34,852
|
|
(34,852)
|
|
—
|
Total Owned
Brands
|
114,702
|
|
—
|
|
103,919
|
|
(34,852)
|
|
183,769
|
National
brands
|
594,906
|
|
—
|
|
—
|
|
—
|
|
594,906
|
Canada
Retail(2)
|
—
|
|
74,792
|
|
—
|
|
—
|
|
74,792
|
Total net
sales
|
$
709,608
|
|
$
74,792
|
|
$
103,919
|
|
$
(34,852)
|
|
$
853,467
|
Nine months ended
October 29, 2022
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
440,343
|
|
$
—
|
|
$
24,130
|
|
$
—
|
|
$
464,473
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
170,665
|
|
—
|
|
170,665
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
76,470
|
|
(76,470)
|
|
—
|
Total Owned
Brands
|
440,343
|
|
—
|
|
271,265
|
|
(76,470)
|
|
635,138
|
National
brands
|
1,702,856
|
|
—
|
|
—
|
|
—
|
|
1,702,856
|
Canada
Retail(2)
|
—
|
|
216,888
|
|
—
|
|
—
|
|
216,888
|
Total net
sales
|
$
2,143,199
|
|
$
216,888
|
|
$
271,265
|
|
$
(76,470)
|
|
$
2,554,882
|
Nine months ended
October 30, 2021
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
300,120
|
|
$
—
|
|
$
18,616
|
|
$
—
|
|
$
318,736
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
129,001
|
|
—
|
|
129,001
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
64,258
|
|
(64,258)
|
|
—
|
Total Owned
Brands
|
300,120
|
|
—
|
|
211,875
|
|
(64,258)
|
|
447,737
|
National
brands
|
1,753,239
|
|
—
|
|
—
|
|
—
|
|
1,753,239
|
Canada
Retail(2)
|
—
|
|
172,981
|
|
—
|
|
—
|
|
172,981
|
Total net
sales
|
$
2,053,359
|
|
$ 172,981
|
|
$
211,875
|
|
$
(64,258)
|
|
$
2,373,957
|
|
|
(1)
|
Owned Brands refers to
those brands we have rights to sell through ownership or license
arrangements.
|
(2)
|
We currently do not
report the Canada Retail segment net sales by brand
categories.
|
Comparable
Sales
|
|
Three months
ended
|
|
Nine months
ended
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
October 30,
2021
|
Change in comparable
sales:
|
|
|
|
|
|
|
|
U.S. Retail
segment
|
1.1 %
|
|
43.9 %
|
|
5.5 %
|
|
62.6 %
|
Canada Retail
segment
|
18.8 %
|
|
15.2 %
|
|
33.5 %
|
|
13.7 %
|
Brand Portfolio segment
- direct-
to-consumer channel
|
27.0 %
|
|
50.4 %
|
|
29.6 %
|
|
22.8 %
|
Total
|
3.0 %
|
|
40.8 %
|
|
7.8 %
|
|
57.4 %
|
Store
Count
|
(square footage in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
|
Number of
Stores
|
|
Square
Footage
|
|
Number of
Stores
|
|
Square
Footage
|
U.S. Retail segment -
DSW stores
|
504
|
|
10,188
|
|
515
|
|
10,457
|
Canada Retail
segment:
|
|
|
|
|
|
|
|
The Shoe Company
stores
|
113
|
|
596
|
|
117
|
|
617
|
DSW stores
|
25
|
|
496
|
|
27
|
|
536
|
|
138
|
|
1,092
|
|
144
|
|
1,153
|
Total number of
stores
|
642
|
|
11,280
|
|
659
|
|
11,610
|
Gross
Profit
|
|
Three months
ended
|
|
|
|
|
|
|
(dollars in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
Segment gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
232,058
|
|
32.9 %
|
|
$
258,059
|
|
36.4 %
|
|
$
(26,001)
|
|
(10.1) %
|
|
(350)
|
Canada
Retail
|
31,298
|
|
38.0 %
|
|
28,588
|
|
38.2 %
|
|
2,710
|
|
9.5 %
|
|
(20)
|
Brand
Portfolio
|
23,839
|
|
22.2 %
|
|
32,329
|
|
31.1 %
|
|
(8,490)
|
|
(26.3) %
|
|
(890)
|
Total segment gross
profit
|
287,195
|
|
32.0 %
|
|
318,976
|
|
35.9 %
|
|
(31,781)
|
|
(10.0) %
|
|
(390)
|
Net recognition of
intersegment gross profit
|
(1,376)
|
|
|
|
(5,359)
|
|
|
|
3,983
|
|
|
|
|
Consolidated gross
profit
|
$
285,819
|
|
33.0 %
|
|
$
313,617
|
|
