UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~May~~August 32, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from						to

Commission file number 001-32545


DESIGNER BRANDS INC.
(Exact name of registrant as specified in its charter)

Ohio

31-0746639

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

810 DSW Drive,

Columbus,

Ohio

43219

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (614) 237-7100

Not Applicable (Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Shares, without par value	DBI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

Number of shares outstanding of each of the registrant's classes of common stock, as of ~~June~~September 32, 2025: 41,~~091~~810,~~653~~747 Class A common shares and 7,732,733 Class B common shares.

DESIGNER BRANDS INC.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1	Financial Statements	1
	Condensed Consolidated Statements of Operations	1
	Condensed Consolidated Statements of Comprehensive Loss	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Shareholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	1820
Item 3	Quantitative and Qualitative Disclosures About Market Risk	2631
Item 4	Controls and Procedures	2631
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	2631
Item 1A	Risk Factors	2631
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	2732
Item 3	Defaults Upon Senior Securities	2732
Item 4	Mine Safety Disclosures	2732
Item 5	Other Information	2732
Item 6	Exhibits	2833
	SIGNATURE	2934

All references to "we," "us," "our," "Designer Brands," ~~"Designer Brands~~ Inc.," or the "Company" in this Quarterly Report on Form 10-Q for the quarter ended ~~May~~August 32, 2025 (this "Form 10-Q") mean Designer Brands Inc. and its subsidiaries.

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Cautionary Statement Regarding Forward-Looking Information for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995

Certain statements in this Form 10-Q may constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of words such as "outlook," "could," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. Any forward-looking statements contained in this Form 10-Q are based upon current plans, estimates, expectations and assumptions relating to our operations, results of operations, financial condition, and liquidity. The inclusion of any forward-looking statements should not be regarded as a representation by us or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. Such forward-looking statements are subject to numerous risks, uncertainties, and other factors, many of which are outside of our control, that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. In addition to those factors described under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 (the "2024 Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 24, 2025 and Part II, Item 1A. Risk Factors in this Form 10-Q, and otherwise in our reports and filings with the SEC, there are a number of important factors that could cause actual results, performance, or achievements to differ materially from those discussed in forward-looking statements that include, but are not limited to, the following:

•uncertain general economic and financial conditions, including economic volatility and potential downturn or recession, supply chain disruptions, new or increased tariffs and other barriers to trade, fluctuating interest rates, unemployment rates and inflationary pressures, and the related impacts to consumer discretionary spending, as well as our ability to plan for and respond to the impact of these conditions;

•our ability to anticipate and respond to rapidly changing consumer preferences, seasonality, customer expectations, and fashion trends;

•the impact on our consumer traffic and demand, our business operations, and the operations of our suppliers, as we experience unseasonable weather, climate change evolves, and the frequency and severity of weather events increases;

•our ability to execute on our business strategies, including growing our Brand Portfolio segment, enhancing in-store and digital shopping experiences, and meeting consumer demands;

•our ability to successfully and efficiently integrate acquisitions in a manner that does not impede growth;

•our ability to maintain strong relationships with our suppliers, vendors, licensors, and retailer customers;

•risks related to losses or disruptions associated with our distribution systems, including our distribution centers and stores, whether as a result of reliance on third-party providers or otherwise;

•risks related to cyber security threats and privacy or data security breaches or the potential loss or disruption of our information technology ("IT") systems, or those of our vendors;

•risks related to the implementation of new or updated IT systems;

•our ability to protect our reputation and to maintain the brands we license;

•our reliance on our reward programs and marketing to drive traffic, sales, and customer loyalty;

•our ability to successfully integrate new hires or changes in leadership and retain our existing management team, and to continue to attract qualified new personnel;

•risks related to restrictions imposed by our senior secured asset-based revolving credit facility, as amended ("ABL Revolver"), and our senior secured term loan credit agreement, as amended ("Term Loan"), that could limit our ability to fund our operations;

•our competitiveness with respect to style, price, brand availability, shopping platforms, and customer service;

•risks related to our international operations and our reliance on foreign sources for merchandise;

•our ability to comply with laws and regulations, as well as other legal obligations;

•risks associated with climate change and other corporate responsibility issues; and

•uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results, performance, or achievements may vary materially from what we have projected. Furthermore, new factors emerge from time to time, and it is not possible for management to predict all such factors, nor can management assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

			Three months ended
(unaudited and in thousands, except per share amounts)	Three months ended				Six months ended
(unaudited and in thousands, except per share amounts)					May 3, 2025		May 4, 2024
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net sales	$	739,762	$	771,900	$	~~686~~1,~~909~~426,671	$	~~746~~1,~~596~~518,496
Cost of sales	(416,829)		(432,351)		(~~391~~808,~~783~~612)		(~~416~~848,~~585~~936)
Gross profit	322,933		339,549		~~295~~618,~~126~~059		~~330~~669,~~011~~560
Operating expenses	(297,462)		(313,531)		(~~301~~599,~~862~~324)		(~~323~~637,~~493~~024)
Income from equity investments	2,578		2,571		25,~~427~~005		25,~~864~~435
Impairment charges	(1,466)		—		(24,~~953~~419)		—
Operating profit (loss)					(7,262)		9,382
Operating profit	26,583		28,589		19,321		37,971
Interest expense, net	(11,667)		(11,035)		(1123,~~868~~535)		(1122,~~561~~596)
Non-operating income (expenses), net					8		(143)
Non-operating expenses, net	(78)		(109)		(70)		(252)
Loss before income taxes					(19,122)		(2,322)
Income (loss) before income taxes	14,838		17,445		(4,284)		15,123
Income tax benefit					1,986		3,207
Income tax provision	(3,557)		(3,363)		(1,571)		(156)
Net income (loss)	11,281		14,082		(175,~~136~~855)		~~885~~14,967
Net income attributable to redeemable noncontrolling interest	(454)		(258)		(~~288~~742)		(~~102~~360)
Net income (loss) attributable to Designer Brands Inc.	$	10,827	$	13,824	$	(176,~~424~~597)	$	~~783~~14,607
Earnings (loss) per share attributable to Designer Brands Inc.:
Basic earnings (loss) per share	$	0.22	$	0.24	$	(0.3614)	$	0.0125
Diluted earnings (loss) per share	$	0.22	$	0.24	$	(0.3614)	$	0.0125
Weighted average shares used in per share calculations:
Basic shares	49,109		57,162		48,~~243~~678		57,~~464~~313
Diluted shares	49,734		58,576		48,~~243~~678		5958,~~470~~978

The accompanying notes are an integral part of the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

			Three months ended
(unaudited and in thousands)	Three months ended				Six months ended
(unaudited and in thousands)					May 3, 2025		May 4, 2024
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net income (loss)	$	11,281	$	14,082	$	(175,~~136~~855)	$	~~885~~14,967
Other comprehensive income (loss)-
Foreign currency translation gain (loss)	9		(977)		3,~~498~~507		(~~903~~1,880)
Comprehensive loss					(13,638)		(18)
Comprehensive income (loss)	11,290		13,105		(2,348)		13,087
Comprehensive income attributable to redeemable noncontrolling interest	(454)		(258)		(~~288~~742)		(~~102~~360)
Comprehensive loss attributable to Designer Brands Inc.					$	(13,926)	$	(120)
Comprehensive income (loss) attributable to Designer Brands Inc.	$	10,836	$	12,847	$	(3,090)	$	12,727

The accompanying notes are an integral part of the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

~~May~~August 32, 2025

February 1, 2025

~~May~~August 43, 2024

ASSETS

Current assets:

Cash and cash equivalents

4644,~~025~~937

44,752

4338,~~434~~834

Receivables, net

5655,~~159~~675

50,371

9649,~~712~~671

Inventories

~~623~~610,~~584~~876

599,751

~~620~~642,~~493~~783

Prepaid expenses and other current assets

4740,~~975~~437

39,950

7866,~~224~~760

Total current assets

~~773~~751,~~743~~925

734,824

~~838~~798,~~863~~048

Property and equipment, net

~~230~~227,~~559~~141

208,199

~~223~~216,~~205~~313

Operating lease assets

~~719~~716,~~749~~685

701,621

~~728~~723,~~346~~818

Goodwill

130,~~714~~716

130,386

~~133~~130,~~666~~611

Intangible assets, net

8581,~~062~~881

84,639

8586,~~252~~334

Deferred tax assets

5045,~~801~~067

43,324

4039,~~868~~997

Equity investments

5459,~~862~~446

56,761

6261,~~863~~020

Other assets

4648,~~046~~870

49,470

50,~~540~~993

Total assets

2,~~091~~061,~~536~~731

2,009,224

2,~~163~~107,~~603~~134

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

~~261~~239,~~787~~200

271,524

~~298~~294,~~968~~739

Accrued expenses

~~181~~170,~~207~~333

152,153

~~182~~161,~~767~~155

Current maturities of long-term debt

6,750

Current operating lease liabilities

~~158~~157,~~171~~212

159,924

~~161~~156,~~050~~394

Total current liabilities

~~607~~573,~~915~~495

590,351

~~649~~619,~~535~~038

Long-term debt

~~516~~509,~~192~~593

484,285

~~469~~458,~~328~~974

Non-current operating lease liabilities

~~650~~646,~~438~~431

635,076

~~657~~653,~~625~~416

Other non-current liabilities

4648,~~478~~201

17,737

2516,~~253~~642

Total liabilities

1,~~821~~777,~~023~~720

1,727,449

1,~~801~~748,~~741~~070

Commitments and contingencies

Redeemable noncontrolling interest

3,~~573~~214

3,284

3,~~390~~519

Shareholders' equity:

Common shares paid in-capital, no par value

1,~~049~~055,~~774~~199

1,045,002

1,~~032~~038,~~998~~061

Treasury shares, at cost

(833,~~355~~351)

(833,355)

(~~764~~782,~~802~~771)

Retained earnings

5866,~~074~~493

77,895

96107,~~818~~774

Accumulated other comprehensive loss

(7,~~553~~544)

(11,051)

(67,~~542~~519)

Total shareholders' equity

~~266~~280,~~940~~797

278,491

~~358~~355,~~472~~545

Total liabilities, redeemable noncontrolling interest, and shareholders' equity

2,~~091~~061,~~536~~731

2,009,224

2,~~163~~107,~~603~~134

The accompanying notes are an integral part of the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

