DBI - Earnings call transcript Q4 2024

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Operator

Good morning, everyone, and welcome to the Designer Brands Inc. Fourth Quarter 2023 Earnings Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Dustin Hauenstein, SVP of Finance. ahead. go Please

Dustin Hauenstein

periods today, be results Earlier otherwise. under periods issued press today's results certain and a February note excludes XXXX. Good the call during that operations the unless the for GAAP comparing financial XX-week XX-week the of XXXX. we XX-week recorded January the release specified XX, X, Please will morning. that To company ended referencing XX-week adjustments ended of and remainder

to adjusted GAAP please a reference release. of For complete press earnings, our reconciliation

note that any The about and materially release listed please assumes company statements. Results prospects remarks Additionally, factors expectations, made to press SEC. differ plans future [Technical the no obligation about company's made due may forward-looking and various today's future to public the expectations, update filings plans in the Difficulty]. with

us Doug Joining Poff, Officer; Chief and Officer. Executive Jared Chief are Financial Howe, today

Now to Doug. let the over me call turn

Douglas Howe

morning. challenging our hard by joining adopted begin spending I'd amidst inventory priorities, us to you quickly dedication and to executed work for Thank associates They on to designer our the sales to and this manage for backdrop. work effectively like levels trends brands. of macroeconomic their shifting all recognizing continued

where with we are year, at recognize we fully we ended While pleased are full we the potential. that our operating not

of the of fiscal to were we sales, future right deliver renewed place enter we decline though benefits of what However, during able as to size in strategy see we In our right move saw the work to EPS in the transitional cost XXXX, us confidence year-over-year processes our in as simultaneously a at XXXX, and range. end our with we and This we anticipation total to do have believe new will people base we begin guidance year upper forward. leadership be a still provides X.X% growth.

for sales contracted the the industry According footwear to year, dollar market. year-over-year weakness both third quarters and saw the fourth the Circana, in consecutively. During we fiscal industry across

This discretionary. inventory. impacted and with promotions segments compared above Retail warm Within operate the seasonal approximately seasonal first we seen mix the The the contributed highly quarter we for back result, market. The year within to as in retail to have as XX% of to softness levels X.X% time most retail offerings we XXXX us decline since unseasonable half we that continue declined our a are full footwear our U.S. the our XXXX. offerings. weather a sales segment, U.S. a ensure to exited quarterly the instituted with And year necessary our we in as witnessed of healthy Canada

U.S. fourth Retail our sales million, the quarter, and we to X.X% quarter specifically a versus XXXX. providing With seasonal week, rebounded. segments decrease a the $XXX.X boost January of the as and During fourth XXrd the achieved of Canada category of Retail

positive While enough comps we Nike. saw and experienced the did QX. to to fall, sales our seasonal part into experienced assortment. Contrary the compared up throughout the we to athletic. were during of due XX% in offset the challenges seasonal, see in some rebound continue was spots not the demand customers dress to bright reduced we in of quarter categories Both fourth of kids lean and Notably, to XXXX, these return casual athletic the

assortment. reintegrate in are was overall athletic, these and exciting to moving and results our we our evolve we and laser-focused on performance segments. in this given Our offerings our indicative casual acknowledge less swiftly seeing product we're lacking, We strength of are growing underpenetrated remain

given of as our in ongoing expect are nature is said, That degree a the who the second address brought being At encouraged and throughout U.S. are the international this sales our in President. of macro XXXX. by comp Denk, continuing quarter within of there uncertain the half headed we improve items leadership the XXXX point, Andrea a are to introduced we and most Laura President an XXXX, into elections comps seeing all footwear, talented performance most we're quarter-to-date. we anticipate that our weak new we will turnaround. we to high immediately newly appointed DSW, environment, have discretionary O’Donnell, Perhaps lap control We the inflection QX you XXXX conflicts. But importantly, and upcoming impactful to last uncertainty Brands'

on their full effects driven will strategic already it organization both to time speak lead more a some changes. just in Although actions about plans the to moment. due of take the have meaningful see their times, I'll

look made I progress back to want the we to First, in XXXX.