36.7 %
|
|
$
(27,798)
|
|
(8.9) %
|
|
(370)
|
|
Nine months
ended
|
|
|
|
|
|
|
(dollars in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
|
Basis Points
|
Segment gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
716,268
|
|
33.4 %
|
|
$
708,065
|
|
34.5 %
|
|
$
8,203
|
|
1.2 %
|
|
(110)
|
Canada
Retail
|
81,145
|
|
37.4 %
|
|
58,191
|
|
33.6 %
|
|
22,954
|
|
39.4 %
|
|
380
|
Brand
Portfolio
|
59,975
|
|
22.1 %
|
|
52,788
|
|
24.9 %
|
|
7,187
|
|
13.6 %
|
|
(280)
|
Total segment gross
profit
|
857,388
|
|
32.6 %
|
|
819,044
|
|
33.6 %
|
|
38,344
|
|
4.7 %
|
|
(100)
|
Net recognition of
intersegment gross profit
|
(154)
|
|
|
|
(4,635)
|
|
|
|
4,481
|
|
|
|
|
Consolidated gross
profit
|
$
857,234
|
|
33.6 %
|
|
$
814,409
|
|
34.3 %
|
|
$ 42,825
|
|
5.3 %
|
|
(70)
|
Intersegment
Eliminations
|
|
Three months
ended
|
(in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
Recognition
(elimination) of intersegment activity:
|
|
|
|
Net sales
recognized by Brand Portfolio segment
|
$
(31,118)
|
|
$
(34,852)
|
Cost of
sales:
|
|
|
|
Cost of sales
recognized by Brand Portfolio segment
|
21,426
|
|
22,950
|
Recognition of
intersegment gross profit for inventory previously purchased
that
was subsequently sold to external customers during the current
period
|
8,316
|
|
6,543
|
|
$
(1,376)
|
|
$
(5,359)
|
|
Nine months
ended
|
(in
thousands)
|
October 29,
2022
|
|
October 30,
2021
|
Recognition
(elimination) of intersegment activity:
|
|
|
|
Net sales recognized by
Brand Portfolio segment
|
$
(76,470)
|
|
$
(64,258)
|
Cost of
sales:
|
|
|
|
Cost of sales
recognized by Brand Portfolio segment
|
52,149
|
|
43,592
|
Recognition of
intersegment gross profit for inventory previously purchased
that
was subsequently sold to external customers during the current
period
|
24,167
|
|
16,031
|
|
$
(154)
|
|
$
(4,635)
|
DESIGNER BRANDS
INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited and in thousands, except per share
amounts)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
October 30,
2021
|
Net sales
|
$
865,020
|
|
$
853,467
|
|
$
2,554,882
|
|
$
2,373,957
|
Cost of
sales
|
(579,201)
|
|
(539,850)
|
|
(1,697,648)
|
|
(1,559,548)
|
Gross profit
|
285,819
|
|
313,617
|
|
857,234
|
|
814,409
|
Operating
expenses
|
(222,232)
|
|
(211,909)
|
|
(674,348)
|
|
(637,108)
|
Income from equity
investments
|
2,290
|
|
2,600
|
|
6,670
|
|
6,598
|
Impairment
charges
|
(1,349)
|
|
—
|
|
(4,237)
|
|
(1,174)
|
Operating
profit
|
64,528
|
|
104,308
|
|
185,319
|
|
182,725
|
Interest expense,
net
|
(4,826)
|
|
(7,706)
|
|
(10,530)
|
|
(24,592)
|
Loss on extinguishment
of debt and write-off of debt issuance costs
|
—
|
|
—
|
|
(12,862)
|
|
—
|
Non-operating income
(expenses), net
|
(152)
|
|
172
|
|
(109)
|
|
734
|
Income before income
taxes
|
59,550
|
|
96,774
|
|
161,818
|
|
158,867
|
Income tax
provision
|
(14,379)
|
|
(16,590)
|
|
(44,252)
|
|
(18,797)
|
Net income
|
$
45,171
|
|
$
80,184
|
|
$
117,566
|
|
$
140,070
|
Diluted earnings per
share
|
$
0.65
|
|
$
1.04
|
|
$
1.60
|
|
$
1.81
|
Weighted average
diluted shares
|
69,140
|
|
77,135
|
|
73,287
|
|
77,216
|
DESIGNER BRANDS
INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited and in thousands)
|
|
|
October 29,
2022
|
|
January 29,
2022
|
|
October 30,
2021
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
