Designer Brands Inc. (DBI)

CIK: 0001319947. SIC: 5661 Retail-Shoe Stores. Latest 10-K as of: 2026-03-30.

SIC breadcrumb: Retail Trade > SIC Major Group 56 > SIC 5661 Retail-Shoe Stores

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1319947. Latest filing source: 0001319947-26-000022.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001319947.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-09. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001319947.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001319947-26-000041.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-06-09. Report date: 2026-05-02.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW AND TRENDS IN OUR BUSINESS

As described in Note 1 to the condensed consolidated financial statements of this Form 10-Q, we have made immaterial corrections to comparative prior period amounts. Refer to Note 12 of the condensed consolidated financial statements of this Form 10-Q for quantification of the prior period restatement impacts.

For the first quarter of 2026, net sales increased 1.4% with a decrease in total comparable sales of 1.1% when compared to the same period last year. Gross profit as a percentage of net sales for the first quarter of 2026 was 45.3%, an increase of 240 basis points when compared to the same period last year.

EFFECTS OF MACROECONOMIC CONDITIONS AND TARIFFS

Macroeconomic conditions influenced by uncertain tariff policies, inflation, elevated fuel prices, stock market indices, interest rates and employment levels, along with geopolitical unrest, continue to persist and create a challenging retail environment. Consumer spending on discretionary items, including our products, generally declines during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence. We believe these ongoing uncertainties have had a negative impact on our operating results and liquidity during 2026 and we may continue to experience the impact of decreased consumer demand for our products and lower direct-to-consumer traffic. We have enacted certain mitigating actions, including alignment of inventory with current demand levels and expense reductions. Although we have made progress in mitigating the impacts of certain macroeconomic conditions, our actions are not necessarily complete, and they should be viewed as part of the process in which we will continue our efforts to better align our cost structure with our operating results. We are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, including from one of our quarterly reporting periods to the next, or the full impact such circumstances could have on our business. These factors ultimately could require us to enact further mitigating operating efficiency measures that could have a material adverse effect on our business, results of operations, and liquidity.

Following its January 2025 inauguration, the U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. Various modifications to the U.S. tariffs have been announced, and further changes are expected to be made in the future, including in response to litigation, which has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the IEEPA. During April 2026, the CBP launched the CAPE process, which allows entities to submit refund claims for paid IEEPA tariffs. We have submitted claims seeking refunds of previously paid IEEPA tariffs through CAPE. The timing of any refunds and the total amount ultimately received or recorded remains uncertain, and we cannot provide any assurance that we will receive the full amount expected. Further, following the U.S. Supreme Court decision, the U.S. administration imposed a new tariff surcharge of not less than 10% under Section 122 of the Trade Act of 1974 on all imports, subject to certain exceptions. The tariffs under this statute took effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute). Tariffs have not been previously imposed under this statutory provision, and, in May 2026, the U.S. Court of International Trade invalidated these temporary tariffs, but they remain in place, subject to appeal. The U.S. administration has indicated future actions may be taken that could restore or exceed the level of the IEEPA tariffs under other statutory provisions. Any future tariffs or other trade policy actions could affect our cost structure and supply chain. All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia. In addition to the merchandise sourced through our Brand Portfolio segment, our Retail segment also sources merchandise from third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia. We are closely monitoring this situation and evaluating the actions we have taken and additional actions we may take in the future, including cost mitigation measures and price adjustments. For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source our products from in an effort to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere. The ultimate impact of tariffs and other trade policies on our business will depend on several factors, including future measures implemented by the U.S. government and the governments of other countries, the overall magnitude and duration of these measures, and our ability to mitigate effects, which could include higher import costs and our ability to obtain any refund. Accordingly, our financial position or results of operations may be adversely influenced by political, economic, legal, compliance, social, and business conditions in the U.S. and in other countries.

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Future impacts from macroeconomic conditions and tariffs are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity. Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

FINANCIAL SUMMARY AND OTHER KEY METRICS

For the three months ended May 2, 2026:

•Net sales increased to $696.4 million from $686.9 million for the same period last year.

•Gross profit as a percentage of net sales was 45.3% compared to 42.9% for the same period last year.

•Net income attributable to Designer Brands Inc. was $1.2 million, or $0.02 per diluted share, compared to a net loss attributable to Designer Brands Inc. of $17.8 million, or $0.37 loss per diluted share, for the same period last year.

Comparable Sales Performance Metric- The following table presents the percent change in comparable sales for each segment and in total:

Three months ended

May 2, 2026

May 3, 2025

Change in comparable sales:

Retail segment

(1.2)

%

(7.5)

%

Brand Portfolio segment - direct-to-consumer channel

3.0 

%

(27.0)

%

Total

(1.1)

%

(7.8)

%

We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the Retail segment. Comparable sales in Canada exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.