set year, in our in to opportunities. our significant and made the notable driven our we progress brand acquisitions. given portfolio, retail and Over the both offerings recent space expand by casual penetration past white out athleisure, We

our drivers Our newest brands, portfolio, Topo, of of remain brand and our of athleisure will brands coming key the awareness over expect Keds to years. all accelerate growth distribution and we and

has pleased this progress with reached made we nostalgic since have effort, are transition This the On [ largely acquiring intensive an services this milestone. we the but and to Brand been thrilled ] agreement. Americana Keds, Wolverine we've exiting are

brand in throughout growing our With Hush our very remaining new excited portfolio American year. the focused our excited is fully the our about of had prospects contract exclusive XXXX new pipeline brand through the midway currently signed a into portfolio by DBI This portfolio Topo Athletic, North can strong to to its and this few first we a making to are brand assortment a and sequentially accounts awareness We the acquired sales quarter has bring we new wholesale opening innovation components XXXX, distribution robust year on customer only are fiscal December scheduled to integrated once which with total build Puppies. about franchise-driven transition, way and brand growth is the is ecosystem. to it market. increase conversion. Also in

reputation it and exclusively still U.S. unique globally, elements we DSW, the portfolio. in relaunch it brings and here about the are sold excited strong brand is is at this to our While very a undergoing a has

build are laser-focused also on brands we store and progress our segments continuing incremental casual under strong While leadership into we progress with have to seeing upon made relationship and DSW. at athletic bringing brands are national and retail a portfolio, our

ramp into our kids entire channels and able September, Nike a months, neared the and our we within athletic tailwind for largest Being shopping welcomed Nike is offer offerings our as back levels. to across to few In women's assortment. casual sales men's, athletic penetration brand pre-COVID a our we up and customers

at top my priorities a this newest anniversary and urgency and and year the navigating to difficult it So of I've critical would who where CEO, strategy. do landscape. X-year in leaders sense I'm hire will one talent legacy took I our during rigor period comps shrinking of our identify clear When is be as brands, of sales and bring to sit last approaching we negative helm made a at execution my today? DSW

Our and at minds. our new expertise, improve customers' our fundamentals, our salience design grow Andrea the expand to operations put of leadership hires, specifically position Laura top own the retailing and back us of and us brands

strong share. to they seek their headed leadership continue as Mary We'll further market into Canada, also to expand team Turner in lean our by

strategy own just And heard although her has experience well new Laura XXXX. DSW. strategic her these I'd leaning You time organization, from at the priorities Mary's quarter are and from last deep moment off in she In like to leaders spearheading speak started the pillars, for Everlane. already with a to strategies recently some to a and Canada, crafting is of great Deckers new is underway, year take start. Andrea about to the is on early her thoughtfully

Let's at about plans first DSW. our talk

and our center in-season advancing extensive promotions strategic trends leadership essential can and As we previously partnership management. customer business. tactical is the merchandising, we brand drive buys. process, in approach. putting buzzworthy execute have addition on elevate career value DSW I and a that deliver our changes revitalizing which has assortments assortment She the receipt discussed, tools in merchandising by open our the proposition, to our at on we core and of merchant as Her stacked have sales insights healthy Laura's to the and first leaving is with a will conviction the closeout and critical transaction balance simplifying incremental balancing exciting optimize

be The and assortment effect brand of DSW. changes for a revitalized awareness improved cumulative these will

as down the Nike, Laura of Birkenstock build and leading to XXXX, return that to and discuss such with actively are is Balance. to objective brands Beyond customers work to secure strategy partners clear the Skechers, growth New is Her with brands, and sat DSW develop that merchandising DSW's conversation. reengaging brand our other for targets key side-by-side relationships of national be part is with brands stronger recently it Have want top styles demanding.

and summer spring come. for newness We all are positioned to well with the

results Our in are a assortment, kids. and strong we encouraging casual, and athletic teams built have seeing

customers, to To that styles to We updated will will premium in assortment, seek our vendors closeout as marketing. our including newness brands. to continue to we accessing continue opportunistic new are from invest with customers ways targeted as of ensure our opportunities pursuing well aware long-standing drive

launched second in TV to our loyalty Investments in on our ongoing already funnel unparalleled brand on results shown growth by and Our relevance, of top awareness. positive advertising expected of in focus marketing continue as campaign are as linear streaming the well that bolstered half brand has XXXX, supporting expanding program.

