Owned Brands Net Sales up 32.1% for 2022
Compared to Last Year
2022 Gross Margin Up 400 Basis Points over
2019 as Brand Building Strategy Takes Hold
COLUMBUS, Ohio, March 16,
2023 /CNW/ -- 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 and year ended
January 28, 2023.
Roger Rawlins, Chief Executive
Officer, stated, "Our 2022 results clearly showcase the power and
success of our brand building strategy with our Owned Brands
growing over 32% to last year while delivering gross margins 400
basis points higher than those we saw in 2019. These results
showcase the successful execution of our strategy. I am incredibly
proud of our team and their tireless efforts, and I am excited
about what lies ahead for Designer Brands."
Doug Howe, President of DSW and
incoming Chief Executive Officer, added, "Looking ahead, we are
confident in the strength of our business as we work to integrate
new and recognizable names into the Designer Brands family,
including Keds, Le Tigre, Topo
Athletic, and Hush Puppies. Although we are navigating through a
volatile environment, we are well-positioned to offer great value
and a diverse assortment of product to our customers as we head
into 2023. We will continue to be prudent in managing our expenses
and inventory and drive growth in our portfolio of increasingly
diversified Owned Brands."
Fourth Quarter Operating Results (Unless
otherwise stated, all comparisons are to the fourth quarter
of 2021)
- Net sales decreased 7.5% to $760.5
million.
- Comparable sales decreased by 5.5%.
- Gross profit decreased to $222.0
million versus $254.2 million
last year, and gross margin was 29.2% as compared to 30.9% last
year.
- Reported net income attributable to Designer Brands Inc. was
$45.1 million, or diluted earnings
per share ("EPS") of $0.66, including
net benefits of $0.59 per diluted
share from adjusted items, primarily related to the change in
valuation allowance on deferred tax assets, partially offset by
restructuring and termination costs and CEO transition costs.
- Adjusted net income was $4.7
million, or adjusted diluted EPS of $0.07.
Full Year Operating Results (unless otherwise
stated, all comparisons are to full year 2021)
- Net sales increased 3.7% to $3.3
billion.
- Comparable sales increased by 4.4%.
- Gross profit was flat to last year at $1.1 billion, and gross margin was 32.6% as
compared to 33.4% last year.
- Reported net income attributable to Designer Brands Inc. was
$162.7 million, or diluted EPS of
$2.26, including net benefits of
$0.41 per diluted share from adjusted
items, primarily related to the change in valuation allowance on
deferred tax assets, partially offset by the loss on extinguishment
of debt and write-off of debt issuance costs, restructuring and
termination costs, CEO transition costs, and impairment
charges.
- Adjusted net income was $133.7
million, or adjusted diluted EPS of $1.85.
Liquidity Highlights
- Cash and cash equivalents totaled $58.8
million at the end of 2022, compared to $72.7 million at the end of 2021, with
$243.9 million available for
borrowings under our senior secured asset-based revolving credit
facility ("ABL Revolver"). Debt totaled $281.0 million at the end of 2022 compared to
$225.5 million at the end of
2021.
- The Company ended the year with inventories of $605.7 million compared to $586.4 million at the end of 2021.
Return to Shareholders
• For the year ended January 28,
2023, 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 January 28, 2023.
• A dividend of $0.05 per
share of Class A and Class B common shares will be paid on
April 14, 2023 to shareholders of
record at the close of business on March 31,
2023.
Store Openings and Closings
During the fourth quarter of 2022, we closed three stores in the
U.S. with no changes to the store count in Canada, resulting in a total of 501 U.S.
stores and 138 Canadian stores at the end of 2022.