Number of Stores- As of May 2, 2026 and May 3, 2025, we had the following number of stores:

May 2, 2026

May 3, 2025

DSW

518 

520 

The Shoe Co.

118 

121 

Rubino

27 

28 

Total number of stores

663 

669 

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RESULTS OF OPERATIONS

FIRST QUARTER OF 2026 COMPARED WITH FIRST QUARTER OF 2025

(amounts in thousands, except per share amounts)

Three months ended

May 2, 2026

May 3, 2025

Change

Amount

% of Net Sales

Amount

% of Net Sales

Amount

%

Net sales

$

696,350 

100.0 

%

$

686,909 

100.0 

%

$

9,441 

1.4 

%

Cost of sales

(381,032)

(54.7)

(392,428)

(57.1)

11,396 

(2.9)

%

Gross profit

315,318 

45.3 

294,481 

42.9 

20,837 

7.1 

%

Operating expenses

(299,209)

(43.0)

(301,862)

(43.9)

2,653 

(0.9)

%

Income from equity investments

2,761 

0.4 

2,427 

0.4 

334 

13.8 

%

Impairment charges

— 

— 

(2,953)

(0.6)

2,953 

NM

Operating profit (loss)

18,870 

2.7 

(7,907)

(1.2)

26,777 

NM

Interest expense, net

(10,125)

(1.4)

(11,971)

(1.7)

1,846 

(15.4)

%

Non-operating income (expenses), net

(5)

— 

8 

— 

(13)

NM

Income (loss) before income taxes and loss from equity investment

8,740 

1.3 

(19,870)

(2.9)

28,610 

NM

Income tax benefit (provision)

(4,805)

(0.8)

2,189 

0.3 

(6,994)

NM

Loss from equity investment

(481)

— 

— 

— 

(481)

NM

Net income (loss)

3,454 

0.5 

(17,681)

(2.6)

21,135 

NM

Net income attributable to redeemable noncontrolling interest

(2,295)

(0.3)

(135)

— 

(2,160)

1,600.0 

%

Net income (loss) attributable to Designer Brands Inc.

$

1,159 

0.2 

%

$

(17,816)

(2.6)

%

$

18,975 

NM

Earnings (loss) per share attributable to Designer Brands Inc.:

Basic earnings (loss) per share

$

0.02 

$

(0.37)

$

0.39 

NM

Diluted earnings (loss) per share

$

0.02 

$

(0.37)

$

0.39 

NM

Weighted average shares used in per share calculations:

Basic shares

50,241 

48,243 

1,998 

4.1 

%

Diluted shares

55,920 

48,243 

7,677 

15.9 

%

NM - Not meaningful

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NET SALES

The following table summarizes net sales by segment:

Three months ended

(dollars in thousands)

May 2, 2026

May 3, 2025

Change

Amount

% of Segment Net Sales

Amount

% of Segment Net Sales

Amount

%

Comparable Sales

Segment net sales:

Retail

$

626,684 

84.5 

%

$

627,145 

86.7 

%

$

(461)

(0.1)

%

(1.2)

%

Brand Portfolio

114,518 

15.5 

95,898 

13.3 

18,620 

19.4 

%

3.0 

%

Total segment net sales

741,202 

100.0 

%

723,043 

100.0 

%

18,159 

2.5 

%

(1.1)

%

Elimination of intersegment net sales

(44,852)

(36,134)

(8,718)

24.1 

%

Consolidated net sales

$

696,350 

$

686,909 

$

9,441 

1.4 

%

For the three months ended May 2, 2026, net sales were relatively flat in the Retail segment over the same period last year primarily driven by a decline in comparable sales of approximately $7.0 million, which was partially offset by an increase in non-product sales activity, including service revenue and shipping revenue, and the favorable impact from foreign currency translation. The decrease in comparable sales for the Retail segment was largely driven by lower comparable transactions of approximately 7% primarily due to reduced conversion and slightly lower traffic, partially offset by an increase in comparable average sales amounts per transaction. The increase in net sales for the Brand Portfolio segment was primarily due to higher revenue from wholesale activity due to increased demand from retail customers and the Retail segment, as we are expe

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-30. Report date: 2026-01-31.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management's discussion and analysis of financial condition and results of operations contains forward-looking statements that involve various risks and uncertainties. See Cautionary Statement Regarding Forward-Looking Information for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 on page ii for a discussion of the uncertainties, risks, and assumptions associated with these statements. This discussion is best read in conjunction with our consolidated financial statements, including the notes thereto, set forth in Item 8. Financial Statements and Supplementary Data of this Form 10-K. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those listed under Item 1A. Risk Factors of this Form 10-K and included elsewhere in this Form 10-K.