our in-store to DSW's pricing shopping LED and experiences. promotions focused painting, in-store as selectively is aspects flooring well hardwood includes on and Laura inviting more and lighting, updating and stores experience make enjoyable. Finally, the of shopping This simplifying even enhancing as digital such as brick-and-mortar strategically decor

marketing investments, Canada under retail As making we Mary updates to part also of are Turner. recent our the of operations leadership our

completed at begin The a both full will digitally for in new of storefronts. Company Shoe implementation and the of end and in In we rebranding XXXX, exercise month, Canada the this rebranding

be existing DSW, will also in significant anticipate Canada capabilities further XXXX. our driver are sales which in We a growth leveraging digital we at of

the we in new eager stores are market Shoe Company with see Finally, net as continue X add expansion Canada to of penetrate we to attractive plans stores XXXX. an in to

brand our to segment. portfolio Moving

been appointment and She next we over Deckers as experience its she evolve relatively that catalyst at and to footwear Our first for design Her the has our CEO is Everlane, Andrea level. that that brand still flat specific unique brands and experience each to have brings UGG she the and to Brands experience is is recent will expansion where the indispensable brings because journey brand, proven immediately building the additive Her for years. of our a in also customer. brand capabilities led current brands end time. believe apparel innings, know-how understands the the the marketing is organization. our early the us Koolaburra of scaled business take and to Andrea's

that plans Andrea's informed, With are aligned to growth leadership, build distribution plans brand with fueling robust partners, we strategy. our plan robust key and long-term to

of as across leverage current Andrea's brand is segment. within areas optimize and initial focus streamline to and grow our and brands. well the includes retail portfolio of segment efficiencies One our support to infrastructure across our as shared infrastructure finding This

its Our current acquisitions, multiple architecture. brand portfolio grown each own has through bringing

have processes working of of amalgamation ways, As Andrea's a often disparate setting plans. inefficiencies are in we growth. brands a critical proper growth foundation the an result, at systems, be different hampering supporting for our times roles we each internally and will in and rationalizing way creating

our many We're and simply synergies organization distinct additional unlocking match. And most harness where to going where financial Before to to to store peers portfolio, and brands true is the provides with what extensive competitive lies for close, infrastructures networks, leverage our is focused. growing advantages network continue nationally cannot are I I state across about operational The we strategic again assets process financial true how with our savings I identify only I additional advantage. we and portfolio sense, of retail acquisitions our recent continue unique cost of a own combination us. opportunity And store our as logistics will efficiencies. am want makes fully excited not the pairing to together driving designer continue that brands fleet of our synergies. to brands and become and it by and integrated, believe leverage, ahead distributed but

specifically, the as continue year expect have I the to discussed. Looking implement of to we throughout initiatives balance ahead net to XXXX improve sales their we strategic

continue position that, I'll well we deliver we guidance. that There the a effectively truly both but managing the and our will under for over believe factors variety as which opportunities XXXX, control on that to growth direction are are of in unknowns to enter us we about the are tremendous our headed With it I Jared? am remain and attainable. excited turn Jared. to

Jared Poff

the addition along to Thank driving you, good and team organization. in regarding Mary proven Designer with that I Doug, strategies of are to Brands. Doug's in already across the experience and tremendous combined expertise excitement our everyone. Their the assets are would U.S., that Turner the she and of to Laura morning, like Canada Andrea echo and

the financial sequential January was improvement from quarter performance the improvements, year quarter, in quarter at loss fourth We to contributed full our the Turning our guidance. with XXXX results adjusted a impacting share the performance. fourth of of accelerating of our saw improvement a per end delivered specifically. earnings upper these Despite fourth of $X.XX, that earnings in per to solid third our share comps month $X.XX. We adjusted full year negatively to

year quarter provide our on me a financial Let and fourth full results. bit more detail

year our down Notably, X.X% $XXX.X by highly fourth quarter, footwear XXrd X.X% the generated our offerings. million business. In a were pressures, U.S. the the sales Retail quarter third casual, of $XX.X and year sales in performance down improvement basis. compared billion in slightly X.X% our X.X% business, retail our comparable the continued were were weather warm and the promotional driven on stronger primarily a period were weaker XXXX comps of an week $X.XXX macro athletic XX-week prior on X% the comps impact For sales. offset down The prior down XXXX. fourth to net to million attribute environment this in period were athleisure basis. seasonal and comparable our seasonal of segment, down XX-week and in on sales in negative of versus net year by a versus quarter of XXXX, down Full shortfall X.X% We

quarter. As footwear backdrop contraction against a all consecutive the Doug market mentioned, in this was of year-over-year the overall for second

were year, U.S. comps X.X%. the down For full retail

a segment Our was driven last Notably, for Retail of X.X% quarter performance challenges. year. strong on by comps top macro fourth Canada were this the down fourth quarter,

the strong were post-COVID X.X% comps Canada's result following For as recovery. the Canada a phasing full XX% which a down comps of year, nearly saw very XXXX, up of

in our Portfolio segment, fourth in quarter. sales Brand the Finally, up were XX.X%