Outlook for 2023
The Company has announced the following guidance for the full
year 2023:
Metric
|
|
Fiscal 2023
Guidance
|
Net Sales:
|
|
|
Designer Brands net
sales growth, excluding Keds
|
|
Down mid-single
digits
|
Incremental net sales
from Keds acquisition
|
|
$75.0 million to $85.0
million
|
Diluted EPS:
|
|
|
Designer Brands,
excluding Keds
|
|
$1.65 -
$1.75
|
Contribution from Keds
acquisition
|
|
~$0.00
|
Webcast and Conference Call
The Company is hosting a conference call today at 8:30 am 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 5071723
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/bkDVPKByrX8
For those unable to listen to the live webcast, an archived
version will be available at the same location until March 23, 2023. 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: 2475851
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: uncertain general economic
conditions, including inflationary pressures and rising interest
rates, and the related impacts to consumer discretionary spending,
as well as supply chain disruptions and pressures; risks and
uncertainties related to the ongoing coronavirus ("COVID-19")
pandemic, any future COVID-19 resurgence, and any other adverse
public health developments; 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 stores, whether as
a result of the COVID-19 pandemic, reliance on third-party
providers, or otherwise; our ability to manage our Chief Executive
Officer transition, retain our existing management team, and
continue to attract qualified new personnel; risks related to cyber
security threats and privacy or data security breaches or the
potential loss or disruption of our information technology
("IT") systems; risks related to the implementation of an
enterprise resource planning system ("ERP") software
solution and other IT systems; our reliance on our loyalty
programs and marketing to drive traffic, sales, and
customer loyalty; 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, 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; domestic and global political and social conditions
and the potential impact of geopolitical turmoil or conflict;
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 latest Annual Report on Form 10-K or other
reports filed with the Securities and Exchange Commission. All
forward-looking statements speak only as of the time
when made. 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)
|
January 28,
2023
|
|
January 29,
2022
|
|
Change
|
|
Amount
|
|
% of Total
Segment
Net Sales
|
|
Amount
|
|
% of Total
Segment
Net Sales
|
|
Amount
|
|
%
|
Segment net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
648,314
|
|
84.1 %
|
|
$
716,347
|
|
84.0 %
|
|
$ (68,033)
|
|
(9.5) %
|
Canada
Retail
|
66,353
|
|
8.6 %
|
|
61,828
|
|
7.3 %
|
|
4,525
|
|
7.3 %
|
Brand
Portfolio
|
56,450
|
|
7.3 %
|
|
74,149
|
|
8.7 %
|
|
(17,699)
|
|
(23.9) %
|
Total segment net
sales
|
771,117
|
|
100.0 %
|
|
852,324
|
|
100.0 %
|
|
(81,207)
|
|
(9.5) %
|
Elimination of
intersegment net sales
|
(10,571)
|
|
|
|
(29,698)
|
|
|
|
19,127
|
|
(64.4) %
|
Consolidated net
sales
|
$
760,546
|
|
|
|
$
822,626
|
|
|
|
$ (62,080)
|
|
(7.5) %
|
|
|
|
Twelve months
ended
|
|
|
(dollars in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
|
Change
|
|
Amount
|
|
% of Total
Segment
Net Sales