62,507
|
|
$
72,691
|
|
$
83,069
|
Receivables,
net
|
228,746
|
|
199,826
|
|
231,391
|
Inventories
|
681,843
|
|
586,429
|
|
602,101
|
Prepaid expenses and
other current assets
|
53,950
|
|
55,270
|
|
53,756
|
Total current
assets
|
1,027,046
|
|
914,216
|
|
970,317
|
Property and equipment,
net
|
233,515
|
|
256,786
|
|
263,581
|
Operating lease
assets
|
691,032
|
|
647,221
|
|
664,646
|
Goodwill
|
93,655
|
|
93,655
|
|
93,655
|
Intangible assets,
net
|
19,273
|
|
15,527
|
|
16,005
|
Equity
investments
|
64,246
|
|
55,578
|
|
56,623
|
Other assets
|
42,611
|
|
31,651
|
|
29,117
|
Total assets
|
$
2,171,378
|
|
$
2,014,634
|
|
$
2,093,944
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
payable
|
$
315,996
|
|
$
340,877
|
|
$
401,280
|
Accrued
expenses
|
213,905
|
|
215,812
|
|
211,017
|
Current maturities of
long-term debt
|
—
|
|
—
|
|
62,500
|
Current operating
lease liabilities
|
187,619
|
|
202,228
|
|
206,065
|
Total current
liabilities
|
717,520
|
|
758,917
|
|
880,862
|
Long-term
debt
|
415,467
|
|
225,536
|
|
165,422
|
Non-current operating
lease liabilities
|
628,820
|
|
593,429
|
|
622,273
|
Other non-current
liabilities
|
26,059
|
|
24,356
|
|
31,726
|
Total shareholders'
equity
|
383,512
|
|
412,396
|
|
393,661
|
Total liabilities and
shareholders' equity
|
$
2,171,378
|
|
$
2,014,634
|
|
$
2,093,944
|
DESIGNER BRANDS
INC. NON-GAAP RECONCILIATIONS (unaudited and
in thousands, except per share amounts)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
October 30,
2021
|
Operating
expenses
|
$
(222,232)
|
|
$
(211,909)
|
|
$
(674,348)
|
|
$
(637,108)
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Restructuring and
termination costs
|
850
|
|
—
|
|
2,456
|
|
2,836
|
Target acquisition
costs (credits)
|
400
|
|
(2,107)
|
|
400
|
|
3,226
|
Adjusted operating
expenses
|
$
(220,982)
|
|
$
(214,016)
|
|
$
(671,492)
|
|
$
(631,046)
|
Operating
profit
|
$
64,528
|
|
$
104,308
|
|
$
185,319
|
|
$
182,725
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Restructuring and
termination costs
|
850
|
|
—
|
|
2,456
|
|
2,836
|
Target acquisition
costs (credits)
|
400
|
|
(2,107)
|
|
400
|
|
3,226
|
Impairment
charges
|
1,349
|
|
—
|
|
4,237
|
|
1,174
|
Total non-GAAP
adjustments
|
2,599
|
|
(2,107)
|
|
7,093
|
|
7,236
|
Adjusted operating
profit
|
$
67,127
|
|
$
102,201
|
|
$
192,412
|
|
$
189,961
|
Net income
|
$
45,171
|
|
$
80,184
|
|
$
117,566
|
|
$
140,070
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Restructuring and
termination costs
|
850
|
|
—
|
|
2,456
|
|
2,836
|
Target acquisition
costs (credits)
|
400
|
|
(2,107)
|
|
400
|
|
3,226
|
Impairment
charges
|
1,349
|
|
—
|
|
4,237
|
|
1,174
|
Loss on extinguishment
of debt and write-off of debt issuance costs
|
—
|
|
—
|
|
12,862
|
|
—
|
Foreign currency
transaction losses (gains)
|
152
|
|
(172)
|
|
109
|
|
(734)
|
Total non-GAAP
adjustments before tax effect
|
2,751
|
|
(2,279)
|
|
20,064
|
|
6,502
|
Tax effect of non-GAAP
adjustments
|
(711)
|
|
560
|
|
(5,085)
|
|
(1,619)
|
Valuation allowance
change on deferred tax assets
|
(1,070)
|
|
(11,873)
|
|
(3,565)
|
|
(25,450)
|
Total adjustments,
after tax
|
970
|
|
(13,592)
|
|
11,414
|
|
(20,567)
|
Adjusted net
income
|
$
46,141
|
|
$
66,592
|
|
$
128,980
|
|
$
119,503
|
Diluted earnings per
share
|
$
0.65
|
|
$
1.04
|
|
$
1.60
|
|
$
1.81