X.X%. quarter, were The of For and gain vincecamuto.com Both strong up Keds, continued launch an by Full Athletic driven Topo year Le comps already momentum full year up XXXX, primarily Tigre. were sales year. with performance to X.X% of the lapping acquisition of the the in gross offerings as points quarter performance for white develop the customers. vincecamuto.com the new the versus with up year, prior margin solid, in comps cap by fourth with also basis decreased primarily prior was traction year X% our versus boot Consolidated promotions. XXX of XX.X% driven

decrease gross Full a XX.X% last compared margin year XXXX was points. consolidated to XX.X% XX basis of year,

XX.X% we've As points In the quarter, the pre-COVID. period. over compared a reminder, XX.X% to SG&A since of our adjusted year was our fourth gross margin in sales prior expanded XXX basis

in full the XX.X% adjusted XX.X% XXXX, For year was our compared SG&A to XXXX.

largely a the XXXX. a previously completed declining As as was deleveraging coupled this result with expenses highlighted, line, in several fixed a we acquisitions in result of top underlying of increases

the of efficiencies synergies to and infrastructure and administrative examining our within support. are areas identify As we all Doug organization savings, noted, cost

loss quarter, which was For to prior million a compared operating $XX.X $X.X and gain the year. million, adjusted includes in million additional the $XX.X fourth

million the In was compared of net operating For full we had adjusted year. million profit XXXX, last last compared with the million fourth year. XXXX, expense year quarter $X.X $XXX.X $X.X to million interest of $XX.X

higher [Technical direct during XXXX, interest higher installed of as year as full the at interest term year million result loan the we our ABL average is higher our $XX.X our compared was borrowings with interest well Difficulty] expense rates. on For a the

XX% on for our rate the results fourth XX.X% Our year. was to compared effective last adjusted quarter tax

XX.X%. was the below year's last XX.X%, tax was which our effective For year, rate

earnings a $X.XX interest culminated in share along per diluted higher was Our loss XXXX. fourth expense EPS performance compared $XX.X adjusted share. the diluted quarter in Weaker fourth with in million lower or quarter per negative net to $X.XX of

net adjusted $X.XX or million $X.XX year per share full to XXXX. share $XX.X our was compared $XXX.X per in million Finally, or income earnings diluted

down product. X.X% X% inventory and down adjusted a fourth the continue fourth newest placement of with quarter clean and the take We ended as inventory the inventory. Brand prioritized year inventory We portfolio of our position last emphasize have provides and to for prior quarter to acquisition ended to inventories Turning on we us versus Keds, the inventory new about balance XX% fiscal into been to the sheet down Topo feel buys. good year. action and our continue opportunistic year, chase flexibility would heading to strong levels our and

will to As [Technical the Black I clear and highlighted we period and and on call, desire each earnings we DSW. our the sell-throughs product Difficulty] they higher shop our Cyber anticipate customers brands at third to inventory during positions ultimately seasonal through of include time to we faster turns, right Monday deployed significant strategically size promotions know drive newness our more we customers quarter inventory Friday giving

million of that repurchases. through In report to Designer fiscal dividends Brands I'm to share returned pleased XXXX, $XXX.X combination shareholders a and

A year, paid we million and dividends. an the of During $XX.X $X.X in repurchased common aggregate million at cost million an $XXX.X aggregate shares Class

X, which February date. share no $XX.X available program, expiration a under set remained million XXXX, has of repurchase As our reminder, as

our flows We despite once Brands first for able to Difficulty] proud strong shore per I'm reaffirmed generate also was [Technical and have headwinds. during the up quarter $X.XX share of that sheet again XXXX balance sales our dividend XXXX. cash the Designer

of availability total of We was includes revolver with amidst macro $XXX.X fourth and business flow, which defined cash for strong reflecting paid For generated full as property by the operating million less free $XXX.X the our million rate cash, headwinds. million. a we equipment, year, cash our ended and cash of our conversion XXXX of quarter under liquidity, cash activities $XX.X cash resiliency and the provided and