|
|
Amount
|
|
% of Total
Segment
Net Sales
|
|
Amount
|
|
%
|
Segment net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$
2,791,513
|
|
82.0 %
|
|
$
2,769,706
|
|
84.2 %
|
|
$
21,807
|
|
0.8 %
|
Canada
Retail
|
283,241
|
|
8.3 %
|
|
234,809
|
|
7.1 %
|
|
48,432
|
|
20.6 %
|
Brand
Portfolio
|
327,715
|
|
9.7 %
|
|
286,024
|
|
8.7 %
|
|
41,691
|
|
14.6 %
|
Total segment net
sales
|
3,402,469
|
|
100.0 %
|
|
3,290,539
|
|
100.0 %
|
|
111,930
|
|
3.4 %
|
Elimination of
intersegment net sales
|
(87,041)
|
|
|
|
(93,956)
|
|
|
|
6,915
|
|
(7.4) %
|
Consolidated net
sales
|
$
3,315,428
|
|
|
|
$
3,196,583
|
|
|
|
$ 118,845
|
|
3.7 %
|
Net Sales by Brand
Category
|
(in
thousands)
|
U.S. Retail
|
|
Canada
Retail
|
|
Brand
Portfolio
|
|
Eliminations
|
|
Consolidated
|
Three months ended
January 28, 2023
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
129,398
|
|
$
—
|
|
$
13,710
|
|
$
—
|
|
$
143,108
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
32,169
|
|
—
|
|
32,169
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
10,571
|
|
(10,571)
|
|
—
|
Total Owned
Brands
|
129,398
|
|
—
|
|
56,450
|
|
(10,571)
|
|
175,277
|
National
brands
|
518,916
|
|
—
|
|
—
|
|
—
|
|
518,916
|
Canada
Retail(2)
|
—
|
|
66,353
|
|
—
|
|
—
|
|
66,353
|
Total net
sales
|
$
648,314
|
|
$
66,353
|
|
$
56,450
|
|
$
(10,571)
|
|
$
760,546
|
Three months ended
January 29, 2022
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
121,278
|
|
$
—
|
|
$
9,260
|
|
$
—
|
|
$
130,538
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
35,191
|
|
—
|
|
35,191
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
29,698
|
|
(29,698)
|
|
—
|
Total Owned
Brands
|
121,278
|
|
—
|
|
74,149
|
|
(29,698)
|
|
165,729
|
National
brands
|
595,069
|
|
—
|
|
—
|
|
—
|
|
595,069
|
Canada
Retail(2)
|
—
|
|
61,828
|
|
—
|
|
—
|
|
61,828
|
Total net
sales
|
$
716,347
|
|
$
61,828
|
|
$
74,149
|
|
$
(29,698)
|
|
$
822,626
|
Twelve months ended
January 28, 2023
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
569,741
|
|
$
—
|
|
$
37,840
|
|
$
—
|
|
$
607,581
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
202,834
|
|
—
|
|
202,834
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
87,041
|
|
(87,041)
|
|
—
|
Total Owned
Brands
|
569,741
|
|
—
|
|
327,715
|
|
(87,041)
|
|
810,415
|
National
brands
|
2,221,772
|
|
—
|
|
—
|
|
—
|
|
2,221,772
|
Canada
Retail(2)
|
—
|
|
283,241
|
|
—
|
|
—
|
|
283,241
|
Total net
sales
|
$
2,791,513
|
|
$
283,241
|
|
$
327,715
|
|
$
(87,041)
|
|
$
3,315,428
|
Twelve months ended
January 29, 2022
|
|
|
|
|
|
|
|
|
|
Owned
Brands:(1)
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer
|
$
421,398
|
|
$
—
|
|
$
27,876
|
|
$
—
|
|
$
449,274
|
External customer
wholesale and commission income
|
—
|
|
—
|
|
164,192
|
|
—
|
|
164,192
|
Intersegment wholesale
and commission income
|
—
|
|
—
|
|
93,956
|
|
(93,956)
|
|
—
|
Total Owned
Brands
|
421,398
|
|
—
|
|
286,024
|
|
(93,956)
|
|
613,466
|
National
brands
|
2,348,308
|
|
—
|
|
—
|
|
—
|
|
2,348,308
|
Canada
Retail(2)
|
—
|
|
234,809
|
|
—
|
|
—
|
|
234,809
|
Total net
sales
|
$
2,769,706
|
|
$ 234,809
|
|
$
286,024
|
|
$
(93,956)
|
|
$
3,196,583
|
|
(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
|
|
Twelve months
ended
|
|
January 28,
2023
|
|
January 29,
2022
|
|
January 28,
2023
|
|
January 29,