Our two reportable segments are the Retail segment and the Brand Portfolio segment. Beginning with this 2025 Annual Report on Form 10-K, we aggregated our previously reported U.S. Retail operating segment and Canada Retail operating segment into a single reportable segment, the Retail segment, due to the similar nature of their operations and economic characteristics. This aggregation had no impact on our historical consolidated financial position, results of operations or cash flows. All prior period segment information has been recast to conform to the current reporting segment presentation.

The following discussion includes a comparison of our results of operations and liquidity and capital resources for 2025 and 2024. Except where it may be useful in understanding 2025 results, we have omitted discussion of results for 2023, which may

be found in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual

Report on Form 10-K for the year ended February 1, 2025, filed with the SEC on March 24, 2025.

EXECUTIVE OVERVIEW AND TRENDS IN OUR BUSINESS

For 2025, net sales decreased 3.9% with a decrease in total comparable sales of 4.3% over last year. Gross profit as a percentage of net sales for 2025 was 43.6%, an increase of 90 basis points when compared to last year.

EFFECTS OF MACROECONOMIC CONDITIONS AND TARIFFS

Macroeconomic conditions influenced by uncertain tariff policies, stock market indices, interest rates, inflation and employment levels, along with geopolitical unrest, continue to persist and create a challenging retail environment. Consumer spending on discretionary items, including our products, generally declines during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence. We believe these ongoing uncertainties have had a negative impact on our operating results and liquidity during 2025 and we may continue to experience the impact of decreased consumer demand for our products and lower direct-to-consumer traffic. We have enacted certain mitigating actions, including alignment of inventory with current demand levels, expense and capital expenditure reductions, and accelerating sourcing diversification efforts. Although we have made progress in mitigating the impacts of certain macroeconomic conditions, our actions are not necessarily complete, and they should be viewed as part of the process in which we will continue our efforts to better align our cost structure with our operating results. We are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, including from one of our quarterly reporting periods to the next, or the full impact such circumstances could have on our business. These factors ultimately could require us to enact further mitigating operating efficiency measures that could have a material adverse effect on our business, results of operations, and liquidity.

Following its January 2025 inauguration, the U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. Various modifications to the U.S. tariffs have been announced, and further changes are expected to be made in the future, including in response to litigation, which has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (the "IEEPA"). The U.S. Supreme Court did not address refunds or remedies but instead remanded the matter to the U.S. Court of International Trade to address remedies. In response, the U.S. President issued an executive order rescinding the IEEPA tariffs and directing agencies to take measures to cease collection of the tariffs. Further, following the decision, the U.S. President imposed a new tariff surcharge of not less than 10% under Section 122 of the Trade Act of 1974 on all imports, subject to certain exceptions. The tariffs under this statute took effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute). Tariffs have not been previously imposed under this statutory provision, and such tariffs may be increased. On March 4, 2026, the U.S. Court of International Trade ruled that companies that paid tariffs imposed under the IEEPA are due refunds. There remains substantial uncertainty regarding any refund processes and further uncertainty regarding future trade policy actions, and any

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future tariffs or other trade policy actions could affect our cost structure and supply chain. All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia. In addition to the merchandise sourced through our Brand Portfolio segment, our Retail segment also sources merchandise from third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia. We are closely monitoring this situation and evaluating the actions we have taken and additional actions we may take in the future, including cost mitigation measures and price adjustments. For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source our products from in an effort to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere. The ultimate impact of tariffs and other trade policies on our business will depend on several factors, including future measures implemented by the U.S. government and the governments of other countries, the overall magnitude and duration of these measures, and our ability to mitigate effects, which could include higher import costs and our ability to obtain any refund. Accordingly, our financial position or results of operations may be adversely influenced by political, economic, legal, compliance, social, and business conditions in the U.S. and in other countries.

Future impacts from macroeconomic conditions and tariffs are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity. Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

FINANCIAL SUMMARY AND OTHER KEY METRICS

For 2025:

•Net sales decreased to $2.9 billion from $3.0 billion last year.

•Gross profit as a percentage of net sales was 43.6% compared to 42.7% in 2024.

•Net loss attributable to Designer Brands Inc. was $8.4 million, or $0.17 loss per diluted share, compared to net loss attributable to Designer Brands Inc. of $10.5 million, or $0.20 loss per diluted share, last year.