refund our covenants the await relationships end million borrowed the have Total to inside the we our simply is awaiting On from all of million As refund of remaining with us strong $XX This and January Act by we available cleared CARES debt $XXX.X remain tax loan. U.S. Treasury. XXXX, all all funding million the and reminder, due $XX of of the a credit term audits our as IRS. remaining receipt XX, well new providers. has the the under quarter. continue of outstanding We fourth was of to

within we a portfolio own move our [Technical to segment approach Difficulty] selling our of consistent changes our brands to segments. implementing discussing are towards to other on Before brand's

recorded a same brands the based segment at intersegment certain a streamlined customers. At it being with as As are own sales rate, factories. attributable of sales transition the sales our from fiscal gross first owned to transactions segments brands certain products a by sales brand's time, product as external segment made commission an to profit retail as ordered Starting income the and and transact and margin. approach standardized is designed we wholesale to are commission direct plan in income wholesale stands but the today, to our our gross other commission quarter with portfolio identical recorded by on corresponding the XXXX, wholesale

consolidation result, a selling upon increase there have profit Brand change basis is our higher. lower Portfolio be will well total for will to to margin reported the As end eliminations. a segment, will through gross gross retail segment cost U.S. basis, DBI its customer On intercompany as while no sales as inventory through due as the

execution the at not our it with change level. brand business this our and While financial the greater consistency will in consolidated process and clarity provide ultimate does planning results, teams

$XX segment's of of full consolidation from that is This XXXX, and will gross as reported amount sales of profit increase in operations. to add separately eliminated also are segment's $XX the results. million reported gross and portfolio anticipating will million profit For sales we the approximately captured the brand year this

few conclude, thoughts to our want on I Before guidance. XXXX a I share

considering the single versus sales net low XXrd the expect XXXX. of when even growth digits last recorded We sales the year the week of in headwind in

wholesale new coming to accelerating well life driven week up We strategy, improved in bit Puppies, our being growth continuance weakest. be brand assumed Hush growth segment noncomparable low Topo The DTC to in We loss expected improving last increasingly portfolio stores quarterly assortment digits, key in is strongest as the with our sales of also projected growth to growth, I expect by of selling DSW key comp as anticipate sometimes sales throughout be of of our comparable our digits, while as to sequentially sales year-over-year in the falling and to comparable of be impact as week awareness calendarization as quarters is marketing. And and, will driven our at single sales weeks by a year volatility the an course, quarter QX. This mid-single in selling the result expected year to just of growth approach year, entire our double-digit improve increase XXrd in our growth QX discussed. sequentially selling results has change the optimized a an progresses. the excluding especially and and QX

factors to Turning profitability. our impacting

directionally, we income. want our to not While P&L I top to sales line from help build providing are guidance, detailed net line a bridge

First, promotional rate national last gross anticipating penetration fewer lower with our associated as increasing our merchandise margin of flat assortment. year profit are of DSW to to the mitigate some within key we up to helped athletic slightly relatively markdowns brands be to

expense as in as marketing, key the personnel and also organization identifying reinvesting across while leverage areas to slight We see aggressively in such unlocking and we are our efficiencies SG&A expect ratio technology. pursuing

compared XXXX at our roughly anticipate $X.XX, share a XXXX earnings $X.XX of rate to to representing be range We effective expect results. to the for XX% and per midpoint tax in the when XX% of an fiscal increase roughly

the last For of sequential not of improvement in the the with as as growth healthy deployment expense starting the materialize negative changes to well initiatives we EPS result the over as growth in the half first be second year top previously, until assortment some half. reasons to including QX, year anticipate a of year-over-year our retail mentioned of line our

our new direction in be we the for are the leadership right and the could expenditures changes not of have million assured to $XX to the move the in more helm. range at be in million we year. the to we In expect making are capital appropriate organization We confident $XX conclusion,

flow. ahead growth top lines, for And while we transition continuing free the Operator? important our an plan be will reducing open call excess will cash questions. the to we retail spending have With bottom to reinvesting while return and continue We accelerate year laser-focused to brand teams strong generate as and that, on our strategies. to on to

Operator

Ladies at we'll and comes question-and-answer our [Operator gentlemen, this time, session. the today Mauricio from question from first begin And Serna UBS. Instructions]

Mauricio Serna Vega

pleased to I seeing performance comp sales how [Technical does you First, wanted that the you in were to mentioned that we're the quarter-to-date, with you Difficulty] you give a insight could us comp bit on so of sales far, but maybe little QX? compare a had

How And we a guidance on then more interest details little XXXX? expenses maybe the you expenses. could the for about bit interest Thank for think provide should you.

