Breaking Down Designer Brands Inc. (DBI) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Have you ever wondered about the financial stability of retail giants like Designer Brands Inc. (DBI)? In 2024, DBI faced a mix of challenges and strategic realignments, making it crucial for investors to understand the underlying financial dynamics. Net sales for the full year reached $3.0 billion, a 2.1% decrease compared to the previous year, and total comparable sales decreased by 1.7%. But, the company repurchased 10.3 million Class A common shares at a cost of $68.6 million, and still, $19.7 million remained available for future repurchases. Want to know how these figures play into the overall health of DBI? Keep reading to discover key insights into DBI's financial performance and what it means for your investment strategy.

Designer Brands Inc. (DBI) Revenue Analysis

To understand the financial health of Designer Brands Inc. (DBI), a deep dive into its revenue streams is essential. This analysis covers the primary sources of revenue, year-over-year growth rates, the contribution of different business segments, and any significant changes in these streams.

Designer Brands Inc.'s revenue is generated primarily through the sale of footwear and accessories. These sales occur through a variety of channels, including:

• Retail Stores: DBI operates a large network of stores under various banners.
• E-commerce: Online sales through its websites.
• Licensed Departments: Sales through leased departments in other retail stores.
• Wholesale: Sales to retailers and distributors.

Analyzing the year-over-year revenue growth rate provides insights into DBI's performance and market position. According to the Designer Brands Inc. Q4 2024 Earnings Call Transcript:

• Total sales were $727.0 million, a decrease of 10.8% compared to 2023.
• Comparable sales decreased 12.9%.
• U.S. Retail segment sales decreased 14.4% to $529.6 million.
• Brand Portfolio segment sales decreased 1.4% to $98.6 million.

A breakdown of the contributions from different business segments to Designer Brands Inc.'s overall revenue helps to identify strengths and weaknesses within the company's operations. For fiscal year 2024, the primary segments and their contributions are:

• U.S. Retail: Contributed $529.6 million.
• Brand Portfolio: Contributed $98.6 million.

Significant changes in revenue streams often reflect strategic shifts, market dynamics, or economic factors. Notable changes in DBI's revenue streams include:

• 2024: Decrease in total sales by 10.8%, with a 12.9% decrease in comparable sales.
• U.S. Retail Segment: Sales decreased by 14.4% to $529.6 million.
• Brand Portfolio Segment: Sales decreased slightly by 1.4% to $98.6 million.

These declines reflect current market challenges and shifts in consumer behavior, impacting overall revenue performance. For more insights into the company's values, see Mission Statement, Vision, & Core Values of Designer Brands Inc. (DBI).

Designer Brands Inc. (DBI) Profitability Metrics

Understanding Designer Brands Inc.'s (DBI) financial health requires a close examination of its profitability metrics. These metrics provide insights into how efficiently the company generates profit from its revenue and assets. Here's a detailed look at DBI's gross profit, operating profit, and net profit margins.

Gross Profit: Gross profit is calculated by deducting the cost of goods sold (COGS) from the net sales revenue. It represents the profit a company makes after deducting the costs associated with producing and selling its products or services. A higher gross profit indicates that a company can efficiently manage its production costs and pricing.

Operating Profit: Operating profit, also known as earnings before interest and taxes (EBIT), is calculated by deducting operating expenses from gross profit. Operating expenses include costs such as salaries, rent, marketing, and depreciation. Operating profit reflects a company's profitability from its core business operations, excluding the effects of financing and taxes.

Net Profit: Net profit, also known as net income, is the profit remaining after deducting all expenses, including interest, taxes, and other non-operating expenses, from revenue. Net profit represents the actual profit available to the company's owners or shareholders after all obligations have been met.

Profitability Trends and Ratios: Analyzing the trends in profitability over time and comparing DBI's profitability ratios with industry averages can provide valuable insights. Profitability ratios, such as gross profit margin, operating profit margin, and net profit margin, are calculated by dividing the respective profit figures by net sales revenue. These ratios help assess a company's ability to generate profit relative to its sales.

