DSW Parent Designer Brands’ Stock Sinks 24% After ‘Soft’ Q1

Shares of Designer Brands Inc. sank 24 percent in pre-market trading on Tuesday after the company reported a soft start to the year.

According to the DSW parent company, net sales in the first quarter of fiscal 2025 decreased 8.0 percent to $686.9 million, down from $746.6 million the same time last year. This came in below analysts’ expectations, which called for net sales in the quarter to be between $726.5 million to $736 million, according to Yahoo Finance.

By segment, the company’s U.S. Retail division reported net sales declined 7.7 percent in Q1 to $573.2 million, compared to $621.4 million the same time last year. DBI’s Canada Retail division saw net sales decrease 2.9 percent to $53.9 million, compared to $55.5 million, while its Brand Portfolio reported a 7.9 percent decline in net sales to $95.9 million, compared to $104.1 million in Q1 2024.

The company also reported a net loss attributable to Designer Brands Inc. of $17.4 million, or diluted loss per share of 36 cents, in Q1 2025, compared to net income of $783,000, or diluted earnings per share of 1 cent, the same time last year.

Doug Howe, chief executive officer of Designer Brands Inc., said in a statement that the company “experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment.”

“We have shifted our near-term focus to amplifying value in our retail channels, preserving margins, controlling costs, and mitigating the impact of tariffs as part of our response to this volatility,” Howe said. “Thanks to our team’s focus and discipline, we expect to deliver between $20 million to $30 million in cost savings over the course of 2025.”

Looking ahead, the company noted that due to macroeconomic uncertainty stemming primarily from global trade policies, it is withdrawing its full year 2025 guidance that was provided in March, and is not providing a full year outlook at this time.

The company’s previous guidance called for net sales growth in the low single digits for fiscal 2025, with diluted earnings per share between 30 cents and 50 cents.

“Given the persistent instability and pressure on consumer discretionary spend, we’ve made the decision to withdraw our 2025 guidance for the time being,” Howe added. “Moving forward, our efforts remain focused on disciplined execution of the initiatives within our control to build a business rooted in the strength of our brand, centered on the customer, and positioned for long-term value creation.”