Douglas Howe

seeing then pleased, start, Jared. largely kids. in area as we're in QX. as the of strength well date. over again, results what coming is we out I'll I'll that saw Yes, we and And turn this Doug. it improvement that as the It's we by casual significant Mauricio, said, seeing it's, are with driven to season to and athletic we're to a

So the quarter is of still with out. very how but days, to play obviously, lot starting a early in the market, pleased volatility, we're

Jared Poff

And is this Mauricio, Jared.

anticipating but in full just a relatively the earned term more dollars little the given bit we million same flow of cash we the of interest, maybe are entire yearly of offsetting with -- loan interest interest year, couple the balance the have paying over expense, a down the amount On that will ABL, totality. than last year then the

Mauricio Serna Vega

it expense you sorry, helpful. mentioning Got maybe I'm gross it. could if flat, seems then could operating margin, be the but gross just margin Very that And were like thinking profit slight -- some maybe leverage. about be

I put together, So expecting on those modest a think things year-over-year expansion like you're a I if like basis.

has Just talk if business right. And more make remind wanted could how just lastly, understand little or a you going. been us about sure the bit I to that Nike

would additional You remind much said like And to level detail like helpful. near how pre-COVID be. that used Maybe could any us be penetration. very it's it's you

Jared Poff

Nike. I first the rate your then Yes. it income modest Doug And is, I'll and will with answering yes, for question, that on start to turn expansion a op over line.

Douglas Howe

the Yes. nearing On remarks, went pandemic. Nike, -- brands to top our be great national Mauricio, as [Technical you in the quickly we're in brand Difficulty] the partners. partners. need one to It's we It's pretty of -- quarter said nearly

again, to products get been pleased we with good about as that seeing active. Continuing access great overall that. Again, never that before. the well had they've partners, feel So we've really as to very progress we're there

drivers out And positive well. of a seeing Nike really of -- as other that nice business. some kids the that's kind the We're actually impacting by Kids of positively strong businesses effect the on business well, driver halo trip are coming of driven women's Nike as

the I pleased with partnership again, So today. be couldn't more

Operator

Our next comes from question Carden from Dylan William Blair.

Dylan Carden

Thanks a lot.

kind to trying Just of simplify this bit. little a

quarter the guide a kind be as full on sales guide more the component lapping doing of know sales or not kind that you're it, but just finds of you of that here heavy pieces maybe of is to acquisitions, expectations appropriately just is sales for makes the portfolio to you of DSW provided footing? Or the sense. this trying on I portfolio sort until that expectation don't on versus the given banner the branded other year, beat kind of set of year, any kind going idea lifting if comp, to the For the make start going

Jared Poff

more actual to dollar the Yes. volume growth guided got we size you've sheer indicate segment. Yes, segment, just coming comp Certainly, brand just that the sales of and growth DSW Dylan. from the would vis-a-vis given

at do However, full we last acquired brand Topo the that mid-single guide year. a year Keds both and and have did work grow beginning digits of that we segment will actually we the

retail into lower on So in the we the mixer, mid-single-digit are with to our side low comp put -- brand seeing side, businesses. all single-digit growth of that growth

Dylan Carden

side, I the more missed to Sorry, closer that's guess? mid-single-digit that. or of timing brand acquisitions less not given I But growth, than organic

Jared Poff

you question? What was sorry, there. up I'm broke the

Dylan Carden

than for timing given not to it the is sounds growth mid-single-digit apologize just like. branded missing closer but commentary, side, the of the on I growth, that organic acquisitions

Jared Poff

organic Yes. Yes, that's Correct. growth.

