Designer Brands Inc. (NYSE:DBI) Q3 2022 Earnings Conference Call December 1, 2022 8:30 AM ET

Company Participants

Roger Rawlins - Chief Executive Officer

Jared Poff - Executive Vice President, Chief Financial Officer

Doug Howe - President, DSW

Jesse Miller - Investor Relations

Conference Call Participants

Jay Sole - UBS

Gabby Carbone - Deutsche Bank

Operator

Good morning and welcome to the Designer Brands Incorporated third quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Jesse Miller. Please go ahead.

Jesse Miller

Good morning. Earlier today, the company issued a press release comparing results of operations for the 13-week period ended October 29, 2022 to the 13-week period ended October 30, 2021.

Please note that remarks made about the future expectations, plans and prospects of the company constitute forward-looking statements. Results may differ materially due to various factors listed in today’s press release and the company’s public filings with the SEC. The company assumes no obligation to update any forward-looking statements.

Joining us today are Roger Rawlins, Chief Executive Officer, Jared Poff, Chief Financial Officer, and Doug Howe, President of DSW.

Now let me turn the call over to Roger.

Roger Rawlins

Good morning and thank you everyone for joining us today.

We posted another consecutive quarter of solid results and made material progress on our brand-building journey. We ended the quarter with comparable sales up 3% compared to the third quarter of 2021, which was on top of strong comp net sales growth last year of 41%. We are incredibly proud of these results as we lapped a record third quarter in 2021 and invite you to review our earnings infographic on our Investor Relations site that highlights some of these accomplishments. Notably, we made tangible progress against our long term plan of doubling sales of our own brands by 2026, while also maintaining our sales levels of national brands as we continue to strengthen relationships with our top partners.

As you know, our owned brand strategy will continue to be the key driver of our growth over the next five years as we have the unique ability to intimately understand our customers so we can design, source and sell the products they love. We’re excited to share that in the third quarter, owned brand sales grew 25% compared to the same period last year. Our direct-to-consumer sales through our retail stores and websites delivered a 33% increase to last year and wholesale distribution also grew at 8%. What makes this even more impressive, this growth is coming at a time when the industry is flooded with inventory.