Designer Brands has started fiscal 2026 with a cautious but constructive first quarter, delivering modest sales growth and a sharper improvement in profitability. 

For the quarter ended May 2, net sales rose 1.4 per cent year-on-year to $696.4 million, reflecting stable demand across its footwear ecosystem. 

Gross profit climbed to $315.3 million, with gross margin up to 45.3 per cent. Management credited improved inventory management, tighter pricing discipline, and ongoing optimisation across sourcing and channel mix.

“Our strong start to the year was underscored by double-digit sales growth in our Brand Portfolio segment and encouraging stabilization in our Retail segment,” said CEO Doug Howe.  

“In addition to top-line strength, we delivered meaningful profitability gains, with gross margin expanding 240 basis points, reflecting the structural improvements we have made across inventory management, pricing discipline, sourcing, and channel profitability.”

The brand portfolio division continued its momentum, with sales jumping 19.4 per cent to $114.5 million, supported by stronger demand across its owned and licensed brands. 

In contrast, the retail segment remained soft but showed signs of stabilisation, with comparable sales down 1.2 per cent, compared with a 7.5 per cent decline a year earlier.

As of May 2, the company operated 663 stores, down from 669 a year earlier. The DSW banner remained the core of the portfolio with 518 stores, down from 520 last year. 

The Shoe Co network continued its gradual contraction, falling to 118 stores from 121. Meanwhile, the Rubino chain also saw a slight reduction, with store count declining to 27 locations, down from 28 a year earlier. 

Looking ahead, Designer Brands reaffirmed its full-year guidance, maintaining expectations for net sales between down 1 per cent and up 1 per cent. 

“Following our encouraging start to the year, we believe in our ability to achieve the high end of our fiscal 2026 EPS guidance range, even amidst ongoing uncertainty in the macroeconomic environment,” Howe added. 

“We believe our strategic actions will continue to strengthen our foundation of the business and position us well for long-term profitable growth.”

• Further reading: Designer Brands beats profit outlook despite weaker full-year sales.