	Number of Shares			Amounts
(unaudited and in thousands, except per share amounts)	Class ACommonShares	Class BCommonShares	Treasury Shares	Common Shares Paid in Capital		Treasury Shares		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Three months ended May 3, 2025
Three months ended August 2, 2025
Balance, February 1, 2025	40,211	7,733	52,902	$	1,045,002	$	(833,355)	$	77,895	$	(11,051)	$	278,491
Net loss attributable to Designer Brands Inc.	—	—	—	—		—		(17,424)		—		(17,424)
Stock-based compensation activity	689	—	—	4,772		—		—		—		4,772
Dividends ($0.05 per share)	—	—	—	—		—		(2,397)		—		(2,397)
Foreign currency translation gain	—	—	—	—		—		—		3,498		3,498
Balance, May 3, 2025	40,900	7,733	52,902	$	1,049,774	$	(833,355)	$	58,074	$	(7,553)	$	266,940
Three months ended May 4, 2024
Net income attributable to Designer Brands Inc.	—	—	—	—		—		10,827		—		10,827
Balance, February 3, 2024	49,491	7,733	42,560	$	1,030,765	$	(764,802)	$	98,896	$	(5,639)	$	359,220
Stock-based compensation activity	896	—	—	5,425		—		—		—		5,425
Net income attributable to Designer Brands Inc.	—	—	—	—		—		783		—		783
Dividends ($0.05 per share)	—	—	—	—		—		(2,408)		—		(2,408)
Stock-based compensation activity	569	—	—	2,233		—		—		—		2,233
Foreign currency translation gain	—	—	—	—		—		—		9		9
Dividends ($0.05 per share)	—	—	—	—		—		(2,861)		—		(2,861)
Other	—	—	—	—		4		—		—		4
Foreign currency translation loss	—	—	—	—		—		—		(903)		(903)
Balance, August 2, 2025	41,796	7,733	52,902	$	1,055,199	$	(833,351)	$	66,493	$	(7,544)	$	280,797
Three months ended August 3, 2024
Balance, May 4, 2024	50,060	7,733	42,560	$	1,032,998	$	(764,802)	$	96,818	$	(6,542)	$	358,472
Net income attributable to Designer Brands Inc.	—	—	—	—		—		13,824		—		13,824
Stock-based compensation activity	362	—	—	5,063		—		—		—		5,063
Repurchase of Class A common shares	(2,665)	—	2,665	—		(17,969)		—		—		(17,969)
Dividends ($0.05 per share)	—	—	—	—		—		(2,868)		—		(2,868)
Foreign currency translation loss	—	—	—	—		—		—		(977)		(977)
Balance, August 3, 2024	47,757	7,733	45,225	$	1,038,061	$	(782,771)	$	107,774	$	(7,519)	$	355,545
Six months ended August 2, 2025
Balance, February 1, 2025	40,211	7,733	52,902	$	1,045,002	$	(833,355)	$	77,895	$	(11,051)	$	278,491
Net loss attributable to Designer Brands Inc.	—	—	—	—		—		(6,597)		—		(6,597)
Stock-based compensation activity	1,585	—	—	10,197		—		—		—		10,197
Dividends ($0.10 per share)	—	—	—	—		—		(4,805)		—		(4,805)
Foreign currency translation gain	—	—	—	—		—		—		3,507		3,507
Other	—	—	—	—		4		—		—		4
Balance, August 2, 2025	41,796	7,733	52,902	$	1,055,199	$	(833,351)	$	66,493	$	(7,544)	$	280,797
Six months ended August 3, 2024
Balance, February 3, 2024	49,491	7,733	42,560	$	1,030,765	$	(764,802)	$	98,896	$	(5,639)	$	359,220
Net income attributable to Designer Brands Inc.	—	—	—	—		—		14,607		—		14,607
Stock-based compensation activity	931	—	—	7,296		—		—		—		7,296
Repurchase of Class A common shares	(2,665)	—	2,665	—		(17,969)		—		—		(17,969)
Dividends ($0.10 per share)	—	—	—	—		—		(5,729)		—		(5,729)
Foreign currency translation loss	—	—	—	—		—		—		(1,880)		(1,880)
Balance, August 3, 2024	47,757	7,733	45,225	$	1,038,061	$	(782,771)	$	107,774	$	(7,519)	$	355,545

The accompanying notes are an integral part of the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended
	Six months ended
(unaudited and in thousands)	~~May~~August 32, 2025		~~May~~August 43, 2024
Cash flows from operating activities:
Net income (loss)	$	(175,~~136~~855)	$	~~885~~14,967
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1429,~~796~~664		1632,~~379~~827
Stock-based compensation expense	612,~~103~~063		511,~~554~~419
Deferred income taxes	(71,~~710~~489)		(~~1,848~~999)
Income from equity investments	(25,~~427~~005)		(25,~~864~~435)
Distributions received from equity investments	46,~~326~~935		27,~~859~~272
Impairment charges	24,~~953~~419		—
Other	(~~425~~260)		~~351~~703
Change in operating assets and liabilities, net of acquired amounts:
Accounts receivables	(5,~~696~~223)		(1614,~~999~~663)
Income tax receivable	—		~~(514)~~44,476
Inventories	(218,~~447~~714)		(4365,~~003~~812)
Prepaid expenses and other current assets	(~~6,102~~118)		(5,~~505)~~619
Accounts payable	(731,~~880~~972)		3,~~845~~883
Accrued expenses	2515,~~953~~005		22(7,~~053~~247)
Operating lease assets and liabilities, net	(58,~~674~~373)		(~~873~~5,112)
Net cash used in operating activities	(20,366)		(19,680)
Net cash provided by operating activities	1,077		21,898
Cash flows from investing activities:
Cash paid for property and equipment	(716,~~229~~753)		(1529,~~891~~481)
Cash paid for business acquisitions	—		(16,~~674~~352)
Other	—(1,916)		4,362
Net cash used in investing activities	(718,~~229~~669)		(2841,~~203~~471)
Cash flows from financing activities:
Borrowing on revolving credit facility	~~301~~540,~~338~~011		~~341~~652,~~356~~076
Payments on revolving credit facility	(~~268~~512,~~173~~187)		(~~291~~610,~~131~~866)
Payments for borrowings under Term Loan	(13,~~688~~375)		(13,~~687~~375)
Dividends paid	(2,397)		(2,861)
Cash paid for treasury shares	—		(17,969)
Cash paid for taxes for stock-based compensation shares withheld	(1,331)		(3,321)
Dividends paid	(4,805)		(5,729)
Other	(77)		(33)
Cash paid for taxes for stock-based compensation shares withheld	(1,866)		(4,123)
Net cash provided by financing activities	27,672		42,323
Other	(1,296)		(387)
Effect of exchange rate changes on cash balances	1,196		(179)
Net cash provided by financing activities	16,482		9,627
Net increase (decrease) in cash and cash equivalents	1,273		(5,739)
Effect of exchange rate changes on cash balances	1,295		(393)
Net increase (decrease) in cash and cash equivalents	185		(10,339)
Cash and cash equivalents, beginning of period	44,752		49,173
Cash and cash equivalents, end of period	$	4644,~~025~~937	$	4338,~~434~~834
Supplemental disclosures:
Net cash received for income taxes	$	~~946~~2,660	$	4647,771
Cash paid for interest on debt	$	1121,~~301~~518	$	1020,~~421~~533
Property and equipment purchases not yet paid	$	23,~~096~~534	$	62,~~930~~777
Contribution of intangible asset to equity investment	$	2,700	$	—

The accompanying notes are an integral part of the condensed consolidated financial statements.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1

Description of Business and Significant Accounting Policies

Note 2

Acquisition

Note 3

Revenue

Note 4

Related Party Transactions

1110

Note 5

Earnings (Loss) Per Share

Note 6

Stock-Based Compensation

Note 7

Shareholders' Equity

Note 8

Receivables

Note 9

Property and Leases

Note 10

Accrued Expenses

Note 11

Debt

Note 12

Commitments and Contingencies

Note 13

Segment Reporting

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1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Business Operations- Designer Brands Inc. is one of the world's largest designers, producers, and retailers of footwear and accessories. We operate in three reportable segments: the U.S. Retail segment, the Canada Retail segment, and the Brand Portfolio segment. The U.S. Retail segment operates the DSW Designer Shoe Warehouse ("DSW") banner through its direct-to-consumer stores and e-commerce site in the United States ("U.S."). The Canada Retail segment operates The Shoe Co., DSW, and Rubino banners through its direct-to-consumer stores and e-commerce sites in Canada. The Brand Portfolio segment primarily earns revenue from the wholesale of our branded products to retailers and international distributors and the sale of our Vince Camuto, Keds, and Topo brands through direct-to-consumer e-commerce sites.

Basis of Presentation- The accompanying unaudited, condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The condensed consolidated financial position, results of operations, and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet as of February 1, 2025 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the 2024 Form 10-K.

Fiscal Year- Our fiscal year ends on the Saturday nearest to January 31. References to a fiscal year (e.g., "2025") refer to the calendar year in which the fiscal year begins. This reporting schedule is followed by many national retail companies and typically results in a 52-week fiscal year (including 2025 and 2024), but occasionally will contain an additional week resulting in a 53-week fiscal year.

SIGNIFICANT ACCOUNTING POLICIES

Accounting Policies- The complete summary of significant accounting policies is included in the notes to the consolidated financial statements as presented in our 2024 Form 10-K.

Principles of Consolidation- The condensed consolidated financial statements include the accounts of Designer Brands Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. dollars.

Use of Estimates- The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of net sales and expenses during the reporting periods. Certain estimates and assumptions use forecasted financial information based on information reasonably available to us. Significant estimates and assumptions are required as a part of accounting for customer returns and allowances, gift card breakage income, deferred revenue associated with reward programs, valuation of inventories, depreciation and amortization, impairments of long-lived assets, intangibles, goodwill and investments, lease accounting, redeemable noncontrolling interest, income taxes and valuation allowances on deferred tax assets, and self-insurance reserves. Although we believe that these estimates and assumptions are reasonable, they are based on management's knowledge of current events and actions we may undertake in the future. Changes in facts and circumstances may result in revised estimates and assumptions, and actual results could differ from these estimates.