Comparable Sales Performance Metric- The following table presents the percent change in comparable sales for each segment and in total:

2025

2024

Change in comparable sales:

Retail segment

(3.9)

%

(1.5)

%

Brand Portfolio segment - direct-to-consumer channel

(21.9)

%

(9.5)

%

Total

(4.3)

%

(1.7)

%

We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the Retail segment. Comparable sales in Canada exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.

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Number of Stores- The following table presents the number of stores by banner in our Retail segment:

January 31, 2026

February 1, 2025

DSW

519 

520 

The Shoe Co.

118 

121 

Rubino

28 

28 

Total number of stores

665 

669 

RESULTS OF OPERATIONS

2025 COMPARED WITH 2024

The following table presents our consolidated results of operations with associated percentages of net sales:

(amounts in thousands, except per share amounts)

2025

2024

Change

Amount

% of Net Sales

Amount

% of Net Sales

Amount

%

Net sales

$

2,892,671 

100.0 

%

$

3,009,262 

100.0 

%

$

(116,591)

(3.9)

%

Cost of sales

(1,632,281)

(56.4)

(1,723,304)

(57.3)

91,023 

(5.3)

%

Gross profit

1,260,390 

43.6 

1,285,958 

42.7 

(25,568)

(2.0)

%

Operating expenses

(1,219,233)

(42.1)

(1,245,834)

(41.4)

26,601 

(2.1)

%

Income from equity investments

11,026 

0.4 

13,145 

0.5 

(2,119)

(16.1)

%

Impairment charges

(4,419)

(0.2)

(18,336)

(0.6)

13,917 

(75.9)

%

Operating profit

47,764 

1.7 

34,933 

1.2 

12,831 

36.7 

%

Interest expense, net

(45,338)

(1.6)

(45,291)

(1.6)

(47)

0.1 

%

Non-operating expenses, net

(192)

— 

(372)

— 

180 

(48.4)

%

Income (loss) before income taxes and loss from equity investment

2,234 

0.1 

(10,730)

(0.4)

12,964 

NM

Income tax benefit (provision)

(6,958)

(0.3)

755 

— 

(7,713)

NM

Loss from equity investment

(847)

— 

— 

— 

(847)

NM

Net loss

(5,571)

(0.2)

(9,975)

(0.4)

4,404 

(44.2)

%

Net income attributable to redeemable noncontrolling interest

(2,803)

(0.1)

(574)

— 

(2,229)

388.3 

%

Net loss attributable to Designer Brands Inc.

$

(8,374)

(0.3)

%

$

(10,549)

(0.4)

%

$

2,175 

(20.6)

%

Basic and diluted loss per share attributable to Designer Brands Inc.

$

(0.17)

$

(0.20)

$

0.03 

(15.0)

%

Basic and diluted weighted average shares used in per share calculations

49,136 

53,657 

(4,521)

(8.4)

%

NM - Not meaningful

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NET SALES

The following table summarizes net sales by segment:

(dollars in thousands)

2025

2024

Change

Amount

% of Segment Net Sales

Amount

% of Segment Net Sales

Amount

%

Comparable Sales %

Segment net sales:

Retail

$

2,656,809 

88.0 

%

$

2,749,124 

87.3 

%

$

(92,315)

(3.4)

%

(3.9)%

Brand Portfolio

362,861 

12.0 

398,881 

12.7 

(36,020)

(9.0)

%

(21.9)%

Total segment net sales

3,019,670 

100.0 

%

3,148,005 

100.0 

%

(128,335)

(4.1)

%

(4.3)%

Elimination of intersegment net sales

(126,999)

(138,743)

11,744 

(8.5)

%

Consolidated net sales

$

2,892,671 

$

3,009,262 

$

(116,591)

(3.9)

%

During 2025, net sales decreased in the Retail segment primarily driven by a decline in comparable sales of approximately $106.0 million, which was partially offset by an increase in non-product sales activity including service revenue, retail media income, and shipping revenue. The decrease in comparable sales for the Retail segment was largely driven by lower comparable transactions of approximately 8% due to reduced traffic, partially offset by an increase in comparable average sales amounts per transaction. The decrease in net sales for the Brand Portfolio segment was primarily due to lower revenue from wholesale activity of $39.9 million (excluding Topo wholesale) as retail customers and the Retail segment pulled back on orders, partially offset by a $17.3 million increase in net sales from strong Topo wholesale activity, with the remaining decrease from direct-to-consumer sales, primarily from the Vince Camuto e-commerce site.

