Designer Brands Inc. announced its financial results for the second quarter ended August 1, 2026, reporting a net sale decrease of 1.2% to $730.6 million. Total comparable sales decreased by 2.4% for the quarter. Despite the sales decline, the company reported a significant improvement in profitability, with reported gross profit reaching $365.4 million and a gross margin of 50.0%, compared to 43.6% in the prior year. Reported net income attributable to the company was $17.6 million, or $0.31 per diluted share.
On a non-GAAP basis, adjusted net income was $19.2 million, or $0.34 per adjusted diluted share. The company noted a meaningful improvement in profitability year-over-year, driven by gross margin expansion and sales growth in its Brand Portfolio segment. The Brand Portfolio segment saw net sales increase by 17.9% to $86.3 million.
In terms of balance sheet health, Designer Brands reduced total debt by $93.0 million compared to the second quarter of 2025, bringing total debt to $423.1 million. Cash and cash equivalents totaled $51.6 million, with $146.2 million available for borrowings under its revolving credit facility. The company ended the quarter with inventories of $594.7 million.
Following a strong start to the third quarter, the company is raising its full year 2026 guidance. For net sales, the company now expects a range of flat to up 1%, up from the previous guidance of down 1%. For adjusted diluted earnings per share, the new guidance range is $0.47 to $0.52, up from the previous range of $0.28 to $0.38.
The company also announced a quarterly cash dividend of $0.05 per share for both Class A and Class B common shares. This dividend will be paid on October 7, 2026, to shareholders of record as of the close of business on September 24, 2026.
