Designer Brands reported improved margins in the fourth quarter and exceeded its full-year profit outlook, despite continued pressure on sales.

For the fourth quarter ended January 31, net sales were flat year over year at $713.6 million, while comparable sales declined 1.9 per cent.

Gross profit increased to $302.7 million from $282.6 million a year earlier, lifting gross margin to 42.4 per cent from 39.6 per cent. The company reported a net loss of $20 million for the quarter.

CEO Doug Howe said the results reflected a focus on execution and operational discipline.

“We ended the year with fourth quarter net sales flat year over year and gross margin expansion, driving full-year adjusted operating income above the high end of our guidance,” Howe said.

For the full year, net sales declined 3.9 per cent to $2.9 billion, with comparable sales down 4.3 per cent.

Gross profit edged down to $1.26 billion from $1.29 billion, although gross margin improved to 43.6 per cent from 42.7 per cent. The company reported a net loss of $8.4 million, while adjusted net income reached $8.3 million.

Designer Brands ended the year with 665 stores across its banners, down from 669 locations a year earlier. This included 519 DSW stores, 118 The Shoe Co stores, and 28 Rubino stores.

Looking ahead, Howe said the company will maintain its focus on execution and operational priorities.

“As we enter fiscal 2026, we remain focused on our strategic priorities and executing the initiatives within our control,” he said.

“We believe this will support improvement in both sales and profitability over the long term.”

Designer Brands operates a portfolio of retail and owned brands, including Topo Athletic, Keds, Vince Camuto, Jessica Simpson, and Lucky Brand.

• Further reading: Designer Brands sees losses across the board, refocuses on cost control.