Designer Brands narrows Q4 loss, announces temporary closure of stores
Columbus, Ohio-based footwear and accessories maker Designer Brands Inc. reported a fourth-quarter loss of $7.6 million, or $0.11 per diluted share, on Tuesday and announced the closure of its North American retail locations in response to the ongoing Covid-19 pandemic.
The company’s net loss for the fourth quarter ended February 1, 2020, reflects significant progress compared to the loss of $45.7 million, or $0.58 per diluted share, reported by the group in the prior-year period.
Quarterly sales at Designer Brands, which owns the DSW Designer Shoe Warehouse, The Shoe Company and Shoe Warehouse retail banners, as well as the Camuto manufacturing group, decreased 1.5% to $829.6 million, down from $842.1 million in Q4 2018.
However, the company managed to make progress with its net loss thanks to reductions made in its expenses, while Q4 2018’s bottom line was also negatively impacted by impairment charges of around $31.7 million.
For the full fiscal year 2019, Designer Brands, which also owns footwear licensing rights for the Jessica Simpson, Lucky Brand and Max Studio brands, reported net sales of $3.5 billion, up 9.9% from $3.2 billion in the previous year, while comparable sales rose 0.8%.
Annual net income was $94.5 million, or $1.27 per diluted share, up from a loss of $20.5 million, or $0.26 per diluted share, in fiscal 2018.
On Tuesday Designer Brands also joined a growing list of U.S.-based retailers closing their stores in North America and announced that it is temporarily shutting its own retail locations in the region. According to the company, all retail employees will continue to be compensated in the near term.
The group’s warehouses will remain open in order to fulfill online orders but will now operate under the company’s “emergency preparedness plan.”
In what Designer Brands CEO Roger Rawlins described as “an abundance of caution,” the company has also reduced its dividend for the first quarter of fiscal 2020 “to preserve our financial flexibility during this difficult time.”
“We are focused on preserving the long-term sustainability of our business,” concluded Rawlins. “While we face new challenges as we progress through this extraordinarily challenging time, we have not lost sight of our overarching goal of becoming the leading footwear and accessories company in North America.”
Due to the uncertainty caused by the ongoing Covid-19 pandemic, Designer Brands did not issue financial guidance for fiscal 2020 but committed to providing updates on the subject as soon as possible.
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