Here's a look at some key profitability metrics for Designer Brands Inc. based on the 2024 fiscal year:

• Gross Profit Margin: In fiscal year 2024, Designer Brands Inc. reported a gross profit of $1.14 billion. With net sales at $3.23 billion, the gross profit margin was approximately 35.3%.
• Operating Profit Margin: The operating profit for 2024 stood at $114.1 million, resulting in an operating profit margin of about 3.5% when compared to the net sales of $3.23 billion.
• Net Profit Margin: Designer Brands Inc.'s net profit for the same period was $70.4 million, translating to a net profit margin of roughly 2.2%.

Analyzing these figures over time, alongside industry benchmarks, can reveal important trends and insights into DBI's financial performance. For instance, improvements in gross margin may indicate better cost management or pricing strategies, while changes in operating margin can reflect the effectiveness of operational efficiencies.

Additionally, it’s crucial to compare DBI's profitability ratios with those of its competitors and industry averages to gauge its relative performance. If DBI's margins are consistently lower than its peers, it may indicate areas for improvement in cost control, pricing, or operational efficiency.

In summary, a comprehensive analysis of Designer Brands Inc.'s profitability metrics provides valuable insights into its financial health and performance. By monitoring trends in gross profit, operating profit, and net profit margins, investors and analysts can gain a deeper understanding of the company's ability to generate profits and create value for its shareholders.

Explore more insights on Designer Brands Inc.'s financial health: Breaking Down Designer Brands Inc. (DBI) Financial Health: Key Insights for Investors

Designer Brands Inc. (DBI) Debt vs. Equity Structure

Understanding how Designer Brands Inc. (DBI) finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial strategy, risk profile, and potential for future returns. Here's a breakdown of DBI's debt versus equity structure:

As of February 3, 2024, Designer Brands Inc. (DBI) reported a total debt of $382.9 million. This figure includes both short-term and long-term obligations, reflecting the company's borrowing strategy to fund its various operational and strategic initiatives.

• Short-term Debt: Represents obligations due within one year.
• Long-term Debt: Consists of obligations due beyond one year.

The debt-to-equity (D/E) ratio is a key metric used to assess a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. As of February 3, 2024, Designer Brands Inc. (DBI) shows a debt-to-equity ratio of 1.76.

A D/E ratio of 1.76 suggests that DBI relies more on debt than equity to finance its assets. When evaluating this ratio, it's essential to compare it against industry standards to determine whether DBI's leverage is typical or if it stands out as particularly high or low. Different industries have different norms regarding capital structure, so a relevant comparison provides better context.

Recent financial activities, such as debt issuances, credit rating updates, or refinancing efforts, can significantly impact Designer Brands Inc.'s (DBI) capital structure. These actions reflect the company's strategic decisions to optimize its debt profile and manage interest expenses. For instance, a debt refinancing might aim to extend the maturity dates of existing debt or secure lower interest rates, thereby improving cash flow and financial stability.

Designer Brands Inc. (DBI) strategically balances debt financing with equity funding to achieve its financial goals. Debt financing can provide capital for expansion and investments without diluting ownership. However, it also introduces fixed interest expenses and increases financial risk. Equity funding, on the other hand, strengthens the balance sheet and provides flexibility but can dilute existing shareholders' ownership.

Here's a look at key components of Designer Brands Inc.'s (DBI) capital structure:

Understanding these elements helps investors gauge Designer Brands Inc.'s financial risk and stability. Want to know more about who is investing in Designer Brands Inc. (DBI)? Read this article: Exploring Designer Brands Inc. (DBI) Investor Profile: Who’s Buying and Why?

Designer Brands Inc. (DBI) Liquidity and Solvency

A thorough examination of Designer Brands Inc.'s (DBI) financial health necessitates a detailed look into its liquidity and solvency positions. Liquidity, the capability to meet short-term obligations, and solvency, the ability to meet long-term obligations, are critical indicators for investors.

Assessing Designer Brands Inc.'s Liquidity

Designer Brands Inc.'s liquidity can be assessed through the following metrics:

• Current and Quick Ratios: These ratios provide insights into the company's ability to cover its short-term liabilities with its short-term assets.
• Working Capital Trends: Analyzing the trend of working capital (the difference between current assets and current liabilities) helps understand the operational efficiency and short-term financial health. Designer Brands had a working capital of $144.5 million as of February 1, 2025.
• Cash Flow Statements Overview: Examining cash flow from operating, investing, and financing activities reveals the company's cash generation and usage patterns. Net cash provided by operating activities for 2024 was $82.2 million, while cash used in investing and financing activities was $62.7 million and $22.1 million, respectively.

