Designer Brands Inc. (NYSE:DBI) reported fourth-quarter results on Thursday that exceeded Wall Street estimates, sending the footwear retailer’s shares up nearly 6% in pre-market trading despite cautious guidance for the coming year.
For the quarter ended January 31, 2026, the company posted an adjusted loss of $0.31 per share, outperforming the analyst consensus forecast of a $0.51 loss. Revenue totaled $713.6 million, roughly in line with the prior year and slightly ahead of expectations of $709.45 million.
Comparable sales declined 1.9% during the quarter, marking the third straight quarter of improving top-line trends.
Gross margin improved significantly, rising 280 basis points year over year to 42.4%, compared with 39.6% in the same period last year. The company attributed the margin expansion to disciplined operational execution and progress on strategic initiatives. For the full fiscal year, adjusted operating income finished well above the upper end of the company’s guidance range.
“Our fourth quarter and fiscal 2025 results reflect disciplined execution as we strengthened the business and delivered sequential improvement across key financial metrics throughout the year,” said Doug Howe, Chief Executive Officer.
Looking ahead, Designer Brands forecast fiscal 2026 earnings of $0.28 to $0.38 per share. The midpoint of $0.33 is below the analyst consensus estimate of $0.42. The company expects annual net sales to range between a 1% decline and a 1% increase.
Designer Brands ended the quarter with $50.9 million in cash and cash equivalents and total debt of $435.0 million, down from $491.0 million a year earlier. Inventory levels also declined to $563.5 million from $599.8 million in the previous year.
The company also declared a dividend of $0.05 per share, scheduled to be paid on April 10, 2026.