Severance- During the three months ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, we incurred severance costs of $12.74 million and $1.9 million, respectively. During the six months ended August 2, 2025 and August 3, 2024, we incurred severance costs of $4.1 million and $4.3 million, respectively. These costs are included in operating expenses on the condensed consolidated statements of operations and no amounts were material to any individual reportable segment. As of ~~May~~August 32, 2025, February 1, 2025 and ~~May~~August 43, 2024, we had $12.80 million, $1.3 million and $53.10 million, respectively, of severance liability included in accrued expenses on the condensed consolidated balance sheets.

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Income Taxes- ~~For~~During the three months ended ~~May~~August 32, 2025, we ~~used~~changed ~~the~~our ~~discrete effective tax~~ method toof ~~calculate~~calculating ~~our~~ interim income ~~tax~~taxes ~~benefit.~~from ~~The~~the discrete ~~method~~effective istax ~~used~~method ~~when~~to the ~~application of the estimated~~ annual effective tax rate ismethod. ~~impractical~~This ~~because~~change itwas isapplied ~~not possible~~ to ~~reliably estimate~~ the ~~annual~~six ~~effective~~months ~~tax~~ended ~~rate.~~August ~~The~~2, ~~discrete~~2025 ~~method~~and ~~treats~~was ~~the~~made ~~year-~~to~~-date~~ ~~period~~better asreflect ~~if it was~~ the expected annual ~~period~~tax expense and ~~determines~~improve ~~the~~comparability ~~income~~across ~~tax~~interim ~~expense~~periods. orFor ~~benefit~~the onthree ~~that~~months ~~basis.~~ended WeAugust ~~determined~~2, ~~that~~2025, ~~using~~we used the discrete effective tax method isto ~~more~~calculate ~~appropriate~~our atinterim ~~this~~income ~~time~~tax benefit due to the high degree of uncertainty in estimating annual pretax earnings asat wethat ~~are~~time. ~~unable~~The toimpact ~~predict the severity~~ of ~~macroeconomic~~this ~~uncertainty,~~change ~~whether~~was orimmaterial ~~when~~for ~~such~~the ~~circumstances~~three ~~may~~months ~~improve~~ended orAugust ~~worsen~~2, ~~or the full impact such circumstances could have on our business~~2025.

~~For~~On ~~the~~July ~~three months ended May 3~~4, 2025 ~~and May 4~~, ~~2024,~~new ~~our~~U.S. ~~effective~~ tax ~~rate~~legislation ~~was 10~~H.~~4% and 138~~R.1%, ~~respectively.~~referred ~~The~~to ~~effective~~as ~~tax rate for~~ the ~~three~~One ~~months~~Big ~~ended~~Beautiful ~~May~~Bill 3("OBBB"), ~~2025~~was ~~differed~~signed ~~from~~into ~~the~~law. ~~statutory~~OBBB ~~rate~~contains ~~primarily~~several ~~due~~changes to ~~state~~corporate ~~minimum~~taxation ~~tax~~including ~~expense~~accelerated onfixed ~~quarterly~~asset ~~pre-tax~~depreciation, ~~loss~~limitations ~~and~~on ~~permanent~~deductions ~~non-deductible~~of ~~compensation.~~interest ~~The high effective tax rate for the three months ended May 4~~expense, ~~2024~~and ~~was~~modifications ~~due~~ to ~~discrete~~capitalization ~~tax~~of ~~benefits,~~research ~~primarily~~and ~~state~~development ~~tax~~expenses. ~~planning~~We ~~initiatives~~have ~~and~~determined ~~release~~that ofthe ~~federal~~impact ~~tax~~of ~~reserves~~OBBB noon ~~longer~~our ~~deemed~~estimated ~~necessary,~~2025 ~~that~~annual ~~approximated~~effective ~~the~~tax ~~amount~~rate ofwill ~~loss~~not ~~before~~have ~~income~~a ~~taxes~~material ~~and the~~ impact ofon ~~permanent~~our ~~non-deductible~~financial ~~compensation~~statements.

For the three months ended August 2, 2025 and August 3, 2024, our effective tax rate was 24.0% and 19.3%, respectively, and for the six months ended August 2, 2025 and August 3, 2024, our effective tax rate was negative 36.7% and positive 1.0%, respectively. The effective tax rate for the six months ended August 2, 2025 differed from the statutory rate primarily due to the impact of permanent non-deductible compensation, which resulted in a negative effective tax rate. The effective tax rate for the six months ended August 3, 2024 differed from the statutory rate primarily due to discrete tax benefits recognized, primarily the release of federal tax reserves no longer deemed necessary and state tax planning initiatives, partially offset by the impact of permanent non-deductible compensation.

Equity Investment in Pro-Keds JV- On July 28, 2025, we contributed cash of $1.9 million and the Pro-Keds tradename at a fair value of $2.7 million in exchange for a 45.0% interest in Pro-Keds International S.r.l. ("Pro-Keds JV"), which manages the Pro-Keds brand. We account for our investment in Pro-Keds JV, where we exercise significant influence but do not have control, using the equity method.

Fair Value- Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to the subjectivity associated with the inputs to fair value measurements as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Quoted prices for similar assets or liabilities in active markets or inputs that are observable.

• Level 3 - Unobservable inputs in which little or no market activity exists.

The carrying value of cash and cash equivalents, receivables, and accounts ~~payables~~payable approximated their fair values due to their short-term nature. The carrying value of borrowings under our ABL Revolver and our Term Loan approximated fair value based on the terms and variable interest rates.

Impairments- During the three months ended ~~May~~August 32, 2025, we recorded an impairment ~~charges~~charge to long-lived assets of $1.05 million ~~of long-lived assets~~ due to an underperforming ~~stores~~store in ~~Canada~~the U.S. ~~Also~~During ~~during~~ the ~~three~~six months ended ~~May~~August 32, 2025, we recorded aimpairment charges to long-lived assets of $21.5 million due to an underperforming store in the U.S., $1.0 million ~~impairment~~due ~~charge~~to ~~for~~underperforming stores in Canada, and $2.0 million of an interest in an equity security without a readily determinable fair value held at cost, which resulted in no remaining value due to the lack of liquidity and the deterioration in the business prospects of the investee. There were no impairment charges for the three and six months ended ~~May~~August 43, 2024.

Recently Issued Accounting ~~Pronouncements~~Pronouncement- In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2024-03, Income Statement Expense Disaggregation Disclosures, which requires disaggregated disclosures for specific cost and expense categories such as inventory purchases, employee compensation, depreciation, and amortization, as well as other disclosures. ASU 2024-03 is effective either on a retrospective basis to all prior periods presented or on a prospective basis beginning with our 2027 Annual Report on Form 10-K and subsequent interim periods. We are currently evaluating the impact of adopting ASU 2024-03 to the notes of the consolidated financial statements.

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2. ACQUISITION

On April 8, 2024, we completed the acquisition of Rubino Shoes Inc. ("Rubino"), a retailer of branded footwear, handbags, and accessories that operates Rubino banner stores and an e-commerce site in Quebec, Canada. The acquisition of Rubino has allowed our Canada Retail segment to expand into the province of Quebec. The final purchase price and the allocation of the total consideration to the fair values of the assets and liabilities was finalized as of November 2, 2024, and consisted of the following:


(in thousands)	Final Purchase Price and Allocation
Purchase price cash consideration	$	16,144
Fair value of assets and liabilities acquired:
Inventories	$	7,245
Operating lease assets	9,334
Goodwill	7,067
Intangible assets	5,116
Other assets	2,443
Accounts payable and other current liabilities	(5,727)
Operating lease liabilities	(9,334)
	$	16,144

The fair value of the intangible asset relates to an indefinite-lived tradename and was estimated using the relief from royalty method of the income approach. The fair value measurements are based on significant unobservable inputs, including discounted future cash flows and an assumed royalty rate. The fair value of the operating lease assets was determined based on the market valuation approach. The goodwill, included within the Canada Retail segment, represents the excess of the purchase price over the fair value of the net assets acquired and was primarily attributable to acquiring an established retail banner in a province in Canada we did not previously have a presence in. Goodwill is not deductible for income tax purposes.

3. REVENUE

DISAGGREGATION OF NET SALES

Beginning with the 2024 Form 10-K, we changed the presentation of disaggregation of net sales for all periods presented to include net sales by product and service categories with an athletic footwear category and excluded the previously presented disaggregation of net sales by brand categories. This change aligns with how management ~~of the Company~~ evaluates the net sales performance of our segments.

The following table presents net sales disaggregated by product and service categories for each segment:


	Three months ended				Six months ended
(in thousands)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net sales:
U.S. Retail segment:
Non-athletic footwear:
Women's	$	280,464	$	305,724	$	555,990	$	612,078
Men's	85,269		88,376		156,204		164,174
Kids'	22,343		23,839		43,814		45,525
Athletic footwear	183,343		188,870		358,508		373,395
Accessories and other	39,507		34,885		69,650		67,889
	610,926		641,694		1,184,166		1,263,061

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The following table presents net sales disaggregated by product and service categories for each segment:


	Three months ended				Six months ended
(in thousands)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Canada Retail segment:
Non-athletic footwear:
Women's	31,666		32,160		50,873		52,983
Men's	11,206		11,117		18,715		18,535
Kids'	3,486		3,890		6,449		6,711
Athletic footwear	25,554		24,278		47,618		46,754
Accessories and other	3,165		3,352		5,327		5,326
	75,077		74,797		128,982		130,309
Brand Portfolio segment:
Wholesale	62,211		80,592		146,709		169,262
Direct-to consumer	9,812		13,889		20,167		27,819
Other	1,134		1,512		2,179		3,042
	73,157		95,993		169,055		200,123
Total segment net sales	759,160		812,484		1,482,203		1,593,493
Elimination of intersegment sales	(19,398)		(40,584)		(55,532)		(74,997)
Total net sales	$	739,762	$	771,900	$	1,426,671	$	1,518,496