GROSS PROFIT

The following table summarizes gross profit by segment:

(dollars in thousands)

2025

2024

Change

Amount

% of Segment Net Sales

Amount

% of Segment Net Sales

Amount

%

Basis Points

Segment gross profit:

Retail

$

1,152,705 

43.4 

%

$

1,186,228 

43.1 

%

$

(33,523)

(2.8)

%

30 

Brand Portfolio

102,791 

28.3 

%

109,814 

27.5 

%

(7,023)

(6.4)

%

80 

Total segment gross profit

1,255,496 

41.6 

%

1,296,042 

41.2 

%

(40,546)

(3.1)

%

40 

Net recognition (elimination) of intersegment gross profit

4,894 

(10,084)

14,978 

Consolidated gross profit

$

1,260,390 

43.6 

%

$

1,285,958 

42.7 

%

$

(25,568)

(2.0)

%

90 

The decrease in gross profit for the Retail segment was primarily driven by the decrease in net sales at a slightly higher margin rate. The improved margin rate was primarily due to greater efficiency in our digital order fulfillment operations. The decrease in gross profit for the Brand Portfolio segment was primarily due to lower sales as retail customers pulled back on orders. Gross profit as a percentage of net sales increased for the Brand Portfolio segment primarily due to favorable customer mix and improved inventory management with less seasonal aged product, partially offset by the deleverage of fixed royalty expenses on lower net sales.

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The net recognition (elimination) of intersegment gross profit consisted of the following:

(in thousands)

2025

2024

Intersegment recognition and elimination activity:

Elimination of net sales recognized by Brand Portfolio segment

$

(126,999)

$

(138,743)

Cost of sales:

Elimination of cost of sales recognized by Brand Portfolio segment

92,850 

95,138 

Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period

39,043 

33,521 

$

4,894 

$

(10,084)

OPERATING EXPENSES

The following table summarizes operating expenses by segment:

(dollars in thousands)

2025

2024

Change

Amount

% of Segment Net Sales

Amount

% of Segment Net Sales

Amount

%

Basis Points

Segment operating expenses:

Retail

$

941,153 

35.4 

%

$

936,786 

34.1 

%

$

4,367 

0.5 

%

130 

Brand Portfolio

102,909 

28.4 

%

119,734 

30.0 

%

(16,825)

(14.1)

%

(160)

Total segment operating expenses

1,044,062 

34.6 

%

1,056,520 

33.6 

%

(12,458)

(1.2)

%

100 

Corporate

175,171 

189,314 

(14,143)

(7.5)

%

Consolidated operating expenses

$

1,219,233 

42.1 

%

$

1,245,834 

41.4 

%

$

(26,601)

(2.1)

%

70 

During 2025, operating expenses increased in the Retail segment primarily due to an increase in distribution and fulfillment costs of $7.7 million with the addition of our new distribution center, partially offset by lower store selling expenses in line with lower net sales. Operating expenses as a percentage of net sales increased in the Retail segment due to the deleverage impact of lower net sales. Operating expenses decreased in the Brand Portfolio segment primarily due to an $8.6 million decrease in marketing expenses with the remaining decrease primarily due to lower personnel overhead and other costs, in line with lower net sales. Operating expenses as a percentage of net sales decreased in the Brand Portfolio segment as the decline in operating expenses leveraged even with lower net sales. Operating expenses decreased for corporate shared services primarily due to lower professional fees.

IMPAIRMENT CHARGES

Impairment charges are not attributed to any of our segments for segment presentation purposes. During 2025, we recorded impairment charges to long-lived assets of $2.4 million due to underperforming stores and $2.0 million of an interest in an equity security without a readily determinable fair value held at cost, which resulted in no remaining value due to the lack of liquidity and the deterioration in the business prospects of the investee. During 2024, we recorded impairment charges of $9.4 million due to a vacated leased corporate office and other corporate assets, $7.0 million of our equity investment in Le Tigre due to the inability of Le Tigre to generate earnings with expected future losses, and $1.9 million due to underperforming stores.

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OPERATING PROFIT

The following table summarizes operating profit by segment:

(dollars in thousands)

2025

2024

Change

Amount

% of Segment Net Sales

Amount

% of Segment Net Sales

Amount

%

Basis Points

Segment operating profit:

Retail

$

211,552 

8.0 

%

$

249,442 

9.1 

%

$

(37,890)

(15.2)

%

(110)

Brand Portfolio

10,908 

3.0 

%

3,225 

0.8 

%

7,683 

238.2 

%

220 

Total segment operating profit

222,460 

7.4 

%

252,667 

8.0 

%

(30,207)

(12.0)

%

(60)

Corporate/eliminations

(174,696)

(217,734)

43,038 

(19.8)

%

Consolidated operating profit

$

47,764 

1.7 

%

$

34,933 

1.2 

%

$

12,831 

36.7 

%

50 

During 2025, operating profit for the Retail segment decreased primarily due to lower gross profit. Operating profit for the Brand Portfolio segment increased due to lower operating expenses, partially offset by lower gross profit. Corporate/eliminations were favorable to consolidated operating profit due to lower corporate operating expenses, lower impairments, and favorable intersegment activity. These factors led to an increase in consolidated operating profit.

