Designer Brands Intrinsic Value Calculation – DESIGNER BRANDS Reports Fourth Quarter FY2023 Earnings on March 16 2023

Earnings Overview

On March 16 2023, DESIGNER BRANDS ($NYSE:DBI) revealed its financial performance for Q4 of FY2023, ending January 31 2023. Total revenue for the period was USD 45.1 million — a 213.0% year-on-year increase. At the same time, net income decreased by 7.5% when compared to the same quarter in the prior year, totaling USD 760.5 million.

Transcripts Simplified

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the call over to Rachel Mertz, Vice President of Investor Relations. Ma’am, you may begin. Rachel Mertz: Thanks, operator. Joining me today are Roger Rawlins, Chief Executive Officer; and Joy Mangano, Chief Financial Officer. Before we begin, I would like to remind everyone that certain statements made on this call which are not historical facts may be deemed forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement.

Additionally, during this call we will make reference to certain non-GAAP financial measures, which we believe provide additional insights into the company’s operational performance. Reconciliations of these measures can be found in the press release issued earlier today, as well as on our website at http://www.designerbrands.com. Now I’ll turn the call over to Roger. Roger Rawlins: Thank you Rachel and good morning everyone. Designer Brands had a solid start to the year with first quarter results that were generally in line with our expectations. We executed the strategic initiatives we set out at the start of the year, allowing us to deliver a strong finish to the quarter. We are pleased to report that our digital business continued to grow at a double-digit rate in the quarter. We expect this progress to continue as we focus on more closely aligning inventory with expected sales levels in the current environment. Now I’ll turn the call over to Joy. Joy Mangano: Thanks Roger. Looking ahead, we believe that our focus on executing marketing initiatives more efficiently combined with our focus on inventory control will enable us to drive profitable growth and create long-term value for shareholders. Now I’ll turn the call back over to Roger for closing remarks before Q&A. Roger Rawlins: Thank you Joy. We are confident that our disciplined approach to cost management and inventory control will enable us to drive profitable growth and create long-term shareholder value. We look forward to providing updates on our progress during our next earnings call, and thank you for joining us today. Operator: Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Designer Brands. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Designer Brands. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Designer Brands. More…

Key Ratios Snapshot

Some of the financial key ratios for Designer Brands are shown below. More…

Market Price

DESIGNER BRANDS reported their fourth quarter earnings for the fiscal year ending 2023 on Thursday, March 16. On the same day, the company’s stock opened at $8.7 and closed at $9.3, a 12.6% jump from the previous closing price of $8.3. This marked a significant increase for DESIGNER BRANDS and demonstrated the success of their strategies leading up to the end of their fiscal year. Investors saw this as a positive signal for the brand and the stock has seen an uptick in the past few days, with analysts predicting a further increase in the coming weeks.

This comes as good news to DESIGNER BRANDS as they look to end their fourth quarter on a high note and start the new fiscal year with momentum. The company has been making strides in the fashion industry and its financial performance is a testament to their efforts to stay competitive. This is a promising sign for the company and its investors, who will be looking forward to continued success in the future. Live Quote…

Analysis – Designer Brands Intrinsic Value Calculation

GoodWhale has conducted an in-depth analysis of the fundamentals of DESIGNER BRANDS. Our proprietary Valuation Line has determined the intrinsic value of the stock to be around $15.0. This means that DESIGNER BRANDS is currently trading at a price of $9.3, which represents a 38.0% discount compared to its intrinsic value. More…

Peers

Designer Brands Inc. is facing fierce competition in the fashion industry from AMAGASA Co Ltd, Roots Corp, and Boot Barn Holdings Inc. Each of these companies has their own unique approach to the fashion industry, and they are all vying for a share of the market. As a result, Designer Brands Inc. must remain agile and responsive to their competitors in order to maintain success in this highly competitive landscape.

– AMAGASA Co Ltd ($TSE:3070)

KAMAGASA Co Ltd is a Japanese based company that specializes in the production of automotive parts and components. The company has a market cap of 2.39 billion as of 2022, reflecting its strong and steady growth throughout the years. Its Return on Equity (ROE) also stands at -145.5%, indicating that the company is able to generate a significant amount of profits relative to its shareholders’ equity. This is indicative of the company’s ability to generate substantial returns for its investors and shareholders.

– Roots Corp ($TSX:ROOT)

Roots Corp is a Canadian apparel and lifestyle company focused on providing quality clothing and accessories that combine style, comfort and a connection to nature. Its market cap of 110.97M as of 2022 reflects its strong financial performance, with a Return on Equity of 8.66%, which is higher than the average for the apparel and lifestyle industry. The company’s focus on quality and sustainability has enabled it to capture a large consumer base and grow its market share. Additionally, Roots Corp has been able to leverage its brand recognition and create a loyal customer base that continues to support the company.

– Boot Barn Holdings Inc ($NYSE:BOOT)

Boot Barn Holdings Inc is a publicly traded American retailer of western and work-related footwear, apparel, and accessories. The company operates over 300 stores throughout the United States, and its products are also available online. As of 2022, the market cap of Boot Barn Holdings Inc is 1.84 billion dollars. This market cap reflects the company’s strong financial performance and expected future growth. Additionally, Boot Barn Holdings Inc has a Return on Equity (ROE) of 23.87%. This indicates that the company is generating a high rate of return on its equity investments and is an indicator of strong financial health.

Summary

Investors have reacted positively to DESIGNER BRANDS‘ fourth quarter earnings report for FY2023, with the stock price increasing on the news. Revenue for the quarter was up 213.0% compared to the same period in the prior year, reaching USD 45.1 million.

However, net income decreased 7.5% year-on-year to USD 760.5 million. Despite the decline in profits, investors remain optimistic due to the strong revenue growth and continued focus on cost reduction. This optimism is reflected in the stock price movements. As such, investors may want to consider taking a long position on DESIGNER BRANDS.