	Three months ended
(in thousands)		May 3, 2025		May 4, 2024
Net sales:
U.S. Retail segment:
Non-athletic footwear:
Women's		$	275,526	$	306,354
Men's		70,935		75,798
Kids'		21,471		21,686
Athletic footwear		175,165		184,525
Accessories and other		30,143		33,004
		573,240		621,367
Canada Retail segment:
Non-athletic footwear:
Women's		19,207		20,823
Men's		7,509		7,418
Kids'		2,963		2,821
Athletic footwear		22,064		22,476
Accessories and other		2,162		1,974
		53,905		55,512
Brand Portfolio segment:
Wholesale		84,498		88,670
Direct-to consumer		10,355		13,930
Other		1,045		1,530
		95,898		104,130
Total segment net sales		723,043		781,009
Elimination of intersegment sales		(36,134)		(34,413)
Total net sales		$	686,909	$	746,596

DEFERRED REVENUE LIABILITIES

We record deferred revenue liabilities, included in accrued expenses on the condensed consolidated balance sheets, for remaining obligations we have to our customers. The following table presents the changes and total balances for gift cards and reward programs:

	Three months ended		~~Three months ended~~		Six months ended
(in thousands)	August 2, 2025		August 3, 2024		~~May~~August 32, 2025		~~May~~August 43, 2024
Gift cards:
Beginning of period	$	25,829	$	27,811	$	28,963	$	31,662
Gift cards redeemed and breakage recognized to net sales	(14,151)		(14,763)		(1428,~~562~~713)		(1732,~~265~~028)
Gift cards issued	12,490		12,297		1123,~~428~~918		1325,~~414~~711
End of period	$	24,168	$	25,345	$	2524,~~829~~168	$	2725,~~811~~345
Reward programs:
Beginning of period	$	13,894	$	14,948	$	14,126	$	15,971
Reward certificates redeemed and expired and other adjustments recognized to net sales	(7,201)		(8,104)		(613,~~710~~911)		(816,~~190~~294)
Deferred revenue for reward points issued	6,225		7,710		612,~~478~~703		714,~~167~~877
End of period	$	12,918	$	14,554	$	1312,~~894~~918	$	14,~~948~~554

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4. RELATED PARTY TRANSACTIONS

SCHOTTENSTEIN AFFILIATES

We have transactions with entities owned or controlled by Jay L. Schottenstein, the executive chairman of our Board of Directors (the "Board"), and members of his family (the "Schottenstein Affiliates"). As of ~~May~~August 32, 2025, the Schottenstein Affiliates beneficially owned approximately 30% of the Company's outstanding common shares, representing approximately 6766% of the combined voting power, consisting of, in the aggregate, 7.1 million Class A common shares and 7.7 million Class B common shares. ~~The following summarizes the related party transactions with the Schottenstein Affiliates for the relevant periods:~~

Leases- We lease certain store and office locations that are owned by the Schottenstein Affiliates. For the three months ended May 3, 2025 and May 4, 2024, we recorded rent expense from the leases with Schottenstein Affiliates of $1.8 million and $2.0 million, respectively. As of May 3, 2025, February 1, 2025 and May 4, 2024, we had related party current operating lease liabilities of $4.0 million, $4.5 million and $4.0 million, respectively, and non-current operating lease liabilities of $16.5 million, $13.4 million and $18.9 million, respectively. 10

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The following summarizes the related party transactions with the Schottenstein Affiliates for the relevant periods:

Leases- We lease certain store and office locations that are owned by the Schottenstein Affiliates. For the three months ended August 2, 2025 and August 3, 2024, we recorded rent expense from the leases with Schottenstein Affiliates of $1.7 million and $1.6 million, respectively. For the six months ended August 2, 2025 and August 3, 2024, we recorded rent expense from the leases with Schottenstein Affiliates of $3.5 million and $3.6 million, respectively. As of August 2, 2025, February 1, 2025 and August 3, 2024, we had related party current operating lease liabilities of $4.1 million, $4.5 million and $4.0 million, respectively, and non-current operating lease liabilities of $15.4 million, $13.4 million and $18.1 million, respectively.

Other Purchases and Services and Due to Related Parties- Amounts for other purchases and services we incurred from the Schottenstein Affiliates and the amounts due to the Schottenstein Affiliates, other than operating lease liabilities, were immaterial for all periods presented.

ABG-CAMUTO

We have a 40.0% ownership interest in ABG-Camuto, LLC ("ABG-Camuto"). We have a licensing agreement with ABG-Camuto, pursuant to which we pay royalties on the net sales of the brands owned by ABG-Camuto, subject to guaranteed minimums. For both the three months ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, we recorded royalty expense for amounts paid to ABG-Camuto of $4.8 million. For both the six months ended August 2, 2025 and August 3, 2024, we recorded royalty expense for amounts paid to ABG-Camuto of $9.6 million.

5. EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is based on net income (loss) attributable to Designer Brands Inc. and the weighted average of Class A and Class B common shares outstanding. Diluted earnings per share reflects the potential dilution of common shares adjusted for outstanding stock-based compensation awards calculated using the treasury stock method. The dilutive effect of outstanding stock-based compensation awards is applicable only in periods when we have net income attributable to Designer Brands Inc.

The following is a reconciliation between basic and diluted weighted average shares outstanding, as used in the calculation of earnings (loss) per share attributable to Designer Brands Inc.:

Three months ended

~~Three months ended~~

Six months ended

(in thousands)

August 2, 2025

August 3, 2024

~~May~~August 32, 2025

~~May~~August 43, 2024

Weighted average basic shares outstanding

49,109

57,162

48,~~243~~678

57,~~464~~313

Dilutive effect of stock-based compensation awards

625

1,414

—

21,~~006~~665

Weighted average diluted shares outstanding

49,734

58,576

48,~~243~~678

5958,~~470~~978

For the three months ended ~~May~~August 32, 2025 and ~~May~~August 3, 2024, the number of shares relating to potentially dilutive stock-based compensation awards that were excluded from the computation of diluted earnings per share due to their anti-dilutive effect was 8.8 million and 4.1 million, respectively. For the six months ended August 2, 2025 and August 3, 2024, the number of shares relating to potentially dilutive stock-based compensation awards that were excluded from the computation of diluted earnings (loss) per share due to their anti-dilutive effect was 7.5 million and 23.86 million, respectively.

6. STOCK-BASED COMPENSATION

For the three months ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, we recorded stock-based compensation expense of $6.10 million and $5.68 million, respectively. For the six months ended August 2, 2025 and August 3, 2024, we recorded stock-based compensation expense of $12.1 million and $11.4 million, respectively. These costs are included in operating expenses on the condensed consolidated statements of operations.

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The following table summarizes the restricted stock units ("RSU") activity for the ~~three~~six months ended ~~May~~August 32, 2025:

(in thousands)	Shares of Time-Based RSUs	Shares of Performance-Based RSUs
Outstanding - beginning of period	4,743	1,013
Granted	6,~~036~~389	~~856~~880
Vested	(~~795~~1,103)	(~~204~~269)
Forfeited	(~~242~~821)	(497)
Outstanding - end of period	9,~~742~~208	1,~~168~~127

7. SHAREHOLDERS' EQUITY

Our Class A common shares are listed for trading under the ticker symbol "DBI" on the New York Stock Exchange. There is currently no public market for the Company's Class B common shares, but the Class B common shares can be converted into the Company's Class A common shares at the election of the holder on a share-for-share basis. Holders of Class A common shares are entitled to one vote per share and holders of Class B common shares are entitled to eight votes per share on matters submitted to shareholders for approval.

The following table provides additional information for our common shares:

(in thousands)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
	Class A	Class B	Class A	Class B	Class A	Class B
Authorized shares	250,000	100,000	250,000	100,000	250,000	100,000
Issued shares	9394,~~802~~698	7,733	93,113	7,733	92,~~620~~982	7,733
Outstanding shares	4041,~~900~~796	7,733	40,211	7,733	5047,~~060~~757	7,733
Treasury shares	52,902	—	52,902	—	4245,~~560~~225	—

We have authorized 100 million shares of no par value preferred shares, with no shares issued for any of the periods presented.

DIVIDENDS

On May 15, 2025, the Board declared a quarterly cash dividend payment of $0.05 per share for both Class A and Class B common shares. The dividend will be paid on June 18, 2025 to shareholders of record at the close of business on June 5, 2025.

8. RECEIVABLES

Receivables, net, consisted of the following:

(in thousands)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
Customer accounts receivables:
Receivables with payment guarantee by third-party provider	$	2723,~~535~~210	$	25,030	$	3324,~~388~~405
Receivables without payment guarantee	1211,~~554~~849		11,213		710,~~956~~983
Income tax receivable	—		—		44,990
Other receivables	21,462		14,579		14,731
Other receivables	16,955		14,579		10,863
Total receivables	56,521		50,822		50,119
Total receivables	57,044		50,822		97,197
Allowance for credit losses	(846)		(451)		(448)
Allowance for credit losses	(885)		(451)		(485)
	$	55,675	$	50,371	$	49,671
	$	56,159	$	50,371	$	96,712

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9. PROPERTY AND LEASES

During the ~~three~~six months ended ~~May~~August 32, 2025, we commenced operations of a new distribution center, which resulted in an additional operating lease of $22.4 million and additional finance leases for equipment of $3132.85 million.

PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following:

(dollars in thousands)	Useful Life (years)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
Land	Indefinite	$	1,110	$	1,110	$	1,110
Buildings	39	12,485		12,485		12,485
Building and leasehold improvements	3-1020 or the lease term if shorter	~~463~~464,~~456~~606		457,795		~~451~~454,~~358~~508
Furniture, fixtures and equipment	3-15	465,~~541~~549		463,120		~~457~~460,~~866~~374
Software	3-5	~~206~~207,~~160~~677		203,415		~~233~~201,~~674~~369
Finance leased equipment	3-10 or the lease term if shorter	3132,~~782~~482		—		—
Construction-in-progress		611,~~442~~362		11,222		168,~~085~~289
Total property and equipment		1,~~186~~195,~~976~~271		1,149,147		1,~~172~~138,~~578~~135
Accumulated depreciation and amortization		(~~956~~968,~~417~~130)		(940,948)		(~~949~~921,~~373~~822)
		$	~~230~~227,~~559~~141	$	208,199	$	~~223~~216,~~205~~313

LEASES

The following table presents the classification and amounts for operating and finance leases on the condensed consolidated balance sheets:

(in thousands)	Classification	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
Assets:
Operating lease assets	Operating lease assets	$	~~719~~716,~~749~~685	$	701,621	$	~~728~~723,~~346~~818
Finance lease assets	Property and equipment, net	$	31,~~182~~008	$	—	$	—
Liabilities:
Current:
Operating lease liabilities	Current operating lease liabilities	$	~~158~~157,~~171~~212	$	159,924	$	~~161~~156,~~050~~394
Finance lease liabilities	Accrued expenses	$	23,~~923~~199	$	—	$	—
Non-current:
Operating lease liabilities	Non-current operating lease liabilities	$	~~650~~646,~~438~~431	$	635,076	$	~~657~~653,~~625~~416
Finance lease liabilities	Other non-current liabilities	$	28,~~859~~913	$	—	$	—

The following table presents supplemental cash flow information related to leases:

	Three months ended
(in thousands)		May 3, 2025		May 4, 2024
Cash paid for leases liabilities-
Operating cash flows for operating leases		$	54,856	$	49,953
Non-cash activities:
Operating lease liabilities arising from lease asset additions		$	24,665	$	8,525
Finance lease liabilities arising from lease asset additions		$	31,782	$	—
Net increase to operating lease assets and lease liabilities for modifications		$	30,247	$	30,327

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The following table presents supplemental cash flow information related to leases:


	Six months ended
(in thousands)	August 2, 2025		August 3, 2024
Cash paid for lease liabilities:
Operating cash flows for operating leases	$	107,287	$	104,185
Operating cash flows for finance leases	$	463	$	—
Financing cash flows for finance leases	$	370	$	—
Non-cash activities:
Operating lease liabilities arising from lease asset additions	$	36,617	$	10,818
Finance lease liabilities arising from lease asset additions	$	32,482	$	—
Net increase to operating lease assets and lease liabilities for modifications	$	53,788	$	65,435

10. ACCRUED EXPENSES

Accrued expenses consisted of the following:

(in thousands)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
Gift cards	$	2524,~~829~~168	$	28,963	$	2725,~~811~~345
Accrued compensation and related expenses	2620,~~263~~875		16,969		3631,~~645~~579
Accrued taxes	3026,~~601~~989		22,843		2523,~~923~~721
Customer returns and allowances	1917,~~973~~667		18,053		2119,~~521~~247
Reward programs deferred revenue	1312,~~894~~918		14,126		14,~~948~~554
Current finance lease liabilities	2,923		—		—
Other	67,716		51,199		46,709
Other	61,724		51,199		55,919
	$	170,333	$	152,153	$	161,155
	$	181,207	$	152,153	$	182,767

11. DEBT

Debt consisted of the following:

(in thousands)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
ABL Revolver	$	~~403~~397,~~255~~914	$	370,090	$	~~351~~342,~~296~~280
Term Loan	~~124~~123,~~687~~000		126,375		~~131~~129,~~437~~750
Total debt	~~527~~520,~~942~~914		496,465		~~482~~472,~~733~~030
Less unamortized Term Loan debt issuance costs	(54,~~000~~571)		(5,430)		(6,~~655~~306)
Less current maturities of long-term debt	(6,750)		(6,750)		(6,750)
Long-term debt	$	~~516~~509,~~192~~593	$	484,285	$	~~469~~458,~~328~~974

ABL REVOLVER

On March 30, 2022, we replaced our previous senior secured asset-based revolving credit facility with our current ABL Revolver, which was subsequently amended on February 28, 2023 and June 23, 2023. The ABL Revolver provides a revolving line of credit of up to $600.0 million, including a Canadian sub-limit of up to $60.0 million, a $75.0 million sub-limit for the issuance of letters of credit, a $60.0 million sub-limit for swing-loan advances for U.S. borrowings, and a $6.0 million sub-limit for swing-loan advances for Canadian borrowings. In addition, the ABL Revolver includes borrowings of $30.0 million under a first-in last-out term loan ("FILO Term Loan"), which may be repaid in full, but not in part, so long as certain payment conditions are satisfied. Once repaid, no portion of the FILO Term Loan may be reborrowed. Our ABL Revolver matures in March 2027 and is secured by a first-priority lien on substantially all of our personal property assets, including credit card receivables and inventory. The ABL Revolver may be used to provide funds for working capital, capital expenditures, share repurchases, other expenditures, and permitted acquisitions as defined by the credit facility agreement. The amount of credit available is limited to a borrowing base formulated on, among other things, a percentage of the book value of eligible inventory and credit card receivables, as reduced by certain reserves. As of ~~May~~August 32, 2025, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $502.8 million, with $373.3 million in outstanding borrowings and $4.0 million in letters of credit issued, resulting in $125.5 million available for borrowings.

Borrowings under the revolving line of credit and letters of credit issued under the ABL Revolver accrue interest, at our option, at a rate equal to: (A) a base rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate (as defined in the credit facility agreement and subject to a floor of 0%) plus 0.5%, and (iii) Adjusted Term SOFR (as defined in the credit facility agreement) plus 1.0%; or (B) a one-month, three-month, or six-month Adjusted Term SOFR per annum (subject to a floor of 0%), plus, in each instance, an applicable rate to be determined based on average availability. The FILO Term Loan accrues interest, at our option, at a rate equal to: (A) a fluctuating interest rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate plus 0.5%, or (iii) Adjusted Term SOFR plus 1.0%, plus 2.5%; or (B) Adjusted Term SOFR for the interest period in effect for such borrowing plus 3.5%. Commitment fees are based on the unused portion of the ABL Revolver available for borrowings. Interest expense related to the ABL Revolver includes interest on borrowings and letters of credit, with an interest rate of 6.7% as of May 3, 2025, commitment fees, and the amortization of debt issuance costs.

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FILO Term Loan) had a borrowing base of $476.2 million, with $367.9 million in outstanding borrowings and $4.0 million in letters of credit issued, resulting in $104.3 million available for borrowings.

Borrowings under the revolving line of credit and letters of credit issued under the ABL Revolver accrue interest, at our option, at a rate equal to: (A) a base rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate (as defined in the credit facility agreement and subject to a floor of 0%) plus 0.5%, and (iii) Adjusted Term SOFR (as defined in the credit facility agreement) plus 1.0%; or (B) a one-month, three-month, or six-month Adjusted Term SOFR per annum (subject to a floor of 0%), plus, in each instance, an applicable rate to be determined based on average availability. The FILO Term Loan accrues interest, at our option, at a rate equal to: (A) a fluctuating interest rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate plus 0.5%, or (iii) Adjusted Term SOFR plus 1.0%, plus 2.5%; or (B) Adjusted Term SOFR for the interest period in effect for such borrowing plus 3.5%. Commitment fees are based on the unused portion of the ABL Revolver available for borrowings. Interest expense related to the ABL Revolver includes interest on borrowings and letters of credit, with an interest rate of 6.7% as of August 2, 2025, commitment fees, and the amortization of debt issuance costs.

TERM LOAN

On June 23, 2023, we entered into the Term Loan, which matures at the earliest of the date the ABL Revolver matures (currently March 2027) or five years from closing of the Term Loan (June 2028). The Term Loan is collateralized by a first priority lien on substantially all of our personal, real, and intellectual property and by a second priority lien on the assets used as collateral for the ABL revolver, primarily credit card receivables, accounts receivables, and inventory.

Borrowings under the Term Loan bear interest at a per annum rate equal to: (A) an adjusted three-month SOFR per annum (subject to a floor of 2.0%), plus 7.0%; or if (A) is not available, then (B) a base rate per annum equal to the greater of (i) 2.0%, (ii) the prime rate, (iii) the Fed Funds Rate plus 0.5%, and (iv) the Adjusted Term SOFR plus 1.0%; plus, in each instance, 6.0%, with an interest rate of 11.4% (effective interest rate of 12.8% when including the amortization of debt issuance costs) as of ~~May~~August 32, 2025.

DEBT COVENANTS

The ABL Revolver requires us to maintain a fixed charge coverage ratio covenant of not less than 1:1 when availability is less than the greater of $47.3 million or 10.0% of the maximum borrowing amount. At any time that liquidity is less than $100.0 million, the Term Loan requires a maximum consolidated net leverage ratio as of the last day of each fiscal month of 2.50 to 1.00, calculated on a trailing twelve-month basis. Testing of the consolidated net leverage ratio ends after liquidity has been greater than or equal to $100.0 million for a period of 45 consecutive days. The ABL Revolver and the Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes. There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability. The ABL Revolver and the Term Loan contain customary events of default, including failure to comply with certain financial and other covenants. Upon an event of default that is not cured or waived within the cure periods, in addition to other remedies that may be available to the lenders, our obligations may be accelerated, outstanding letters of credit may be required to be cash collateralized, and remedies may be exercised against the collateral. As of ~~May~~August 32, 2025, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

12. COMMITMENTS AND CONTINGENCIES

We are involved in various legal proceedings that are incidental to the conduct of our business. Although it is not possible to predict with certainty the eventual outcome of any litigation, we believe the amount of any potential liability with respect to current legal proceedings will not be material to our results of operations or financial condition. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period. We are also involved in certain legal matters in which we have agreed to settlement terms with the plaintiffs, and such matters are fully covered under our insurance policies and accordingly all associated legal fees and settlement costs will be paid by the insurer. As a result, we have recorded accrued expenses for the estimated settlement obligations with corresponding receivables on the condensed consolidated balance sheets. As additional information becomes available, we will assess any potential ~~liability~~liabilities related to pending litigation and revise the estimates as needed.

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13. SEGMENT REPORTING

Our three reportable segments, which are also operating segments, are the U.S. Retail segment, the Canada Retail segment, and the Brand Portfolio segment. We have determined that the Chief Operating Decision Maker ("CODM") is our Chief Executive Officer.

