Shares for Designer Brands Inc. are plummeting in Thursday premarket trading following the release of an earnings and sales report that largely missed Wall Street’s expectations.
For the three months ended Aug. 1, the footwear and accessories retailer posted an adjusted loss of $92 million, or an adjusted loss of $1.28 per diluted share, compared with market watchers’ estimates of a loss of 85 cents per share. Revenues sank 42.8% to $489.7 million, while analysts forecasted sales of $596.46 million.
As of 8:30 a.m. ET, DBI’s stock was down more than 18% to $6.70.
In a statement, CEO Roger Rawlins suggested that the Columbus, Ohio-based chain would pivot away from dress, formal and special occasion footwear toward more comfort-driven styles in an effort to cater to shifting consumer preferences as the coronavirus pandemic continues to keep people indoors.
Given that we have further strengthened our balance sheet, we are well prepared to focus on growing our business’ profitability. In order to serve our customers in the near-term, we are flexing fall inventory receipts away from seasonal and dress products and towards our highest-performing category, athleisure, with an emphasis on comfortable and cozy products,” Rawlins explained. “We have the unique ability to pivot inventory quickly and follow the customer as needs and preferences change in the future.