|
Adjusted diluted
earnings per share
|
$
0.67
|
|
$
0.86
|
|
$
1.76
|
|
$
1.55
|
Non-GAAP Measures
To supplement amounts presented in our unaudited condensed
consolidated financial statements determined in accordance with
accounting principles generally accepted in the United States ("GAAP"), the Company uses
certain non-GAAP financial measures, including adjusted operating
expenses, adjusted operating profit, adjusted net income, and
adjusted diluted earnings per share as shown in the table above.
These measures adjust for the effects of: (1) restructuring and
termination costs; (2) target acquisition costs (credits); (3)
impairment charges; (4) loss on extinguishment of debt and
write-off of debt issuance costs; (5) foreign currency transaction
losses (gains); (6) the net tax effect of such items; and (7) the
change in the valuation allowance on deferred tax assets. The
unaudited reconciliation of adjusted results should not be
construed as an alternative to the reported results determined in
accordance with GAAP. These financial measures are not based on any
standardized methodology and are not necessarily comparable to
similar measures presented by other companies. The Company believes
these non-GAAP measures provide useful information to both
management and investors to increase comparability to prior periods
by adjusting for certain items that may not be indicative of core
operating measures and to better identify trends in our business.
The adjusted financial results are used by management to, and allow
investors to, evaluate the operating performance of the Company on
a comparable basis, when reviewed in conjunction with the Company's
GAAP statements. These amounts are not determined in accordance
with GAAP and therefore should not be used exclusively in
evaluating the Company's business and operations.
Comparable Sales Performance Metric
We consider the change in comparable sales from the same
previous year period, a primary metric commonly used throughout the
retail industry, to be an important indicator of the performance of
our retail and direct-to-consumer businesses. We include in our
comparable sales metric stores in operation for at least 14 months
at the beginning of the fiscal year. Stores are added to the
comparable base at the beginning of the year and are dropped for
comparative purposes in the quarter in which they are closed.
Comparable sales include stores temporarily closed as a result of
the COVID-19 pandemic as management continues to believe that this
metric is meaningful to monitor our performance. Comparable sales
also include e-commerce sales. Comparable sales for the Canada
Retail segment exclude the impact of foreign currency translation
and are calculated by translating current period results at the
foreign currency exchange rate used in the comparable period of the
prior year. Comparable sales for the Brand Portfolio segment
include the direct-to-consumer e-commerce site www.vincecamuto.com.
The calculation of comparable sales varies across the retail
industry and, as a result, the calculations of other retail
companies may not be consistent with our calculation.
View original
content:https://www.prnewswire.com/news-releases/designer-brands-inc-reports-third-quarter-2022-financial-results-301690885.html
SOURCE Designer Brands Inc.