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Designer Brands Inc. ended the fiscal year with a mixed fourth quarter as it continued to navigate the challenges posed by the COVID-19 pandemic.
For the three months ended Feb. 1, the Columbus, Ohio-based company reported an adjusted net loss of $38.6 million, or loss of 53 cents per share. Market watchers had predicted a wider loss of 68 cents per share.
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Revenues, however, declined 26.6% to $609.4 million, which fell short of analysts’ estimates of $623.77 million. Comparable sales also decreased by 20.1%, compared with last year’s 0.7% gain.
Still, CEO Roger Rawlins suggested that the fourth quarter “continues our story of sequential improvement in unprecedented market conditions.” In a statement, he added, “I am proud of our team’s exceptional execution of our near-term strategy as we continued to pivot our assortment to athleisure and kids, focused on the top 50 brands in footwear and leaned even further into our digital-first capabilities.”
For the full year, Designer Brands logged an adjusted net loss of $281.7 million, or loss of $3.90 per share, and revenues that dropped 36% to $2.2 billion. Comps fell by 34.2%, versus the previous year’s 0.8% rise.
The company ended the fiscal year with cash and investments totaling $59.6 million, plus debt of $334.8 million, with $294.7 million available for borrowings under its senior secured asset-based revolving credit facility.
According to Rawlins, Designer Brands will work on improving its digital and omnichannel capabilities and services, as well as leverage its design and sourcing strategies, in the year ahead. In last quarter’s financial report, he explained that the company’s near-term focus was on the athletic and kids’ markets, but it was still dedicated to dress and special-occasion products in the long run.
“When demand shifts back to dress and seasonal, our Camuto team will be well-prepared to capitalize on our historical success in these categories while protecting our newly captured market share in the athletic segment,” he added in today’s statement. “We have a significant amount of inventory open to buy and the capability to flex our business as customer preferences evolve, making us a dominant player with room to grow as the market recovers.”