2022
|
Change in comparable
sales:
|
|
|
|
|
|
|
|
U.S. Retail
segment
|
(8.1) %
|
|
36.3 %
|
|
2.0 %
|
|
55.0 %
|
Canada Retail
segment
|
15.9 %
|
|
42.3 %
|
|
28.8 %
|
|
20.1 %
|
Brand Portfolio segment
- direct-to-consumer channel
|
44.4 %
|
|
50.9 %
|
|
34.5 %
|
|
30.9 %
|
Total
|
(5.5) %
|
|
36.9 %
|
|
4.4 %
|
|
51.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store
Count
|
(square footage in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
|
Number of
Stores
|
|
Square
Footage
|
|
Number of
Stores
|
|
Square
Footage
|
U.S. Retail segment -
DSW stores
|
501
|
|
10,092
|
|
508
|
|
10,308
|
Canada Retail
segment:
|
|
|
|
|
|
|
|
The Shoe Company
stores
|
113
|
|
596
|
|
115
|
|
607
|
DSW stores
|
25
|
|
496
|
|
25
|
|
496
|
|
138
|
|
1,092
|
|
140
|
|
1,103
|
Total number of
stores
|
639
|
|
11,184
|
|
648
|
|
11,411
|
Gross
Profit
|
|
Three months
ended
|
|
|
|
|
|
|
(dollars in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
|
Basis
Points
|
Segment gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$ 188,315
|
|
29.0 %
|
|
$ 225,490
|
|
31.5 %
|
|
$ (37,175)
|
|
(16.5) %
|
|
(250)
|
Canada
Retail
|
17,976
|
|
27.1 %
|
|
18,537
|
|
30.0 %
|
|
(561)
|
|
(3.0) %
|
|
(290)
|
Brand
Portfolio
|
12,031
|
|
21.3 %
|
|
13,986
|
|
18.9 %
|
|
(1,955)
|
|
(14.0) %
|
|
240
|
Total segment gross
profit
|
218,322
|
|
28.3 %
|
|
258,013
|
|
30.3 %
|
|
(39,691)
|
|
(15.4) %
|
|
(200)
|
Net recognition
(elimination) of intersegment gross profit
|
3,669
|
|
|
|
(3,785)
|
|
|
|
7,454
|
|
|
|
|
Consolidated gross
profit
|
$ 221,991
|
|
29.2 %
|
|
$ 254,228
|
|
30.9 %
|
|
$ (32,237)
|
|
(12.7) %
|
|
(170)
|
|
|
|
|
|
|
Twelve months
ended
|
|
|
(dollars in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
|
Change
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
% of
Segment
Net Sales
|
|
Amount
|
|
%
|
|
Basis
Points
|
Segment gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Retail
|
$ 904,583
|
|
32.4 %
|
|
$ 933,555
|
|
33.7 %
|
|
$ (28,972)
|
|
(3.1) %
|
|
(130)
|
Canada
Retail
|
99,121
|
|
35.0 %
|
|
76,728
|
|
32.7 %
|
|
22,393
|
|
29.2 %
|
|
230
|
Brand
Portfolio
|
72,006
|
|
22.0 %
|
|
66,774
|
|
23.3 %
|
|
5,232
|
|
7.8 %
|
|
(130)
|
Total segment gross
profit
|
1,075,710
|
|
31.6 %
|
|
1,077,057
|
|
32.7 %
|
|
(1,347)
|
|
(0.1) %
|
|
(110)
|
Net recognition
(elimination) of intersegment gross profit
|
3,515
|
|
|
|
(8,420)
|
|
|
|
11,935
|
|
|
|
|
Consolidated gross
profit
|
$
1,079,225
|
|
32.6 %
|
|
$ 1,068,637
|
|
33.4 %
|
|
$
10,588
|
|
1.0 %
|
|
(80)
|
Intersegment
Eliminations
|
|
Three months
ended
|
(in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
Recognition
(elimination) of intersegment activity:
|
|
|
|
Net sales recognized by
Brand Portfolio segment
|
$
(10,571)
|
|
$
(29,698)
|
Cost of
sales:
|
|
|
|
Cost of sales
recognized by Brand Portfolio segment
|
6,085
|
|
18,447
|
Recognition of
intersegment gross profit for inventory previously purchased that
was subsequently sold to external customers during the current
period
|
8,155
|
|
7,466
|
|
$
3,669
|
|
$
(3,785)
|
|
|
|
Twelve months
ended
|
(in
thousands)
|
January 28,
2023
|
|
January 29,
2022
|
Recognition
(elimination) of intersegment activity:
|
|
|
|
Net sales recognized by
Brand Portfolio segment
|
$
(87,041)
|
|
$
(93,956)
|
Cost of
sales:
|
|
|
|
Cost of sales