Dylan Carden

And I shifters banner, reset of anything within when of -- the the branded portfolio, of idea your guess, kind -- the brands. seeing guess start some the these of you merchandising potentially, adding architecture other shifted to maybe level set the DSW these brands to is purchase and kind should I own some of to there pulling out ancillary or

year overall the next kind Just how how helps DSW own of does banner. assortment mix the far and as level as that look sort the brand at of

Douglas Howe

just focus the demand has Laura we're Yes. areas Dylan, athletic. where leaning is as notably, assortment. already the specifically really underpenetrated, is team, Most our consumer the Doug. continuing into meaningful this we're made progress to and growing seeing obviously, with revitalize that's

acquisition in our maintaining talked essentially We're The where evolve, obviously. we're nice as the seeing portfolio has the that Topo. that flat, a of is kids some commitment obviously, growth in evolved the that's own really area nice well. back the well. Nike there, of as Keds, on lot and of brands. will of And return the with was a Hush penetration So really growth seeing Puppies We about

made really changes already with again, the continue good green in the to that feeling So we'll team shoots the has about evolve, the format. but seeing we're

Dylan Carden

kind [Technical final kind or Difficulty] between one athletic presumably me. of leaner can mitigate that And volatile, any be for either being inventory ways continue incremental then Whether penetration? you to of on

Douglas Howe

we we're can is I mean, focus to going This control. on to continue Doug. what

inventory. done of has job good team the a really So managing

certainly advantage strengths, opportunistic of That's not chase well. key our honestly. to and are buys we're to products working [indiscernible]. have as to buy take of one categories We that open And

XXXX. And stayed as happening, we to obviously, so what's we progress really close through just

Operator

Telsey question comes Telsey next from Our from Group. Dana

Dana Telsey

U.S. are As in state the or what how in-store. that of it the and think seeing in just differences whether whether whether it's you far, exiting or is the into the health consumer, same Canada, it has are so or the XXXX online you changed about the and 'XX

in fold. about it's hire thinking about Andrea And speaking very And base the how in lastly, closings. store openings stores, or welcoming you are whether XXXX, nice your to

assortment and about is from profile As share? a market than year you what in attracting it customers different think margin the and category gaining now assortment today looks what and

Douglas Howe

Doug. is Great. Thanks, This Dana.

question that newness, first QX health, focus, would by we Turner the is Overarching, it trend customer in to consumer dedicated Laura seen, we've as to say your compares obviously driven to definitely said, the we a then in U.S. the relates Mary has Canada. and I on as are it that and in by encouraged QX. obviously change responding the been As

about team the then impact is So nice that, on leaning categories Nike, it's had business underpenetrated has well than definitely broader buoyancy focused We talked but of as on a seeing that really athletic. where in demand, casual been coming businesses we're The as and the maniacally specifically positive into strong that. nice kids well. we're

in it's overall, QX. obviously, volatility. trajectory really say, on, -- we from I'd around So coming Still early saw we're still of out a change seeing what

think and been The about As that. between we we're big stores stronger digital. we digital channel believers a growth, about than think business But stores. agnostically comp perspective has really in from stores. again,

a of really marketing, We funnel an increase invest there. the which seeing in results continuing increase had top to are definitely positive traffic holdout traffic in We're to modestly there.

feeling this digital demand of returns of stores. is that. XX% think XX% good much ecosystem. And stores, our We're leveraging we different a in So our fulfilled are by e-coms stores way. made it's in we're very our about

in the of lot of So channels. there's footsteps X those confluence a

in really new we talked the think about holistically. We about So X those net Canada. stores

plans any So DSW. in don't have any about make material excited differences we're to we that, and

do to flooring, LED, more and lighting, stores is really Again, it back that and a enjoyable. mentioned the the very those paint, with way Laura inviting work experience about update in that goes hardwood we on, making even thoughtful focusing think I how

So been with acquisition, maniacally Topo, see But last your Puppies brands it's been early on obviously, and but then upside really Andrea. pleased in prioritizing Hush the the the we Le already growth. There's question, the last months, major she's progress through is as brand Keds changes the to as count. on no days team. lot XX Tigre. some focus with in that, And investments focused the relates She to in of significant profitability the with as change I've portfolio well store that it making a with that meaningful XX

question. bit there's your very We'll as had of in little specifics back that has, role. again, for a time she's the come know the with portfolio more So a early very, you more lot Thanks in new net days. she

Operator

the And questions, like gentlemen, over turn back floor no to additional ladies any Doug session. and I'd the with question-and-answer showing to we'll closing for conclude remarks.

Douglas Howe

us Thank joining to you update continuing to progress forward as progress this for again all we look We Thanks you morning. on our through XXXX. again.

Operator

conclude We call you thank gentlemen, we'll and joining. with and that, presentation. conference for Ladies today's

disconnect your now lines. may You

Designer Brands (DBI) 21 Mar 242024 Q4 Earnings call transcript