Designer Brands Inc shares fell over 14% on Thursday after the fashion retailer laid out disappointing guidance for the year ahead.
Updating on Thursday, Designer Brands said per-share earnings would likely come in between US$0.70 and US$0.80 for 2024, below analysts’ expectations of US$0.81.
This was as the firm unveiled a 0.8% drop in fourth-quarter sales to US$754.3 million, with adjusted earnings per share coming in at a US$0.44 loss in the meantime.
Both figures were better than analysts had expected though, which chief executive Doug Howe attributed to “strength in our brand portfolio segment as a result of acquiring Keds, Topo, and launching Le Tigre”.
He continued: “Despite the results, 2023 was a difficult year as we were impacted by a softening footwear market, highly promotional retail environment, and the impact of unseasonably warm weather on our seasonal footwear business.”
A 6% drop in gross profit was recorded for the final quarter, while margins slimmed from 29.2% to 27.5%.
Howe added the firm was set to implement a transition plan over the coming year, including through a new focus on fashion trends and making shopping channels more convenient.
“We expect these initiatives will underpin improved financial performance throughout the year, and combined with disciplined cost savings, will lead to continued strong cash flow generation,” he said.
Shares fell 14.5% to US$9.85.