Designer Brands Inc., the parent company of DSW, closed the second quarter of 2025 with net sales down 4.2% to $739.8 million—a less steep decline compared to the 8% drop reported in the first quarter. Comparable sales fell by 5%, showing improvement from the previous -7.8%.
The true growth driver was Topo Athletic, the brand acquired in 2022, which saw sales increase by 45% year-over-year, following an 84% jump in Q1 and nearly 80% growth in 2024. According to ceo Doug Howe, expanded distribution, increased in-store presence, and timely pricing strategies supported profitability without dampening demand.
Adjusted net income declined slightly by 2.3% to $16.7 million ($0.34 per share), but far exceeded Wall Street expectations, which were set at $0.14 per share. Reported net income was $10.8 million, down from $13.8 million a year earlier.
DSW, the group’s flagship retail chain, also showed signs of recovery: the sales decline was less pronounced than in the previous quarter, supported by gradually improving store traffic, better assortment availability, and co-branded marketing campaigns. Howe noted that the chain is also benefiting from rebranding efforts and new in-store initiatives aimed at boosting customer loyalty.
Howe emphasized that performance improved sequentially in both the U.S. and Canada, with rising gross margins, stronger conversion rates, and renewed customer engagement in stores. However, the broader environment remains uncertain: the company reiterated its decision not to provide full-year guidance, citing macroeconomic risks and global trade tensions.
Management expressed cautious optimism for the coming months, pointing to stronger demand in key categories, the positive impact of partnerships with major brands, and a renewed identity for DSW through marketing initiatives, rebranding, and new concept stores designed to enhance customer loyalty.
