Designer Brands Inc. has stopped short of providing an outlook for the fiscal year 2020 as fear surrounding the coronavirus crisis batters its stock and negatively impacts other aspects of its business.
The DSW parent released today its fourth-quarter earnings report, noting net losses of $3.66 million, or $0.05 per share, compared with analysts’ forecasts of a $0.06 loss. Revenues for the three-month period ended Feb. 1 dropped 1.48% to $829.62 million, missing market watchers’ bets of $839.97 million. In a statement, CEO Roger Rawlins lamented the business impact of the coronavirus, which has sickened more than 185,000 people worldwide and killed 7,330.
“The impact of COVID-19 on our business and industry is unprecedented, and our thoughts are with those individuals who have been directly affected by the virus,” he said. “Due to the current level of uncertainty, which we expect to continue in the coming months due to the rapidly evolving and unprecedented circumstances surrounding COVID-19, we are refraining from providing 2020 guidance.”
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Fears of the virus expanded last week after the World Health Organization declared the coronavirus a pandemic. Industries across the board have been recording losses as many governments around the world have imposed restrictions or bans on travel in an effort to contain the spread of the illness. Sectors recording losses include the import-export industry, which has faced port closures and weeks of slowed production overseas, and the retail sector, through widespread store closures and significantly reduced foot traffic at those that remain open.
Monday, Designer Brands joined a slew of retailers — including Nordstrom Inc. and Famous Footwear owner Caleres Inc. — that saw their stocks clobbered as coronavirus-panicked investors brushed off the Federal Reserve’s emergency interest rate cut. At market close, shares for DBI were down nearly 40% to $5.95.
Amid the outbreak, DSW stores across North America have temporarily closed, but its warehouses remain open to complete online orders. The company’s retail employees will continue to be compensated “in the near term,” Rawlins said.
For the 2019 fiscal year, DBI recorded adjusted earnings per share of $1.53 on profits of $114.3 million. Revenues rose 9.9% to $3.49 billion, while comps improved by 0.8%, compared with last year’s 6.1% increase. In Tuesday premarket trading, DBI’s stock advanced 1.68% to $6.05.
“We remain focused on strengthening our relationship with our customers and increasing our market share through the execution of our three strategic pillars of developing differentiated products; offering differentiated experiences, both in store and online; and focusing on new growth opportunities to position Designer Brands well for the long term,” Rawlins added.
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