It would be easy to think that clothing retailer Designer Brands (NYSE:DBI) would have had a rough quarter. The macroeconomic picture isn’t encouraging for most retailers these days, especially those depending on discretionary income, which is in short supply these days. But Designer Brands had a bang-up quarter based on its earnings, and investors threw support behind the stock, sending it up over 20% in Thursday afternoon’s trading.
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Designer Brands’ earnings report featured a litany of wins. It trounced projections in both earnings and revenue, though it did post a 7.8% decline in revenue against the second quarter of 2022. Meanwhile, store closures were minimal as it shuttered one store in the United States and one in Canada. Despite that, Designer Brands is still rolling out new product lines, particularly in athletic wear and athleisure apparel. Its partnership with Nike (NYSE:NKE) is still holding strong and the duo are making new progress all the time.
Better yet, Designer Brands is also putting its cash to work paring back its debt load. Back in 2022, it had $387 million in debt. However, now, it’s down to $331 million. It’s also kept less inventory on hand, dropping from $694 million in 2022 to $607 million now. However, some point out that Designer Brands’ cash pile is also on the decline, down around 10%. Further disappointing to some was the lack of coverage around online selling, which is a still-rising portion of most retailers’ overall portfolio.
A look at the past five trading days for DBI stock highlights the level of impact today’s news had on it. Indeed, investors are now up 13.71% during this timeframe.