INCOME TAXES

The effective tax rate, which is calculated based on income (loss) before income tax and loss from equity investment, for 2025 and 2024 was 311.5% and 7.0%, respectively. The effective tax rate for 2025 differed from the statutory rate primarily due to the impact of non-deductible compensation and higher state income taxes resulting from state valuation allowances and tax return adjustments as well as the income tax amounts on a relatively low pretax income base. The effective tax rate for 2024 differed from the statutory rate, primarily due to non-deductible compensation and other adjustments partially offset by discrete tax benefits recognized, primarily related to the release of tax reserves no longer deemed necessary and state tax planning initiatives.

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

Our primary ongoing operating cash flow requirements are for inventory purchases, payments on lease obligations and licensing royalty commitments, other working capital needs, capital expenditures, and debt service. Our working capital and inventory levels fluctuate seasonally.

The following table summarizes our material undiscounted cash requirements for 2026 and future fiscal years thereafter, and provides reference for each item to the relevant note of the consolidated financial statements of this Form 10-K:

(in thousands)

Note Reference

2026

Future Fiscal Years Thereafter

Total

Fixed minimum lease payments

Note 9

$

219,242 

$

757,263 

$

976,505 

Debt maturities

Note 12

$

6,750 

$

431,938 

$

438,688 

Noncancelable purchase obligations

Note 13

$

9,678 

$

4,399 

$

14,077 

Guaranteed minimum royalty payments

Note 13

$

33,834 

$

67,668 

$

101,502 

We are committed to a cash management strategy that maintains liquidity to adequately support the operation of the business, pursue our growth strategy, and withstand unanticipated business volatility, including the impacts of the global economic conditions on our results of operations. We believe that cash generated from our operations together with our current levels of cash and the availability under our ABL Revolver are sufficient to maintain our ongoing operations, support seasonal working capital requirements, fund acquisitions and capital expenditures, repurchase common shares under our share repurchase program, and meet our debt service obligations over the next 12 months and beyond.

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The following table presents the key categories of our consolidated statements of cash flows:

(in thousands)

2025

2024

Change

Net cash provided by operating activities

$

109,860 

$

82,236 

$

27,624 

Net cash used in investing activities

(33,521)

(62,673)

29,152 

Net cash used in financing activities

(72,532)

(22,094)

(50,438)

Effect of exchange rate changes on cash balances

2,312 

(1,890)

4,202 

Net increase (decrease) in cash and cash equivalents

$

6,119 

$

(4,421)

$

10,540 

OPERATING CASH FLOWS

The increase in net cash provided by operations was primarily due to improved working capital management as we adjusted inventories in line with sales volume and the timing of payments, partially offset by the receipt of income tax refunds of over $40.0 million in 2024.

INVESTING CASH FLOWS

The decrease in cash used in investing activities during 2025 as compared to 2024 was primarily due to the reduction in capital expenditures of $19.3 million as we pulled back in response to the lower net sales experienced especially early in the year, along with impact of the 2024 acquisition of Rubino for $16.1 million.

FINANCING CASH FLOWS

For 2025, we had net cash used in financing activities primarily due to net payments on debt of $57.8 million on our ABL Revolver and Term Loan and dividend payments of $9.7 million. For 2024, we had net cash used in financing activities primarily due to the repurchase of 10.3 million Class A common shares at an aggregate cost of $68.6 million, dividend payments of $10.5 million, and payments on our Term Loan of $6.8 million, partially offset by the net receipts of $69.0 million from our ABL Revolver.

DEBT

ABL Revolver- The ABL Revolver provides a revolving line of credit of up to $600.0 million, including a Canadian sub-limit of up to $60.0 million, a $75.0 million sub-limit for the issuance of letters of credit, a $60.0 million sub-limit for swing-loan advances for U.S. borrowings, and a $6.0 million sub-limit for swing-loan advances for Canadian borrowings. In addition, the ABL Revolver includes a first-in last-out term loan ("FILO Term Loan") with approximately $30.0 million borrowed. The FILO Term Loan may be repaid in full, but not in part, so long as certain payment conditions are satisfied. Once repaid, no portion of the FILO Term Loan may be reborrowed. The ABL Revolver may be used to provide funds for working capital, capital expenditures, share repurchases, other expenditures, and permitted acquisitions as defined by the credit facility agreement. The amount of credit available is limited to a borrowing base formulated on, among other things, a percentage of the book value of eligible inventory and credit card receivables, as reduced by certain reserves. The ABL Revolver matures on the earlier of the maturity date of the Term Loan (currently June 2028) or February 2031. As of January 31, 2026, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $394.2 million, with $289.1 million in outstanding borrowings and $4.0 million in letters of credit issued, resulting in $101.1 million available for borrowings.

