Designer Brands navigates sales decline with improved profitability in 2025

US footwear retailer Designer Brands Inc. has announced its financial results for the fourth quarter and full fiscal year ended January 31, 2026, revealing a period of disciplined execution and significant gross margin expansion.

The Columbus-based company, which operates a direct-to-consumer (D2C) omnichannel infrastructure, saw its fourth quarter net sales remain flat year-over-year at 713.6 million dollars. While total comparable sales (LFL) decreased by 1.9 percent during the quarter, the group achieved a notable increase in gross profit, rising to 302.7 million dollars from 282.6 million dollars in the previous year. This resulted in a gross margin of 42.4 percent, a 280 basis point improvement over the same period last year.

Full year performance and strategic progress

For the full fiscal year 2025, net sales decreased 3.9 percent to 2.9 billion dollars. LFL sales for the year saw a decline of 4.3 percent. Despite the top line pressure, the company reported an adjusted net income of 8.3 million dollars, or 0.16 dollars per diluted share. This follows a reported net loss attributable to the company of 8.4 million dollars.

Designer Brands chief executive officer, Doug Howe, stated: “Our fourth quarter and fiscal 2025 results reflect disciplined execution as we strengthened the business and delivered sequential improvement across key financial metrics throughout the year.” Howe noted that the focus on strategic priorities allowed the group to deliver an adjusted operating income that significantly surpassed the high end of its previous guidance.

Retail footprint and 2026 guidance

The company’s retail portfolio saw a slight consolidation over the year. The total number of stores decreased from 669 to 665. This includes 519 DSW Designer Shoe Warehouse locations, 118 The Shoe Co. stores, and 28 Rubino locations.

Looking ahead to fiscal 2026, Designer Brands expects net sales to range from a 1 percent decrease to a 1 percent increase. The group has set a guidance for diluted earnings per share between 0.28 dollars and 0.38 dollars.