Designer Brands Inc., the parent company of popular retail chains DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse, has bounced back from the challenges posed by the Covid-19 pandemic and reported a return to profitability in the first quarter of 2021. This is a significant milestone for the company, as it marks their first profit since the pandemic began.

During the same period last year, Designer Brands suffered a substantial net loss. However, in the first quarter of 2021, the company reported a net income of $17.0 million, or $0.22 per diluted share, showcasing a remarkable improvement over the net loss of $215.9 million, or $3.00 per diluted share, posted in the previous year’s first quarter. Additionally, net sales for the company reached $703.2 million in Q1 2021, representing a 45.6% increase compared to $482.8 million in the same period last year. Comparable sales also experienced a striking surge of 52.2%, a stark contrast to the 42.3% decrease witnessed in Q1 2020.

The positive financial results are broken down by segment. Designer Brands achieved sales growth of 31.1% to $193.1 million in the U.S. retail segment, 26.7% to $10.8 million in the Canadian retail segment, and 20.8% to $11.9 million in its brand portfolio. Several factors have contributed to this success. CEO Roger Rawlins attributes the company’s triumph to the recovery of pandemic-affected areas of the business, their vertical capabilities that enable them to respond swiftly to positive trends, and a strategic focus on athleisure, kids, and seasonal products.

In response to changing consumer behavior resulting from the Covid-19 pandemic, Designer Brands has proactively made adjustments since the second half of last year. This includes shifting their product assortment towards athleisure, a category that has remained robust throughout the health crisis, as well as enhancing their digital capabilities.

Throughout the first quarter, Designer Brands opened two new stores while closing five in the U.S., bringing the total number of locations to 516 in the country. In Canada, the company operates 145 stores, with two new stores opened and one closed during Q1.

Overall, these encouraging financial results demonstrate a strong start for Designer Brands in the fiscal year 2021. Their ability to adapt to shifting market conditions and capitalize on emerging trends has been instrumental in their return to profitability. With a continued focus on strategic initiatives and expansion, Designer Brands is poised for sustained success in the retail industry.

Useful links:
DSW Designer Shoe Warehouse
Designer Brands Inc.