Term Loan- On June 23, 2023, we entered into the Term Loan and have since borrowed the maximum aggregate amount of $135.0 million. The Term Loan matures at the earliest of the date the ABL Revolver matures or June 2028.

Debt Covenants- The ABL Revolver requires us to maintain a fixed charge coverage ratio covenant of not less than 1:1 when availability is less than the greater of $47.3 million or 10.0% of the maximum borrowing amount. At any time that liquidity is less than $100.0 million, the Term Loan requires a maximum consolidated net leverage ratio as of the last day of each fiscal month of 2.50 to 1.00, calculated on a trailing twelve-month basis. Testing of the consolidated net leverage ratio ends after liquidity has been greater than or equal to $100.0 million for a period of 45 consecutive days. The ABL Revolver and the Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes. There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability. As of January 31, 2026, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

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Refer to Note 12, Debt, of the consolidated financial statements of this Form 10-K for further information about our debt arrangements.

PLANS FOR CAPITALIZED COSTS

During 2026, we expect to spend approximately $45.0 million to $55.0 million that will be capitalized for property and equipment and implementation costs for cloud computing arrangements accounted for as service contracts. Our future investments will depend primarily on the number of stores we open and remodel, infrastructure and IT projects that we undertake, and the timing of these expenditures.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The information related to recently issued accounting pronouncements as set forth in Note 1, Description of Business and Significant Accounting Policies - Recently Issued Accounting Pronouncements, of the consolidated financial statements included in this Form 10-K is incorporated herein by reference.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

As discussed in Note 1, Description of Business and Significant Accounting Policies, of the consolidated financial statements included in this Form 10-K, the preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of commitments and contingencies at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. We base these estimates and judgments on factors we believe to be relevant, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and, in some cases, actuarial and valuation techniques. We constantly reevaluate these significant factors and make adjustments where facts and circumstances dictate. While we believe that the factors considered provide a meaningful basis for the accounting policies applied in the preparation of the consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. As the determination of these estimates requires the exercise of judgment, actual results may differ from those estimates, and such differences may be material to our consolidated financial statements.

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Table of contents

We believe the following represent the most significant accounting policies, critical estimates and assumptions, among others, used in the preparation of our consolidated financial statements:

Policy

Judgments and Estimates

Effect if Actual Results

Differ from Assumptions

Inventories- The Retail segment inventory held in the U.S. is accounted for using the retail inventory method, which is stated at the lower of cost or market. Under the retail inventory method, the valuation of inventories at cost and the resulting gross profits are determined by applying a calculated cost-to-retail ratio to the retail value of inventories. The cost basis of inventories reflected on the balance sheet is decreased by charges to cost of sales at the time that the retail value of the inventory is lowered by markdowns. All other inventory is accounted for using the moving average cost method and is stated at the lower of cost or net realizable value. For all inventories, we also monitor excess and obsolete inventories that may need to be liquidated at amounts below cost. We perform physical inventory counts or cycle counts on all inventory on hand throughout the year and adjust the recorded balance to reflect the results. We record estimated shrink between physical inventory counts, based on historical experience and recent results, less amounts realized.

Inherent in the calculation of inventories are certain significant judgments and estimates, including setting the original merchandise retail value, markdowns, shrink, and liquidation values. The shrink reserve is calculated as a percentage of net sales from the last physical inventory date, based on both historical experience and recent physical inventory results, less amounts realized. Aged inventory may be written down using estimated liquidation values and cost of disposal based on historical experience.

If the reduction to inventories for markdowns, shrink, and aged inventories were to increase by 10%, cost of sales would increase by approximately $4.0 million.

Asset Impairment of Long-Lived Assets- We periodically evaluate the carrying amount of our long-lived assets, primarily property and equipment and operating lease assets, when events and circumstances warrant such a review to ascertain if any assets have been impaired. The carrying amount of a long-lived asset or asset group is considered impaired when the carrying value of the asset or asset group exceeds the expected future cash flows from the asset or asset group. The impairment loss recognized is the excess of the carrying value of the asset or asset group over its fair value.

