Marketdash
Back to News

Designer Brands Crushes Earnings Expectations, Analysts Raise Their Price Targets

MarketDash Editorial Team
8 hours ago
Designer Brands reported third-quarter adjusted earnings that more than doubled analyst expectations, prompting Wall Street firms to significantly boost their price targets on the footwear retailer's stock.

Designer Brands Inc. (DBI) just reminded Wall Street why you can't judge a retailer by its sales alone. The footwear company reported third-quarter results on Tuesday that featured an earnings beat so substantial it sent shares soaring and analysts scrambling to update their models.

The headline number: adjusted earnings per share of 38 cents, more than doubling the analyst consensus estimate of 18 cents. That's not a small beat—that's the kind of surprise that makes people wonder what they missed. Revenue came in at $752.4 million, down 3.2% year over year and slightly below the Street's expectation of $763.4 million. Total comparable sales decreased by 2.4%.

So sales are down, but profits are way up. What's happening here? It's the turnaround story in action. CEO Doug Howe explained it this way: "Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics."

Translation: the company is getting better at making money from the sales it does have, which is arguably more important than raw revenue growth in a challenging retail environment.

Looking ahead, Designer Brands expects fiscal year 2025 adjusted operating profit between $50 million and $55 million. The company projects net sales to decline 3% to 5%, so management isn't sugarcoating the top-line challenges. But apparently the margin story is convincing enough.

Designer Brands shares jumped 8.6% to $7.82 on Wednesday following the earnings release.

Wall Street analysts moved quickly to adjust their outlooks. Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating but raised her price target from $5 to $7. Meanwhile, UBS analyst Jay Sole kept his Neutral rating while boosting his target from $4.50 to $7.

Both firms increased their price targets by roughly 40% to 56%, which tells you something about how meaningful this earnings beat was. When you more than double earnings expectations, people start rethinking their assumptions about what this business can do.

Back to News

Designer Brands Crushes Earnings Expectations, Analysts Raise Their Price Targets

MarketDash Editorial Team
8 hours ago
Designer Brands reported third-quarter adjusted earnings that more than doubled analyst expectations, prompting Wall Street firms to significantly boost their price targets on the footwear retailer's stock.

Designer Brands Inc. (DBI) just reminded Wall Street why you can't judge a retailer by its sales alone. The footwear company reported third-quarter results on Tuesday that featured an earnings beat so substantial it sent shares soaring and analysts scrambling to update their models.

The headline number: adjusted earnings per share of 38 cents, more than doubling the analyst consensus estimate of 18 cents. That's not a small beat—that's the kind of surprise that makes people wonder what they missed. Revenue came in at $752.4 million, down 3.2% year over year and slightly below the Street's expectation of $763.4 million. Total comparable sales decreased by 2.4%.

So sales are down, but profits are way up. What's happening here? It's the turnaround story in action. CEO Doug Howe explained it this way: "Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics."

Translation: the company is getting better at making money from the sales it does have, which is arguably more important than raw revenue growth in a challenging retail environment.

Looking ahead, Designer Brands expects fiscal year 2025 adjusted operating profit between $50 million and $55 million. The company projects net sales to decline 3% to 5%, so management isn't sugarcoating the top-line challenges. But apparently the margin story is convincing enough.

Designer Brands shares jumped 8.6% to $7.82 on Wednesday following the earnings release.

Wall Street analysts moved quickly to adjust their outlooks. Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating but raised her price target from $5 to $7. Meanwhile, UBS analyst Jay Sole kept his Neutral rating while boosting his target from $4.50 to $7.

Both firms increased their price targets by roughly 40% to 56%, which tells you something about how meaningful this earnings beat was. When you more than double earnings expectations, people start rethinking their assumptions about what this business can do.