The following tables provide certain financial data by segment reconciled to the ~~Brand~~condensed ~~Portfolio~~consolidated financial statements (total assets by segment. Weare ~~have~~not ~~determined~~presented ~~that~~in the ~~Chief~~table ~~Operating~~below ~~Decision~~as ~~Maker~~the ("CODM") isdoes ~~our~~not ~~Chief~~evaluate, ~~Executive~~manage, ~~Officer.~~or measure segment performance using total assets):

The following table provides certain financial data by segment reconciled to the condensed consolidated financial statements (total assets by segment are not presented in the table below as the CODM does not evaluate, manage, or measure performance of segments using total assets):


(in thousands)	U.S. Retail		Canada Retail		Brand Portfolio		Total
Three Months Ended August 2, 2025
Net sales:
External customer sales	$	610,926	$	75,077	$	53,759	$	739,762
Intersegment sales	—		—		19,398		19,398
Segment net sales	610,926		75,077		73,157		759,160
Elimination of intersegment net sales							(19,398)
Consolidated net sales							$	739,762
Less segment expenses:
Cost of sales, exclusive of expenses shown below	(346,404)		(40,127)		(54,649)
Store selling expenses	(75,634)		(10,379)		—
Occupancy costs	(66,400)		(9,101)		(913)
Marketing	(30,377)		(1,262)		(3,959)
Distribution and fulfillment costs	(12,602)		(1,368)		(2,817)
Personnel overhead costs	(9,707)		(2,630)		(11,261)
Depreciation and amortization	(8,012)		(1,121)		(1,775)
Other expense items(1)	(1,579)		(591)		(3,967)
Plus income from equity investments	—		—		2,578
Segment operating profit (loss)	$	60,211	$	8,498	$	(3,606)	65,103
Net recognition of intersegment activity							4,953
Corporate shared service costs(2)							(42,007)
Impairment charges(2)							(1,466)
Consolidated operating profit							26,583
Interest expense, net							(11,667)
Non-operating expenses, net							(78)
Income before income taxes							$	14,838
Cash paid for segment property and equipment	$	6,592	$	1,437	$	399	$	8,428

(in thousands)	U.S. Retail		Canada Retail		Brand Portfolio		Total
Three months ended May 3, 2025
Net sales:
External customer sales	$	573,240	$	53,905	$	59,764	$	686,909
Intersegment sales	—		—		36,134		36,134
Segment net sales	573,240		53,905		95,898		723,043
Elimination of intersegment net sales							(36,134)
Consolidated net sales							$	686,909
Less segment expenses:
Cost of sales, exclusive of expenses shown below	(330,444)		(28,501)		(69,227)
Store selling expenses	(74,197)		(9,307)		—
Occupancy costs	(64,710)		(9,002)		(1,196)
Marketing	(33,668)		(1,078)		(3,798)
Distribution and fulfillment costs	(11,070)		(1,231)		(2,979)
Personnel overhead costs	(10,353)		(3,009)		(12,367)
Depreciation and amortization	(7,878)		(1,142)		(1,760)
Other expense items(1)	(1,312)		(270)		(4,407)
Plus income from equity investments	—		—		2,427
Segment operating profit	$	39,608	$	365	$	2,591	42,564
Net recognition of intersegment activity							255
Corporate shared service costs(2)							(47,128)
Impairment charges(2)							(2,953)
Consolidated operating loss							(7,262)
Interest expense, net							(11,868)
Non-operating income, net							8
Loss before income taxes							$	(19,122)
Cash paid for segment property and equipment	$	4,819	$	1,056	$	644	$	6,519

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(in thousands)

U.S. Retail

Canada Retail

Brand Portfolio

Total

Three months ended May 4, 2024

Three months ended August 3, 2024

Net sales:

External customer sales

~~621~~641,~~367~~694

5574,~~512~~797

6955,~~717~~409

~~746~~771,~~596~~900

Intersegment sales

—

3440,~~413~~584

Segment net sales

~~621~~641,~~367~~694

5574,~~512~~797

~~104~~95,~~130~~993

~~781~~812,~~009~~484

Elimination of intersegment net sales

(3440,~~413~~584)

Consolidated net sales

~~746~~771,~~596~~900

Less segment expenses:

Cost of sales, exclusive of expenses shown below

(~~346~~358,~~959~~778)

(2939,~~138~~710)

(7069,~~653~~358)

Store selling expenses

(7778,~~572~~205)

(910,~~099~~354)

—

Occupancy costs

(6566,~~168~~806)

(78,~~893~~716)

(1,~~716~~870)

Marketing

(3529,~~272~~868)

(~~955~~1,449)

(87,~~360~~094)

Distribution and fulfillment costs

(109,~~635~~886)

(1,~~277~~243)

(2,~~591~~836)

Personnel overhead costs

(1211,~~226~~231)

(2,~~814~~725)

(1513,~~735~~285)

Depreciation and amortization

(8,~~059~~086)

(1,~~001~~210)

(1,~~674~~687)

Other expense items(1)

(1,~~275~~261)

(~~167~~338)

(4,~~309~~487)

Plus income from equity investments

—

2,~~864~~571

Segment operating profit

64,201

3,168

1,956

69,325

Segment operating profit (loss)

77,573

9,052

(2,053)

84,572

Net elimination of intersegment activity

(45,~~248~~089)

Corporate shared service costs(2)

(5550,~~695~~894)

Consolidated operating profit

928,~~382~~589

Interest expense, net

(11,~~561~~035)

Non-operating expenses, net

(~~143~~109)

Loss before income taxes

(2,322)

Income before income taxes

17,445

Cash paid for segment property and equipment

56,~~951~~137

2,~~116~~806

~~402~~12

8,~~469~~955

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(in thousands)	U.S. Retail		Canada Retail		Brand Portfolio		Total
Six months ended August 2, 2025
Net sales:
External customer sales	$	1,184,166	$	128,982	$	113,523	$	1,426,671
Intersegment sales	—		—		55,532		55,532
Segment net sales	1,184,166		128,982		169,055		1,482,203
Elimination of intersegment net sales							(55,532)
Consolidated net sales							$	1,426,671
Less segment expenses:
Cost of sales, exclusive of expenses shown below	(676,848)		(68,628)		(123,876)
Store selling expenses	(149,831)		(19,686)		—
Occupancy costs	(131,110)		(18,103)		(2,109)
Marketing	(64,045)		(2,340)		(7,757)
Distribution and fulfillment costs	(23,672)		(2,599)		(5,796)
Personnel overhead costs	(20,060)		(5,639)		(23,628)
Depreciation and amortization	(15,890)		(2,263)		(3,535)
Other expense items(1)	(2,891)		(861)		(8,374)
Plus income from equity investments	—		—		5,005
Segment operating profit (loss)	$	99,819	$	8,863	$	(1,015)	107,667
Net recognition of intersegment activity							5,208
Corporate shared service costs(2)							(89,135)
Impairment charges(2)							(4,419)
Consolidated operating profit							19,321
Interest expense, net							(23,535)
Non-operating expenses, net							(70)
Loss before income taxes							$	(4,284)
Cash paid for segment property and equipment	$	11,411	$	2,493	$	1,043	$	14,947

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(in thousands)	U.S. Retail		Canada Retail		Brand Portfolio		Total
Six months ended August 3, 2024
Net sales:
External customer sales	$	1,263,061	$	130,309	$	125,126	$	1,518,496
Intersegment sales	—		—		74,997		74,997
Segment net sales	1,263,061		130,309		200,123		1,593,493
Elimination of intersegment net sales							(74,997)
Consolidated net sales							$	1,518,496
Less segment expenses:
Cost of sales, exclusive of expenses shown below	(705,737)		(68,848)		(140,011)
Store selling expenses	(155,777)		(19,453)		—
Occupancy costs	(131,974)		(16,609)		(3,586)
Marketing	(65,140)		(2,404)		(15,454)
Distribution and fulfillment costs	(20,521)		(2,520)		(5,427)
Personnel overhead costs	(23,457)		(5,539)		(29,020)
Depreciation and amortization	(16,145)		(2,211)		(3,361)
Other expense items(1)	(2,536)		(505)		(8,796)
Plus income from equity investments	—		—		5,435
Segment operating profit (loss)	$	141,774	$	12,220	$	(97)	153,897
Net elimination of intersegment activity							(9,337)
Corporate shared service costs(2)							(106,589)

Consolidated operating profit							37,971
Interest expense, net							(22,596)
Non-operating expenses, net							(252)
Income before income taxes							$	15,123
Cash paid for segment property and equipment	$	12,088	$	4,922	$	414	$	17,424

(1) Other expense items include professional services fees, payment service fees, supplies, travel, and other administrative segment expenses.

(2) Corporate shared services costs and impairment charges are not attributed to any of our segments. Corporate shared services costs primarily relate to corporate administration, IT, finance, human resources, legal, real estate, and other shared services performing corporate-level activities. We also do not allocate amounts related to restructuring and integration charges (including severance) and acquisition-related costs.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW AND TRENDS IN OUR BUSINESS

For the ~~first~~second quarter of 2025, net sales decreased 84.02% with a decrease in total comparable sales of 75.80% when compared to the same period last year. Gross profit as a percentage of net sales for the ~~first~~second quarter of 2025 was 43.07%, a decrease of ~~120~~30 basis points when compared to the same period last year as margin rates were down for all segments.

EFFECTS OF MACROECONOMIC CONDITIONS AND TARIFFS

Macroeconomic conditions influenced by ~~growing concerns of a potential recession,~~ uncertain tariff policies, volatility in stock market indices, elevated interest rates, persistent inflationary pressures, changes in employment levels, and geopolitical unrest continue to create a complex and challenging retail environment. Consumer spending on discretionary items, including our products, generally declines during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence. These macroeconomic conditions have had a negative impact on our operating results and liquidity during the ~~three~~first ~~months~~half ~~ended~~of ~~May 3,~~ 2025 and we may continue to experience the impact of decreased consumer demand for our products and lower direct-to-consumer traffic. We have enacted certain mitigating actions, including alignment of inventory with current demand levels, expense and capital expenditure reductions, and accelerating sourcing diversification efforts. Although we have made progress in addressing certain macroeconomic conditions, our mitigating actions are not necessarily complete and they should be viewed as part of the process in which we will continue to better align our cost structure with our operating results. We are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, including from one of our quarterly reporting periods to the next, or the full impact such circumstances could have on our business. These factors ultimately could require us to enact further mitigating operating efficiency measures that could have a material adverse effect on our business, results of operations, and liquidity.

