Q2 Earnings Highlights: Designer Brands (NYSE:DBI) Vs The Rest Of The Footwear Retailer Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the footwear retailer stocks, including Designer Brands (NYSE:DBI) and its peers.

Footwear sales–like their apparel counterparts–are driven by seasons, trends, and innovation more so than absolute need and similarly face the bigger-picture secular trend of e-commerce penetration. Footwear plays a part in societal belonging, personal expression, and occasion, and retailers selling shoes recognize this. Therefore, they aim to balance selection, competitive prices, and the latest trends to attract consumers. Unlike their apparel counterparts, footwear retailers most sell popular third-party brands (as opposed to their own exclusive brands), which could mean less exclusivity of product but more nimbleness to pivot to what’s hot.

The 4 footwear retailer stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

In light of this news, footwear retailer stocks have held steady with share prices up 4.2% on average since the latest earnings results.

Weakest Q2: Designer Brands (NYSE:DBI)

Founded in 1969 as a shoe importer and distributor, Designer Brands (NYSE:DBI) is an American discount retailer focused on footwear and accessories.

Designer Brands reported revenues of $771.9 million, down 2.6% year on year. This print fell short of analysts’ expectations by 5.4%. Overall, it was a disappointing quarter for the company with underwhelming earnings guidance for the full year and a miss of analysts’ earnings estimates.

"This quarter, we further built on our track record of steady improvement as we continued to refine and refresh our strategic initiatives intended to accelerate our ongoing business transformation," stated Doug Howe, Chief Executive Officer.

Designer Brands delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $5.77.

Read our full report on Designer Brands here, it’s free.

Best Q2: Foot Locker (NYSE:FL)

Known for store associates whose uniforms resemble those of referees, Foot Locker (NYSE:FL) is a specialty retailer that sells athletic footwear, clothing, and accessories.

Foot Locker reported revenues of $1.9 billion, up 1.9% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates and optimistic earnings guidance for the full year.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 27.5% since reporting. It currently trades at $23.77.

Is now the time to buy Foot Locker? Access our full analysis of the earnings results here, it’s free.

Shoe Carnival (NASDAQ:SCVL)

Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream brands for the entire family.

Shoe Carnival reported revenues of $332.7 million, up 12.9% year on year, falling short of analysts’ expectations by 1.1%. It was a slower quarter as it posted underwhelming earnings guidance for the full year and a miss of analysts’ gross margin estimates.

Interestingly, the stock is up 4.4% since the results and currently trades at $39.18.

Read our full analysis of Shoe Carnival’s results here.

Boot Barn (NYSE:BOOT)

With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE:BOOT) is a western-inspired apparel and footwear retailer.

Boot Barn reported revenues of $423.4 million, up 10.3% year on year. This number surpassed analysts’ expectations by 1.6%. It was a strong quarter as it also put up full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ earnings estimates.

Boot Barn pulled off the biggest analyst estimates beat among its peers. The stock is up 40.4% since reporting and currently trades at $162.68.

Read our full, actionable report on Boot Barn here, it’s free.

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