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Designer Brands (DBI) to Post Q1 Earnings: What's in Store?

Designer Brands Inc. DBI is likely to register a decrease in top line when it reports first-quarter fiscal 2023 results on Jun 8, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $763.5 million, indicating a decline of 8.1% from the prior-year quarter’s level.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 27 cents per share, which compares unfavorably with earnings per share of 48 cents recorded in the year-ago quarter. The consensus estimate has declined 3.6% over the past 30 days.

Designer Brands has a trailing four-quarter earnings surprise of 142.7% on average. In the last reported quarter, the company beat the Zacks Consensus Estimate by 450%.

Key Factors to Note

Designer Brands has been witnessing a challenging operating landscape, with several issues like high inflation, supply-chain bottlenecks, escalating costs and expenses, as well as currency headwinds. Of late, a higher inflationary environment has been affecting consumers’ discretionary spending, which in turn is expected to have hurt the company’s top-line performance.

Over the past few quarters, rising sales and operating expenses have been a concern for the company. For instance, in fiscal 2022, the company’s cost of sales increased 5.1% year over year while total operating expenses were up 3%. Also, the impacts of changes in labor and raw material costs might have hurt its margin and profitability in the to-be-reported quarter.

Given its extensive regional presence, Designer Brands’ operations are subject to global economic and political risks, as well as forex woes. A stronger U.S. dollar might have hurt the company's overseas business in the fiscal first quarter.

However, the company has been benefiting from its brand-building strategy. Its focus on customer acquisition, optimizing assortment and developing brands is also expected to have contributed to its growth. Also, its flexible business model has been helping to navigate a tough macro landscape.

The company's investments in product innovation and digital initiatives, along with its focus on operational execution and cost-control measures, are likely to have supported its fiscal first-quarter performance.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Designer Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that’s not the case here as elaborated below.

Designer Brands has an Earnings ESP of -7.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Designer Brands Inc. Price and EPS Surprise

Designer Brands Inc. Price and EPS Surprise
Designer Brands Inc. Price and EPS Surprise

Designer Brands Inc. price-eps-surprise | Designer Brands Inc. Quote

The company currently has a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are three companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Chipotle Mexican Grill, Inc. CMG currently has an Earnings ESP of +0.17%. The company is likely to register top- and bottom-line increases when it reports its upcoming quarter results. The consensus mark for CMG’s quarterly revenues is pegged at $2.51 billion, which suggests growth of 13.6% from the figure reported in the prior-year quarter.

CMG currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Chipotle Mexican’s earnings has moved from $11.96 per share to $12.11 in the past 30 days.

Fortune Brands Innovations, Inc. FBIN currently has an Earnings ESP of +0.59% and a Zacks Rank #2. The company is likely to register declines in its top and bottom lines when it reports its upcoming quarter numbers. The consensus mark for its quarterly earnings has moved down 1% in the past 30 days to $1.01 per share.

The Zacks Consensus Estimate for FBIN's quarterly revenues is pegged at $1.2 billion, which suggests a decline of 44.8% from the figure reported in the prior-year quarter.

Macy's, Inc. M currently has an Earnings ESP of +2.81% and a Zacks Rank #3. The company is likely to register top- and bottom-line declines when it reports its upcoming quarterly results. The consensus mark for M’s quarterly revenues is pegged at $5.1 billion, which suggests a 4.4% fall from the figure reported in the prior-year quarter.

The consensus mark for M’s quarterly earnings has been unchanged in the past 30 days at 46 cents per share. The consensus estimate suggests a decline of 57.4% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Macy's, Inc. (M) : Free Stock Analysis Report

Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report

Designer Brands Inc. (DBI) : Free Stock Analysis Report

Fortune Brands Innovations, Inc. (FBIN) : Free Stock Analysis Report

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