Following its January 2025 inauguration, the U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. ~~along~~The ~~with~~numerous ~~additional~~announcements ~~reciprocal~~of ~~tariffs~~changes onto ~~imports from certain countries, including China, Vietnam, Indonesia, India,~~ and ~~Cambodia.~~delays ~~Subsequent~~of totariff ~~these~~policies ~~announcements,~~has ~~the~~introduced ~~U.S.~~heightened ~~administration~~uncertainty ~~announced~~regarding ~~a 90-day pause on~~ the ~~reciprocal~~future ~~tariffs~~of ~~for~~global ~~goods~~trade ~~sourced from certain countries other than China~~ and ~~further~~the ~~increased~~impact ~~tariffs~~to onour ~~goods~~cost ~~sourced from China, which were later paused for a separate 90-day period~~structure. ~~The numerous announcements of new and then paused tariffs introduces more uncertainty regarding the future of global trade.~~ All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia. In addition to the merchandise sourced through our Brand Portfolio segment, our U.S. Retail and Canada Retail segments also source merchandise from domestic third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia. We are closely monitoring this situation and evaluating the actions we ~~plan~~have totaken ~~take,~~and ~~which~~additional actions we may ~~include~~take in the future, including cost mitigation measures and price adjustments. For our Brand Portfolio segment, we have accelerated our sourcing diversification efforts by rebalancing and optimizing where we source from to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in ~~China~~Asia or elsewhere.

Future impacts from macroeconomic conditions and tariffs are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity. Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

FINANCIAL SUMMARY AND OTHER KEY METRICS

For the three months ended ~~May~~August 32, 2025:

•Net sales decreased to $~~686~~739.98 million from $~~746~~771.69 million for the same period last year.

•Gross profit as a percentage of net sales was 43.07% compared to 44.20% for the same period last year.

•Net ~~loss~~income attributable to Designer Brands Inc. was $1710.48 million, or $0.3622 ~~loss~~ per diluted share, which included net after-tax charges of $45.9 million, or $0.1012 per diluted share, primarily related to restructuring, ~~integration,~~costs and impairment ~~costs~~charges. For the three months ended ~~May~~August 43, 2024, net income attributable to Designer Brands Inc. was $013.8 million, or $0.0124 per diluted share, which included net after-tax charges of $43.02 million, or $0.0705 per diluted share, primarily related to restructuring, integration, and ~~integration~~acquisition costs.

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Comparable Sales Performance Metric- The following table presents the percent change in comparable sales for each segment and in total:

	Three months ended
	May 3, 2025		May 4, 2024
	August 2, 2025		August 3, 2024
Change in comparable sales:
U.S. Retail segment	(74.39)	%	(21.31)	%
Canada Retail segment	(90.26)	%	(43.91)	%
Brand Portfolio segment - direct-to-consumer channel	(2729.02)	%	(1.7.0)	%
Total	(75.80)	%	(21.54)	%

We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the U.S. Retail and Canada Retail segments. Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Stores added as a result of the Rubino acquisition that will have been in operation for at least 14 months at the beginning of 2025, along with its e-commerce sales, will be added to the comparable base for the Canada Retail segment beginning with the second quarter of 2025. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.

Number of Stores- As of ~~May~~August 32, 2025 and ~~May~~August 43, 2024, we had the following number of stores:

May 3, 2025

May 4, 2024

August 2, 2025

August 3, 2024

U.S. Retail segment - DSW stores

~~494~~493

~~500~~499

Canada Retail segment:

The Shoe Co. stores

121

~~122~~123

Rubino stores

DSW stores

2526

175

~~175~~177

Total number of stores

~~669~~668

~~675~~676

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RESULTS OF OPERATIONS

~~FIRST~~SECOND QUARTER OF 2025 COMPARED WITH ~~FIRST~~SECOND QUARTER OF 2024

(amounts in thousands, except per share amounts)	Three months ended
	May 3, 2025				May 4, 2024				Change
	August 2, 2025				August 3, 2024				Change
	Amount		% of Net Sales		Amount		% of Net Sales		Amount		%
Net sales	$	~~686~~739,~~909~~762	100.0	%	$	~~746~~771,~~596~~900	100.0	%	$	(5932,~~687~~138)	(84.02)	%
Cost of sales	(~~391~~416,~~783~~829)		(5756.03)		(~~416~~432,~~585~~351)		(5556.80)		2415,~~802~~522		(63.06)	%
Gross profit	~~295~~322,~~126~~933		43.07		~~330~~339,~~011~~549		44.20		(3416,~~885~~616)		(104.69)	%
Operating expenses	(~~301~~297,~~862~~462)		(4340.92)		(~~323~~313,~~493~~531)		(4340.36)		2116,~~631~~069		(65.71)	%
Income from equity investments	2,~~427~~578		0.43		2,~~864~~571		0.53		~~(437)~~7		~~(15~~0.3)	%
Impairment charges	(21,~~953~~466)		(0.62)		—		—		(21,~~953~~466)		NM
Operating profit (loss)	(7,262)		(1.1)		9,382		1.3		(16,644)		NM
Operating profit	26,583		3.6		28,589		3.7		(2,006)		(7.0)	%
Interest expense, net	(11,~~868~~667)		(1.76)		(11,~~561~~035)		(1.65)		(~~307~~632)		25.7	%
Non-operating income (expenses), net	8		—		(143)		—		151		NM
Non-operating expenses, net	(78)		—		(109)		—		31		(28.4)	%
Loss before income taxes	(19,122)		(2.8)		(2,322)		(0.3)		(16,800)		723.5	%
Income before income taxes	14,838		2.0		17,445		2.2		(2,607)		(14.9)	%
Income tax benefit	1,986		0.3		3,207		0.4		(1,221)		(38.1)	%
Income tax provision	(3,557)		(0.5)		(3,363)		(0.4)		(194)		5.8	%
Net income (loss)	(17,136)		(2.5)		885		0.1		(18,021)		NM
Net income	11,281		1.5		14,082		1.8		(2,801)		(19.9)	%
Net income attributable to redeemable noncontrolling interest	(~~288~~454)		—		(~~102~~258)		—		(~~186~~196)		~~182~~76.40	%
Net income (loss) attributable to Designer Brands Inc.	$	(17,424)	(2.5)	%	$	783	0.1	%	$	(18,207)	NM
Net income attributable to Designer Brands Inc.	$	10,827	1.5	%	$	13,824	1.8	%	$	(2,997)	(21.7)	%
Earnings (loss) per share attributable to Designer Brands Inc.:
Earnings per share attributable to Designer Brands Inc.:
Basic earnings (loss) per share	$	(0.36)			$	0.01			$	(0.37)	NM
Basic earnings per share	$	0.22			$	0.24			$	(0.02)	(8.3)	%
Diluted earnings (loss) per share	$	(0.36)			$	0.01			$	(0.37)	NM
Diluted earnings per share	$	0.22			$	0.24			$	(0.02)	(8.3)	%
Weighted average shares used in per share calculations:
Basic shares	4849,~~243~~109				57,~~464~~162				(98,~~221~~053)		(1614.01)	%
Diluted shares	4849,~~243~~734				5958,~~470~~576				(118,~~227~~842)		(1815.91)	%

NM - Not meaningful

20NET SALES

The following table summarizes net sales by segment:


	Three months ended
(dollars in thousands)	August 2, 2025				August 3, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Comparable Sales
Segment net sales:
U.S. Retail	$	610,926	80.5	%	$	641,694	79.0	%	$	(30,768)	(4.8)	%	(4.9)	%
Canada Retail	75,077		9.9		74,797		9.2		280		0.4	%	(0.6)	%
Brand Portfolio	73,157		9.6		95,993		11.8		(22,836)		(23.8)	%	(29.2)	%
Total segment net sales	759,160		100.0	%	812,484		100.0	%	(53,324)		(6.6)	%	(5.0)	%
Elimination of intersegment net sales	(19,398)				(40,584)				21,186		(52.2)	%
Consolidated net sales	$	739,762			$	771,900			$	(32,138)	(4.2)	%

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For the three months ended August 2, 2025, net sales decreased in the U.S. Retail segment primarily driven by a decline in comparable sales, largely driven by lower comparable transactions of approximately 7% due to reduced traffic, partially offset by an increase in comparable average sales amounts per transaction. Net sales also decreased by approximately $6.0 million in the U.S. Retail segment due to net store closures since the end of the second quarter of 2024, offset by a similar amount due to an increase in shipping revenue and other non-product sales activity. Net sales increased slightly in the Canada Retail segment driven by the addition of Rubino, partially offset by the small decline in comparable sales. The decrease in net sales for the Brand Portfolio segment was primarily due to lower revenue from wholesale activity of $22.6 million (excluding Topo wholesale) as retail customers and the U.S. Retail segment pulled back on orders, partially offset by a $4.2 million increase in net sales from strong Topo wholesale activity, with the remainder of the decrease from direct-to-consumer sales, primarily from our Vince Camuto e-commerce site.

GROSS PROFIT

The following table summarizes gross profit by segment:


	Three months ended
(dollars in thousands)	August 2, 2025				August 3, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment gross profit:
U.S. Retail	$	264,522	43.3	%	$	282,916	44.1	%	$	(18,394)	(6.5)	%	(80)
Canada Retail	34,950		46.6	%	35,087		46.9	%	(137)		(0.4)	%	(30)
Brand Portfolio	18,508		25.3	%	26,635		27.7	%	(8,127)		(30.5)	%	(240)
Total segment gross profit	317,980		41.9	%	344,638		42.4	%	(26,658)		(7.7)	%	(50)
Net recognition (elimination) of intersegment gross profit	4,953				(5,089)				10,042
Consolidated gross profit	$	322,933	43.7	%	$	339,549	44.0	%	$	(16,616)	(4.9)	%	(30)

The decrease in gross profit for the U.S. Retail segment was primarily driven by the decrease in net sales during the three months ended August 2, 2025 over the same period last year and at lower margin rates. Gross profit as a percentage of net sales decreased for the U.S. Retail segment when compared to the same period last year primarily due to promotional activity, partially offset by lower shipping expense. The slight decrease in gross profit as a percentage of net sales for the Canada Retail segment was primarily due to the Rubino banner, which has lower margin rates. The decrease in gross profit for the Brand Portfolio segment was primarily due to lower net sales as retail customers pulled back on orders. Gross profit as a percentage of net sales decreased for the Brand Portfolio segment primarily due to the deleverage on lower net sales on mostly fixed royalty expenses.