For a deeper dive into the company's investor profile, consider exploring: Exploring Designer Brands Inc. (DBI) Investor Profile: Who’s Buying and Why?

Key Liquidity Ratios

Here's a look at some key liquidity ratios for Designer Brands Inc.:

The current ratio as of December 2024 (TTM) for Designer Brands Inc. (DBI) is 1.41.

According to TipRanks.com, Designer Brands Ratios for TTM (Trailing Twelve Months):

• Current Ratio: 1.24
• Quick Ratio: 0.23
• Cash Ratio: 0.08

Working Capital Analysis

Designer Brands Inc. had a working capital of $144.5 million as of February 1, 2025.

Cash Flow Statement Overview

Key highlights from the cash flow statement for the fiscal year 2024 include:

• Cash provided by operating activities: $82.2 million
• Cash used in investing activities: $62.7 million
• Cash used in financing activities: $22.1 million

More detailed cash flow information from the year 2024 is available. Total cash flow from operating activities was ($9,761). Total cash flows from investing activities was ($9,221). Total cash flows from financing activities was $16,528.

Potential Liquidity Concerns and Strengths

Designer Brands acknowledges its dependence on positive operating results and potential financing to meet future obligations.

Despite a decrease in net sales to $3.0 billion from $3.1 billion in the previous year, Designer Brands Inc. returned to positive comps in the fourth quarter of fiscal 2024 for the first time in nine quarters, indicating a positive trend in sales performance.

The company's cash and liquidity stood at $44.8 million and $172.1 million, respectively, at the end of 2024. Total debt was $491 million at the end of the year.

The company returned $79 million to shareholders through dividends and share repurchases in 2024.

Designer Brands has set specific financial guidance for 2025, expecting low-single-digit net sales growth and diluted EPS in the range of $0.30 to $0.50.

Designer Brands Inc. (DBI) Valuation Analysis

Determining whether Designer Brands Inc. (DBI) is overvalued or undervalued requires a multifaceted approach, incorporating several key financial ratios and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

As of the fiscal year 2024, further updated details are needed to provide a precise valuation assessment. Commonly, these metrics are compared against industry averages and DBI's historical performance to gauge its relative valuation. For instance, a high P/E ratio compared to its peers might suggest overvaluation, while a low P/B ratio could indicate undervaluation.

Analyzing stock price trends over the last 12 months, or longer, provides insights into market sentiment and investor confidence. A consistent upward trend may reflect positive expectations, whereas a downward trend could signal concerns about the company's performance or prospects.

If applicable, dividend yield and payout ratios are crucial for income-focused investors. A higher dividend yield can make the stock attractive, but it's essential to ensure the payout ratio is sustainable, indicating the company's ability to maintain dividend payments.

Analyst consensus, typically expressed as buy, hold, or sell recommendations, reflects the collective opinion of financial analysts covering the stock. These recommendations are often based on thorough financial analysis and forecasts, providing investors with a summarized view of the stock's potential.

Without specific 2024 figures for these metrics, a definitive conclusion on whether DBI is overvalued or undervalued cannot be reached. Investors should consult recent financial reports and analyst opinions for the most up-to-date assessment.

Here's a general overview of how these valuation metrics are typically used:

• Price-to-Earnings (P/E) Ratio: Indicates how much investors are willing to pay for each dollar of earnings. A higher P/E may suggest overvaluation, while a lower P/E could indicate undervaluation.
• Price-to-Book (P/B) Ratio: Compares a company's market capitalization to its book value of equity. A P/B ratio below 1.0 might suggest the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Assesses the company's total value relative to its earnings before interest, taxes, depreciation, and amortization. Lower ratios are often seen as more attractive.
• Dividend Yield: The annual dividend payment as a percentage of the stock price. Higher yields can be appealing but must be evaluated for sustainability.

To gain a deeper understanding of who is investing in Designer Brands Inc. and their motivations, consider exploring this resource: Exploring Designer Brands Inc. (DBI) Investor Profile: Who’s Buying and Why?

Designer Brands Inc. (DBI) Risk Factors

Designer Brands Inc. (DBI) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and growth potential.

Industry Competition: The footwear and accessories market is highly competitive. Designer Brands Inc. faces stiff competition from other retailers, including large department stores, online retailers, and direct-to-consumer brands. This competition can pressure profit margins and require continuous innovation to maintain market share.

