Designer Brands (NYSE:DBI) - Share price, News & Analysis

Q: What is the Fair Price of DBI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DBI ($12.74) is trading below our estimate of [[fair value]] ($18.74)

DBI fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	3/6
Financial Health	4/6
Dividends	2/6

DBI Stock Overview

Designer Brands Inc., together with its subsidiaries, designs, manufactures, and retails footwear and accessories for women, men, and kids primarily in North America.

Rewards

Trading at 32% below our estimate of its fair value

Became profitable this year

Risk Analysis

Has a high level of debt

Designer Brands Competitors

Caleres

NYSE:CAL

US$943.8m

Guess'

NYSE:GES

US$1.0b

Abercrombie & Fitch

NYSE:ANF

US$866.7m

Chico's FAS

NYSE:CHS

US$620.7m

Price History & Performance

Summary of all time highs, changes and price drops for Designer Brands
Historical stock prices
Current Share Price	US$12.74
52 Week High	US$17.42
52 Week Low	US$11.24
Beta	2.16
1 Month Change	-17.91%
3 Month Change	-5.98%
1 Year Change	-22.22%
3 Year Change	-33.72%
5 Year Change	-27.16%
Change since IPO	-50.36%

Recent News & Updates

Jun 07

Designer Brands: Turning Towards Profitability With Its Strong Long-Term Outlook

Despite the faltering economy, Designer brands reported a steady increase in comparable sales and anticipates a sustainable demand environment. '26 targets remain solid and present risk is now bearable in a more controlled Covid-19 environment in North America. As a result of operational efficiency, Designer Brands continue to deliver solid margin performance. This resulted in a more compelling Designer Brands, especially in light of its increasing shareholder value as a result of debt reduction, share repurchases, and dividend reinstatement. This stock is undervalued compared to its future potential, making it a buy at today’s weakness.

Shareholder Returns

	DBI	US Specialty Retail	US Market
7D	-12.7%	-7.9%	-2.5%
1Y	-22.2%	-32.6%	-21.2%

Return vs Industry: DBI exceeded the US Specialty Retail industry which returned -33.3% over the past year.

Return vs Market: DBI matched the US Market which returned -21.7% over the past year.

Price Volatility

Is DBI's price volatile compared to industry and market?
DBI volatility
DBI Average Weekly Movement	7.5%
Specialty Retail Industry Average Movement	8.9%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: DBI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: DBI's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1991	13,500	Roger Rawlins	https://www.designerbrands.com

Designer Brands Inc., together with its subsidiaries, designs, manufactures, and retails footwear and accessories for women, men, and kids primarily in North America. The company operates through three segments: U.S. Retail, Canada Retail, and Brand Portfolio.

Designer Brands Fundamentals Summary

How do Designer Brands's earnings and revenue compare to its market cap?
DBI fundamental statistics
Market Cap	US$896.30m
Earnings (TTM)	US$163.64m
Revenue (TTM)	US$3.32b

5.5x

P/E Ratio

0.3x

P/S Ratio

Is DBI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DBI income statement (TTM)
Revenue	US$3.32b
Cost of Revenue	US$2.20b
Gross Profit	US$1.13b
Other Expenses	US$964.63m
Earnings	US$163.64m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.33
Gross Margin	33.94%
Net Profit Margin	4.92%
Debt/Equity Ratio	73.6%

How did DBI perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

2%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is DBI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DBI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DBI. This is calculated by dividing DBI's market cap by their current preferred multiple.
What is DBI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$896.30m

DBI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.6x
Enterprise Value/EBITDA	6.1x
PEG Ratio	3.6x

Price to Earnings Ratio vs Peers

How does DBI's PE Ratio compare to its peers?

DBI PE Ratio vs Peers

The above table shows the PE ratio for DBI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	5.7x
CAL Caleres	5.4x	0.5%	US$943.8m
GES Guess'	6.1x	18.9%	US$1.0b
ANF Abercrombie & Fitch	4.2x	-17.0%	US$866.7m
CHS Chico's FAS	6.9x	n/a	US$620.7m
DBI Designer Brands	5.5x	1.5%	US$896.3m

Forward PE

Price-To-Earnings vs Peers: DBI is good value based on its Price-To-Earnings Ratio (5.5x) compared to the peer average (5.7x).

Price to Earnings Ratio vs Industry

How does DBI's PE Ratio compare vs other companies in the US Specialty Retail Industry?

Price-To-Earnings vs Industry: DBI is good value based on its Price-To-Earnings Ratio (5.5x) compared to the US Specialty Retail industry average (5.8x)

Price to Earnings Ratio vs Fair Ratio

What is DBI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DBI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.5x
Fair PE Ratio	10.2x

Price-To-Earnings vs Fair Ratio: DBI is good value based on its Price-To-Earnings Ratio (5.5x) compared to the estimated Fair Price-To-Earnings Ratio (10.2x).

Share Price vs Fair Value

What is the Fair Price of DBI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DBI ($12.74) is trading below our estimate of fair value ($18.74)

Significantly Below Fair Value: DBI is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: DBI is poor value based on its PEG Ratio (3.6x)

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Future Growth

How is Designer Brands forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

1.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DBI's forecast earnings growth (1.5% per year) is below the savings rate (1.9%).

Earnings vs Market: DBI's earnings (1.5% per year) are forecast to grow slower than the US market (13.6% per year).

High Growth Earnings: DBI's earnings are forecast to grow, but not significantly.

Revenue vs Market: DBI's revenue (2.4% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: DBI's revenue (2.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DBI's Return on Equity is forecast to be high in 3 years time (23.6%)

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Past Performance

How has Designer Brands performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-32.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DBI has high quality earnings.

Growing Profit Margin: DBI became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: DBI's earnings have declined by 32.9% per year over the past 5 years.

Accelerating Growth: DBI has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: DBI has become profitable in the last year, making it difficult to compare its past year earnings growth to the Specialty Retail industry (40.3%).

Return on Equity

High ROE: DBI's Return on Equity (39.3%) is considered high.

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Financial Health

How is Designer Brands's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DBI's short term assets ($999.4M) exceed its short term liabilities ($757.3M).

Long Term Liabilities: DBI's short term assets ($999.4M) exceed its long term liabilities ($913.7M).

Debt to Equity History and Analysis

Debt Level: DBI's net debt to equity ratio (60.5%) is considered high.

Reducing Debt: Insufficient data to determine if DBI's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DBI's debt is well covered by operating cash flow (43.1%).

Interest Coverage: DBI's interest payments on its debt are well covered by EBIT (8.9x coverage).

Balance Sheet

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Dividend

What is Designer Brands's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.57%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DBI's dividend (1.57%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: DBI's dividend (1.57%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

Stable Dividend: DBI's dividend payments have been volatile in the past 10 years.

Growing Dividend: DBI's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (2.2%), DBI's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (15.2%), DBI's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure

CEO

Roger Rawlins (55 yo)

6.42yrs

Tenure

US$9,735,430

Compensation

Mr. Roger L. Rawlins was Interim President of DSW Shoe Warehouse, Inc. since February 18, 2020. He serves as Chief Executive Officer of Designer Brands since January 2016. Mr. Rawlins serves as Director at...

CEO Compensation Analysis

Compensation vs Market: Roger's total compensation ($USD9.74M) is above average for companies of similar size in the US market ($USD4.03M).

Compensation vs Earnings: Roger's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: DBI's management team is not considered experienced ( 1 years average tenure), which suggests a new team.

Board Members

Experienced Board: DBI's board of directors are seasoned and experienced ( 14.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/04/30
Annual Earnings	2022/01/29