Designer Brands (NYSE:DBI) shares are set to open almost 24% higher on Tuesday after the footwear retailer reported third quarter results that topped profit expectations, despite revenue falling short of estimates.
The company, which primarily sells footwear and accessories through its Designer Shoe Warehouse Stores, reported adjusted earnings per share (EPS) came in at $0.38, $0.20 higher than the consensus estimate of $0.18.
Gross profit rose to $339.6 million from $333.8 million, and gross margin expanded 210 basis points to 45.1%.
Revenue, however, was $752.4 million, a 3.2% decline from $777.2 million a year earlier and about $11 million below Wall Street estimates. Comparable sales fell 2.4% for the period.
"Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics," Designer Brands CEO Doug Howe said in a statement.
"Stronger consumer demand and improved in-store execution drove improved comparable sales in the third quarter compared to the second quarter.
The company also reaffirmed its fiscal 2025 outlook, guiding to adjusted operating income of $50 million to $55 million, net sales down 3% to 5%, and adjusted income tax expense between $8 million and $10 million.