Designer Brands Reports Over 40% Increase in Q3 Net Income
- Profitability Improvement: Designer Brands reported diluted earnings per share of $0.35 and adjusted EPS of $0.38 for Q3, both exceeding 40% growth year-over-year, indicating significant enhancement in profitability and boosting investor confidence.
- Gross Margin Enhancement: The company achieved a gross margin improvement of 210 basis points year-over-year, reaching 45.1% in Q3, reflecting successful cost control and sales strategies that enhance overall profitability.
- Positive Future Outlook: For fiscal 2025, adjusted operating income is expected to range between $50 million and $55 million, demonstrating the company's optimistic view on growth potential despite macroeconomic pressures, which underscores the effectiveness of its strategic direction.
- Shareholder Return Plan: The company announced a dividend of $0.05 per share to be paid on December 19, 2025, reflecting its commitment to enhancing shareholder returns and indicating a stable cash flow position.
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Momentum Investing Overview: Momentum investing involves buying stocks that are trending upwards, with the expectation that they will continue to rise. The Zacks Momentum Style Score helps identify stocks with strong momentum characteristics.
Designer Brands Performance: Designer Brands (DBI) has a Momentum Style Score of A and a Zacks Rank of #1 (Strong Buy), with significant price increases of 69.88% over the past week and 117.31% over the past quarter, outperforming the S&P 500.
Earnings Estimates and Volume: DBI has seen positive earnings estimate revisions, with an increase in consensus estimates from -$0.27 to -$0.02. The stock's average 20-day trading volume is 1,698,108 shares, indicating strong market interest.
Investment Recommendations: Zacks Investment Research highlights DBI as a promising stock for near-term gains, suggesting it should be on investors' short lists for potential high returns, alongside other handpicked stocks expected to rise significantly.
Quarterly Performance: Designer Brands Inc. reported third-quarter adjusted earnings per share of 38 cents, significantly surpassing the analyst consensus estimate of 18 cents, despite a 3.2% year-over-year decline in quarterly sales to $752.411 million.
Financial Metrics: The company's gross profit increased to $339.6 million, with an improved gross margin of 45.1%. Consolidated operating profit rose 87% year over year to $42.663 million.
Store Operations and Debt: As of November 1, 2025, Designer Brands operates 672 stores across North America, while long-term debt decreased to $463.089 million from $529.551 million a year ago.
Market Outlook: The company anticipates a fiscal year 2025 adjusted operating profit of $50 million-$55 million, with projected net sales down 3%-5%, and has a high level of short interest at 57.07% of its public float.
- Profitability Improvement: Designer Brands reported diluted earnings per share of $0.35 and adjusted EPS of $0.38 for Q3, both exceeding 40% growth year-over-year, indicating significant enhancement in profitability and boosting investor confidence.
- Gross Margin Enhancement: The company achieved a gross margin improvement of 210 basis points year-over-year, reaching 45.1% in Q3, reflecting successful cost control and sales strategies that enhance overall profitability.
- Positive Future Outlook: For fiscal 2025, adjusted operating income is expected to range between $50 million and $55 million, demonstrating the company's optimistic view on growth potential despite macroeconomic pressures, which underscores the effectiveness of its strategic direction.
- Shareholder Return Plan: The company announced a dividend of $0.05 per share to be paid on December 19, 2025, reflecting its commitment to enhancing shareholder returns and indicating a stable cash flow position.
Financial Guidance: Designer Brands, Inc. has reinstated its net sales growth guidance for fiscal 2025, projecting a decline of 3 to 5 percent in net sales.
Analyst Expectations: Analysts expect the company's net sales to decline by an average of 3.64 percent, estimating total sales around $2.90 billion for the year.
Dividend Announcement: The company will pay a dividend of $0.05 per share for both Class A and Class B common shares on December 19, 2025, to shareholders recorded by December 5, 2025.
Source of Information: The information is sourced from RTTNews and reflects the author's views, which may not align with those of Nasdaq, Inc.
Earnings Growth: Designer Brands Inc. reported third-quarter earnings of $18.22 million, or $0.35 per share, an increase from $13.01 million, or $0.24 per share, in the same period last year.
Adjusted Earnings: Excluding certain items, the company posted adjusted earnings of $19.62 million, or $0.38 per share.
Revenue Decline: The company's revenue decreased by 3.2% to $752.41 million, down from $777.19 million in the previous year.
Earnings Summary: Key figures include earnings of $18.22 million, EPS of $0.35, and revenue of $752.41 million compared to last year's figures.

Management Insights: CEO Douglas Howe reported sequential improvements in traffic, in-store conversion, and expense management, with a 2.4% decline in comparable sales, marking a 260 basis point improvement from Q2. The company's top brands outperformed, contributing to stronger gross profit and merchandise margins.
Financial Performance: Designer Brands Inc. reported Q3 net sales of $752.4 million, a 3.2% year-over-year decline, with adjusted operating income of $46.5 million. The company ended the quarter with $51.4 million in cash and reduced total debt by $47 million.
Outlook and Guidance: The company anticipates a total net sales decline of 3% to 5% for the year, with adjusted operating income projected between $50 million and $55 million. Management expressed optimism about maintaining momentum into Q4 despite macroeconomic uncertainties.
Analyst Sentiment: Analysts displayed a neutral to slightly positive tone, focusing on trends and margin expectations, while management's confidence increased compared to Q2, reflecting ongoing improvements and a clearer outlook for Q4 performance.