recognized by Brand Portfolio segment
|
58,234
|
|
62,039
|
Recognition of
intersegment gross profit for inventory previously purchased that
was subsequently sold to external customers during the current
period
|
32,322
|
|
23,497
|
|
$
3,515
|
|
$
(8,420)
|
DESIGNER BRANDS
INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited and in thousands, except per share
amounts)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
January 28,
2023
|
|
January 29,
2022
|
|
January 28,
2023
|
|
January 29,
2022
|
Net sales
|
$
760,546
|
|
$
822,626
|
|
$
3,315,428
|
|
$
3,196,583
|
Cost of
sales
|
(538,555)
|
|
(568,398)
|
|
(2,236,203)
|
|
(2,127,946)
|
Gross profit
|
221,991
|
|
254,228
|
|
1,079,225
|
|
1,068,637
|
Operating
expenses
|
(222,034)
|
|
(233,574)
|
|
(896,382)
|
|
(870,682)
|
Income from equity
investments
|
2,194
|
|
2,388
|
|
8,864
|
|
8,986
|
Impairment
charges
|
(80)
|
|
(546)
|
|
(4,317)
|
|
(1,720)
|
Operating
profit
|
2,071
|
|
22,496
|
|
187,390
|
|
205,221
|
Interest expense,
net
|
(4,344)
|
|
(7,537)
|
|
(14,874)
|
|
(32,129)
|
Loss on extinguishment
of debt and write-off of debt issuance costs
|
—
|
|
—
|
|
(12,862)
|
|
—
|
Non-operating expenses,
net
|
(21)
|
|
(801)
|
|
(130)
|
|
(67)
|
Income (loss) before
income taxes
|
(2,294)
|
|
14,158
|
|
159,524
|
|
173,025
|
Income tax benefit
(provision)
|
47,394
|
|
253
|
|
3,142
|
|
(18,544)
|
Net income
|
45,100
|
|
14,411
|
|
162,666
|
|
154,481
|
Net loss attributable
to redeemable noncontrolling interest
|
10
|
|
—
|
|
10
|
|
—
|
Net income attributable
to Designer Brands Inc.
|
$
45,110
|
|
$
14,411
|
|
$
162,676
|
|
$
154,481
|
Diluted earnings per
share attributable to Designer Brands Inc.
|
$
0.66
|
|
$
0.19
|
|
$
2.26
|
|
$
2.00
|
Weighted average
diluted shares
|
67,922
|
|
77,549
|
|
72,101
|
|
77,268
|
DESIGNER BRANDS
INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited and in thousands)
|
|
|
January 28,
2023
|
|
January 29,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
58,766
|
|
$
72,691
|
Receivables,
net
|
77,763
|
|
199,826
|
Inventories
|
605,652
|
|
586,429
|
Prepaid expenses
and other current assets
|
47,750
|
|
55,270
|
Total current
assets
|
789,931
|
|
914,216
|
Property and equipment,
net
|
235,430
|
|
256,786
|
Operating lease
assets
|
700,373
|
|
647,221
|
Goodwill
|
97,115
|
|
93,655
|
Intangible assets,
net
|
31,866
|
|
15,527
|
Deferred tax
assets
|
48,285
|
|
356
|
Equity
investments
|
63,820
|
|
55,578
|
Other assets
|
42,798
|
|
31,295
|
Total assets
|
$
2,009,618
|
|
$
2,014,634
|
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
255,364
|
|
$
340,877
|
Accrued
expenses
|
190,676
|
|
215,812
|
Current
operating lease liabilities
|
190,086
|
|
202,228
|
Total current
liabilities
|
636,126
|
|
758,917
|
Long-term
debt
|
281,035
|
|
225,536
|
Non-current operating
lease liabilities
|
631,412
|
|
593,429
|
Other non-current
liabilities
|
24,989
|
|
24,356
|
Total
liabilities
|
1,573,562
|
|
1,602,238
|
Redeemable
noncontrolling interest
|
3,155
|
|
—
|
Total shareholders'
equity
|
432,901
|
|
412,396
|
Total liabilities,
redeemable noncontrolling interest, and shareholders'
equity
|
$
2,009,618
|
|
$
2,014,634
|
DESIGNER BRANDS
INC. NON-GAAP RECONCILIATION (unaudited and in
thousands, except per share amounts)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