Our reviews are conducted at the lowest identifiable level, which typically is at the store level for the majority of our long-lived assets. Fair value at the store level is typically based on projected discounted cash flows over the remaining lease term. We also review construction-in-progress projects, including internal-use software under development, for recoverability when we have a strategic shift in our plans.

A 10% change in our projected cash flows for our store fleet would not result in a material amount of additional impairment charges. To the extent that these future projections or our strategies change, the conclusion regarding impairment may differ from our current estimates.

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Table of contents

Policy

Judgments and Estimates

Effect if Actual Results

Differ from Assumptions

Impairment of Goodwill and Other Indefinite-Lived Intangible Assets- We evaluate goodwill and other indefinite-lived intangible assets for impairment annually during our fourth quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant and sustained decline in our stock price, that would indicate that impairment may exist. When evaluating for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that there is an impairment. If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the carrying value exceeds its fair value, we will calculate the estimated fair value. Fair value is the price a willing buyer would pay and is typically calculated using a discounted cash flow analysis. Where deemed appropriate, we may also utilize a market approach for estimating fair value. Impairment charges are calculated as the amount by which the carrying amount exceeds its fair value, but not to exceed the carrying value.

When assessing goodwill and other indefinite-lived intangible assets for impairment, our decision to perform a qualitative impairment assessment is influenced by a number of factors, including the significance of the excess of the estimated fair value over carrying value at the last assessment date and the amount of time since the last quantitative fair value assessments. Our quantitative impairment calculations contain uncertainties, as we are required to make assumptions and to apply judgment when estimating future cash flows, including projected revenue and operating results, as well as selecting appropriate discount rates and an assumed royalty rate. Estimates of revenue and operating results are based on internal projections considering past performance and forecasted changes, strategic initiatives, and the business environment impacting performance. Discount rates and a royalty rate are selected based on market participant assumptions. These estimates are highly subjective, and our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance and changes in our business strategies.

As of January 31, 2026, we had goodwill of $93.7 million, $25.8 million, $7.0 million, and $4.3 million for the U.S. Retail, Keds, Rubino, and Topo reporting units, respectively. As of the fourth quarter measurement date, we performed a qualitative impairment assessment for the goodwill in the U.S. Retail and Topo reporting units and determined it is not more likely than not that there is an impairment for either reporting unit. Also, we determined for the Keds and Rubino reporting units that the fair values were in excess of their carrying values and a 10% decrease in fair value would not result in an impairment charge.

As of January 31, 2026, we had indefinite-lived tradenames of $19.8 million and $44.2 million within the Retail segment and Brand Portfolio segment, respectively. The Retail segment includes the indefinite-lived tradenames of The Shoe Co. and Rubino and the Brand Portfolio segment includes the indefinite-lived tradename of Keds. We have determined that the fair value of each of the indefinite-lived tradenames was in excess of the carrying value and a 10% decrease in fair value would not result in an impairment charge.

As we periodically reassess estimated future cash flows and asset fair values, changes in our estimates and assumptions may cause us to realize material impairment charges in the future.

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Policy

Judgments and Estimates

Effect if Actual Results

Differ from Assumptions

Income Taxes- We determine the aggregate amount of income tax provision or benefit to accrue and the amount that will be currently receivable or payable based upon tax statutes of each jurisdiction in which we do business. Deferred tax assets and liabilities, as a result of these timing differences, are reflected on our balance sheet for temporary differences that are expected to reverse in subsequent years. A valuation allowance is established against deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. We review and update our tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been adequately resolved. Additionally, uncertain positions may be remeasured as warranted by changes in facts or law.

Our ability to recover deferred tax assets depends on several factors, including the amount of net operating losses we can carry back and our ability to project future taxable income. In evaluating future taxable income, significant weight is given to positive and negative evidence that is objectively verifiable. In addition, tax laws, regulations, and policies in various jurisdictions may be subject to significant change due to economic, political and other conditions, and significant judgment is required in estimating amounts for income taxes. There may be transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The U.S. Treasury Department, the U.S. Internal Revenue Service, and other standard-setting bodies could interpret or issue guidance on how provisions of tax laws, regulations, and policies will be applied or otherwise administered that is different from our interpretation. In addition, state, local or foreign jurisdictions may enact tax laws that could result in further changes to taxation and materially affect our financial position and results of operations.

As of January 31, 2026, we had a valuation allowance of $13.8 million primarily related to state deferred tax assets. We also had gross unrecognized tax benefits of $9.3 million. However, we may have material adjustments in the future that may impact our income tax amounts based on additional information, additional guidance or revised interpretations.