Regulatory Changes: Changes in trade policies, tariffs, and other regulations can significantly affect Designer Brands Inc.'s supply chain and costs. For instance, increased tariffs on imported goods could raise the cost of goods sold, impacting profitability. Compliance with evolving environmental and labor regulations also adds to operational costs.

Market Conditions: Economic downturns, shifts in consumer spending, and fashion trends can all impact Designer Brands Inc.'s sales. A decrease in consumer confidence or a shift away from discretionary spending could lead to lower sales and reduced profitability. Staying ahead of rapidly changing fashion trends is also critical to maintaining consumer interest.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. These include:

• Supply Chain Disruptions: Global supply chain disruptions can lead to delays in receiving merchandise, increased shipping costs, and potential inventory shortages.
• Inventory Management: Effective inventory management is crucial in the fashion industry. Overstocking can lead to markdowns and reduced profit margins, while understocking can result in lost sales.
• Cybersecurity Threats: As an e-commerce retailer, Designer Brands Inc. faces the risk of cyberattacks and data breaches, which can damage its reputation and lead to financial losses.
• Labor Costs and Availability: Rising labor costs and potential labor shortages can impact operational expenses and the ability to staff stores adequately.

To mitigate these risks, Designer Brands Inc. has implemented several strategies:

• Diversification of Supply Chain: Sourcing products from multiple countries and regions to reduce reliance on any single supplier.
• Investment in Technology: Implementing advanced inventory management systems and cybersecurity measures to improve efficiency and protect data.
• Enhancing Customer Experience: Focusing on providing a seamless omnichannel shopping experience to attract and retain customers.
• Financial Prudence: Maintaining a strong balance sheet and managing debt levels to ensure financial stability during economic downturns.

Understanding Designer Brands Inc.'s risk factors and mitigation strategies is essential for investors. By carefully assessing these elements, investors can make more informed decisions about the company's long-term prospects.

More insights about the company's mission and vision can be found here: Mission Statement, Vision, & Core Values of Designer Brands Inc. (DBI).

Designer Brands Inc. (DBI) Growth Opportunities

Designer Brands Inc. (DBI) is focusing on several key strategies to drive future growth. These include product innovation, market expansion, strategic partnerships, and leveraging competitive advantages.

Key Growth Drivers:

• Product Innovation: DBI is consistently working on new product designs and innovations to attract customers and stay ahead of trends.
• Market Expansion: Expanding its presence in current markets and entering new geographic regions are crucial for revenue growth.
• Acquisitions: While not always a primary strategy, strategic acquisitions can help DBI expand its market share and product offerings.

For the fiscal year 2024, Designer Brands Inc. reported the following financial highlights:

• Total Revenue: $3.2 billion
• Gross Profit: $1.1 billion
• Net Income: $75 million

These figures provide a snapshot of DBI's financial performance and highlight areas of potential growth and investment.

Future Revenue Growth Projections and Earnings Estimates:

Analyst estimates project a steady increase in revenue for Designer Brands Inc. (DBI) over the next few years. While specific numbers can vary, the general consensus points towards moderate growth driven by the factors mentioned above.

Strategic Initiatives and Partnerships:

Strategic partnerships and initiatives are vital for DBI’s growth. These collaborations can enhance product development, market reach, and brand recognition. Recent initiatives include:

• Collaborations with footwear brands to create exclusive collections.
• Expanding its digital presence through e-commerce partnerships.
• Investing in supply chain efficiencies to reduce costs and improve delivery times.

Competitive Advantages:

Designer Brands Inc. (DBI) possesses several competitive advantages that position it for sustained growth:

• Strong Brand Portfolio: A diverse portfolio of owned and licensed brands provides a broad customer base.
• Extensive Retail Network: A widespread retail footprint ensures accessibility for customers.
• Loyalty Program: A robust loyalty program enhances customer retention and drives repeat purchases.

Here’s a look at some key financial data points for Designer Brands Inc. (DBI) based on the latest reports:

Understanding these elements provides a comprehensive view of Designer Brands Inc.'s growth prospects and strategic positioning in the market.

To gain more insight into the core values and mission of Designer Brands Inc., check out: Mission Statement, Vision, & Core Values of Designer Brands Inc. (DBI).