January 28,
2023
|
|
January 29,
2022
|
|
January 28,
2023
|
|
January 29,
2022
|
Operating
expenses
|
$
(222,034)
|
|
$
(233,574)
|
|
$
(896,382)
|
|
$
(870,682)
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
CEO transition
costs
|
3,750
|
|
—
|
|
3,750
|
|
—
|
Restructuring and
termination costs
|
6,989
|
|
1,153
|
|
9,445
|
|
3,989
|
Acquisition-related
costs and target acquisition costs
|
2,247
|
|
—
|
|
2,647
|
|
3,226
|
Total non-GAAP
adjustments
|
12,986
|
|
1,153
|
|
15,842
|
|
7,215
|
Adjusted operating
expenses
|
$
(209,048)
|
|
$
(232,421)
|
|
$
(880,540)
|
|
$
(863,467)
|
Operating
profit
|
$
2,071
|
|
$
22,496
|
|
$
187,390
|
|
$
205,221
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
CEO transition
costs
|
3,750
|
|
—
|
|
3,750
|
|
—
|
Restructuring and
termination costs
|
6,989
|
|
1,153
|
|
9,445
|
|
3,989
|
Acquisition-related
costs and target acquisition costs
|
2,247
|
|
—
|
|
2,647
|
|
3,226
|
Impairment
charges
|
80
|
|
546
|
|
4,317
|
|
1,720
|
Total non-GAAP
adjustments
|
13,066
|
|
1,699
|
|
20,159
|
|
8,935
|
Adjusted operating
profit
|
$
15,137
|
|
$
24,195
|
|
$
207,549
|
|
$
214,156
|
Net income attributable
to Designer Brands Inc.
|
$
45,110
|
|
$
14,411
|
|
$
162,676
|
|
$
154,481
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
CEO transition
costs
|
3,750
|
|
—
|
|
3,750
|
|
—
|
Restructuring and
termination costs
|
6,989
|
|
1,153
|
|
9,445
|
|
3,989
|
Acquisition-related
costs and target acquisition costs
|
2,247
|
|
—
|
|
2,647
|
|
3,226
|
Impairment
charges
|
80
|
|
546
|
|
4,317
|
|
1,720
|
Loss on extinguishment
of debt and write-off of debt issuance costs
|
—
|
|
—
|
|
12,862
|
|
—
|
Foreign currency
transaction losses
|
21
|
|
801
|
|
130
|
|
67
|
Total non-GAAP
adjustments before tax effect
|
13,087
|
|
2,500
|
|
33,151
|
|
9,002
|
Tax effect of non-GAAP
adjustments
|
(1,428)
|
|
(672)
|
|
(6,513)
|
|
(2,291)
|
Valuation allowance
change on deferred tax assets
|
(52,089)
|
|
(4,500)
|
|
(55,654)
|
|
(29,950)
|
Total non-GAAP
adjustments, after tax
|
(40,430)
|
|
(2,672)
|
|
(29,016)
|
|
(23,239)
|
Net loss attributable
to redeemable noncontrolling interest
|
(10)
|
|
—
|
|
(10)
|
|
—
|
Adjusted net
income
|
$
4,670
|
|
$
11,739
|
|
$
133,650
|
|
$
131,242
|
Diluted earnings per
share
|
$
0.66
|
|
$
0.19
|
|
$
2.26
|
|
$
2.00
|
Adjusted diluted
earnings per share
|
$
0.07
|
|
$
0.15
|
|
$
1.85
|
|
$
1.70
|
Non-GAAP Measures
To supplement amounts presented in our 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) CEO transition costs; (2) restructuring and
termination costs, including severance charges other than those
included in CEO transition costs; (3) acquisition-related costs and
target acquisition costs; (4) impairment charges; (5) loss on
extinguishment of debt and write-off of debt issuance costs; (6)
foreign currency transaction losses; (7) the net tax impact of such
items; (8) the change in the valuation allowance on deferred tax
assets; and (9) net loss attributable to redeemable noncontrolling
interest. The unaudited 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 financial 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 compared to prior periods, 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.
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SOURCE Designer Brands Inc.