The net recognition (elimination) of intersegment gross profit consisted of the following:


	Three months ended
(in thousands)	August 2, 2025		August 3, 2024
Intersegment recognition and elimination activity:
Elimination of net sales recognized by Brand Portfolio segment	$	(19,398)	$	(40,584)
Cost of sales:
Elimination of cost of sales recognized by Brand Portfolio segment	13,785		28,174
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period	10,566		7,321
	$	4,953	$	(5,089)

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OPERATING EXPENSES

The following table summarizes operating expenses by segment:


	Three months ended
(dollars in thousands)	August 2, 2025				August 3, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment operating expenses:
U.S. Retail	$	204,311	33.4	%	$	205,343	32.0	%	$	(1,032)	(0.5)	%	140
Canada Retail	26,452		35.2	%	26,035		34.8	%	417		1.6	%	40
Brand Portfolio	24,692		33.8	%	31,259		32.6	%	(6,567)		(21.0)	%	120
Total segment operating expenses	255,455		33.6	%	262,637		32.3	%	(7,182)		(2.7)	%	130
Corporate	42,007				50,894				(8,887)		(17.5)	%
Consolidated operating expenses	$	297,462	40.2	%	$	313,531	40.6	%	$	(16,069)	(5.1)	%	(40)

For the three months ended August 2, 2025, operating expenses decreased in the U.S. Retail segment primarily due to lower store selling expenses and personnel overhead costs of $4.1 million in line with lower net sales, partially offset by an increase in distribution and fulfillment costs with the addition of our new distribution center. Operating expenses as a percentage of net sales increased in the U.S. Retail segment due to the deleverage impact of lower net sales. Operating expenses increased slightly in the Canada Retail segment primarily due to the addition of Rubino. Operating expenses decreased in the Brand Portfolio segment primarily due to a $3.1 million decrease in marketing expenses with the remaining decrease primarily due to lower personnel overhead and other costs, in line with lower sales. Operating expenses as a percentage of net sales in the Brand Portfolio segment increased due to the deleverage impact of lower net sales. Operating expenses decreased for corporate shared services primarily due to lower professional fees.

IMPAIRMENT CHARGES

During the three months ended August 2, 2025, we recorded an impairment charge of $1.5 million due to an underperforming store in the U.S.

OPERATING PROFIT

The following table summarizes operating profit (loss) by segment:


	Three months ended
(dollars in thousands)	August 2, 2025				August 3, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment operating profit (loss):
U.S. Retail	$	60,211	9.9	%	$	77,573	12.1	%	$	(17,362)	(22.4)	%	(220)
Canada Retail	8,498		11.3	%	9,052		12.1	%	(554)		(6.1)	%	(80)
Brand Portfolio	(3,606)		(4.9)	%	(2,053)		(2.1)	%	(1,553)		75.6	%	(280)
Total segment operating profit	65,103		8.6	%	84,572		10.4	%	(19,469)		(23.0)	%	(180)
Corporate/eliminations	(38,520)				(55,983)				17,463		(31.2)	%
Consolidated operating profit	$	26,583	3.6	%	$	28,589	3.7	%	$	(2,006)	(7.0)	%	(10)

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For the three months ended August 2, 2025, operating profit for the U.S. Retail segment decreased due to lower gross profit, slightly offset by lower operating expenses. For the Brand Portfolio segment, the increase in operating loss was due to the decrease in gross profit, partially offset by lower operating expenses. Corporate/eliminations were favorable to consolidated operating profit due to lower corporate operating expenses and favorable intersegment activity, partially offset by higher impairment charges when compared to the same period last year. These factors led to a decrease in consolidated operating profit for the three months ended August 2, 2025 as compared the same period last year.

SIX MONTHS OF 2025 COMPARED WITH SIX MONTHS OF 2024


(amounts in thousands, except per share amounts)	Six months ended
	August 2, 2025				August 3, 2024				Change
	Amount		% of Net Sales		Amount		% of Net Sales		Amount		%
Net sales	$	1,426,671	100.0	%	$	1,518,496	100.0	%	$	(91,825)	(6.0)	%
Cost of sales	(808,612)		(56.7)		(848,936)		(55.9)		40,324		(4.7)	%
Gross profit	618,059		43.3		669,560		44.1		(51,501)		(7.7)	%
Operating expenses	(599,324)		(42.0)		(637,024)		(42.0)		37,700		(5.9)	%
Income from equity investments	5,005		0.4		5,435		0.4		(430)		(7.9)	%
Impairment charges	(4,419)		(0.3)		—		—		(4,419)		NM
Operating profit	19,321		1.4		37,971		2.5		(18,650)		(49.1)	%
Interest expense, net	(23,535)		(1.7)		(22,596)		(1.5)		(939)		4.2	%

Non-operating expenses, net	(70)		—		(252)		—		182		(72.2)	%
Income (loss) before income taxes	(4,284)		(0.3)		15,123		1.0		(19,407)		NM
Income tax provision	(1,571)		(0.1)		(156)		—		(1,415)		907.1	%
Net income (loss)	(5,855)		(0.4)		14,967		1.0		(20,822)		NM
Net income attributable to redeemable noncontrolling interest	(742)		(0.1)		(360)		—		(382)		106.1	%
Net income (loss) attributable to Designer Brands Inc.	$	(6,597)	(0.5)	%	$	14,607	1.0	%	$	(21,204)	NM
Earnings (loss) per share attributable to Designer Brands Inc.:
Basic earnings (loss) per share	$	(0.14)			$	0.25			$	(0.39)	NM
Diluted earnings (loss) per share	$	(0.14)			$	0.25			$	(0.39)	NM
Weighted average shares used in per share calculations:
Basic shares	48,678				57,313				(8,635)		(15.1)	%
Diluted shares	48,678				58,978				(10,300)		(17.5)	%

NM - Not meaningful

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NET SALES

The following table summarizes net sales by segment:

	Three months ended
	Six months ended
(dollars in thousands)	~~May~~August 32, 2025				~~May~~August 43, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Comparable Sales
Segment net sales:
U.S. Retail	$	~~573~~1,~~240~~184,166	79.39	%	$	~~621~~1,~~367~~263,061	79.63	%	$	(4878,~~127~~895)	(76.72)	%	(76.31)	%
Canada Retail	53128,~~905~~982		78.47		55130,~~512~~309		78.12		(1,~~607~~327)		(21.90)	%	(94.24)	%
Brand Portfolio	95169,~~898~~055		1311.34		~~104~~200,~~130~~123		1312.35		(831,~~232~~068)		(715.95)	%	(2728.01)	%
Total segment net sales	~~723~~1,~~043~~482,203		100.0	%	~~781~~1,~~009~~593,493		100.0	%	(57111,~~966~~290)		(7.40)	%	(76.84)	%
Elimination of intersegment net sales	(3655,~~134~~532)				(3474,~~413~~997)				(119,~~721)~~465		5(26.0)	%
Consolidated net sales	$	~~686~~1,~~909~~426,671			$	~~746~~1,~~596~~518,496			$	(5991,~~687~~825)	(86.0)	%

For the ~~three~~six months ended ~~May~~August 32, 2025, net sales decreased in the U.S. Retail segment primarily driven by the ~~decrease~~decline in comparable sales, largely driven by lower comparable transactions of ~~$44.~~approximately 9% ~~million~~due ~~with~~to ~~the~~reduced ~~remaining~~traffic, ~~decrease~~partially ~~primarily~~offset ~~from~~by ~~store~~an ~~closures~~increase ~~since~~in ~~the~~comparable ~~end~~average ofsales ~~the~~amounts ~~first~~per ~~quarter~~transaction. ofNet ~~2024.~~sales ~~The~~also ~~decrease~~decreased inby ~~comparable~~approximately ~~sales~~$10.0 ~~for~~million in the U.S. Retail segment ~~was~~due ~~largely~~to ~~driven~~net bystore aclosures ~~decrease~~since inthe ~~comparable~~end ~~transactions~~ of ~~approximately~~the ~~10%~~second ~~due~~quarter toof ~~lower traffic~~2024, ~~partially~~ offset by a similar amount due to an increase in ~~comparable~~shipping ~~average~~revenue ~~sales~~and ~~amounts~~other ~~per~~non-product ~~transaction~~sales activity. Net sales decreased in the Canada Retail segment driven by ~~the~~a decline in comparable sales of $5.15 million, also due to lower traffic, and the unfavorable impact from foreign currency translation of $2.24 million, partially offset by an increase in net sales with the addition of Rubino. The decrease in net sales for the Brand Portfolio segment was primarily due to lower revenue from wholesale activity of $432.25 million (excluding Topo wholesale) as retail customers and the U.S. Retail segment pulled back on orders, partially offset by a $10.0 million increase in net sales from strong Topo wholesale activity, with the remaining decrease from direct-to-consumer sales, primarily from our Vince Camuto e-commerce site.

GROSS PROFIT

The following table summarizes gross profit by segment:

	Three months ended
	Six months ended
(dollars in thousands)	~~May~~August 32, 2025				~~May~~August 43, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment gross profit:
U.S. Retail	$	~~242~~507,~~796~~318	42.48	%	$	~~274~~557,~~408~~324	44.21	%	$	(3150,~~612~~006)	(119.50)	%	(~~180~~130)
Canada Retail	2560,~~404~~354		4746.18	%	2661,~~374~~461		47.52	%	(~~970~~1,107)		(31.78)	%	(40)
Brand Portfolio	2645,~~671~~179		2726.87	%	3360,~~477~~112		3230.10	%	(614,~~806~~933)		(2024.38)	%	(~~430~~330)
Total segment gross profit	~~294~~612,~~871~~851		4041.83	%	~~334~~678,~~259~~897		42.86	%	(3966,~~388~~046)		(119.87)	%	(~~200~~130)
Net recognition (elimination) of intersegment gross profit	~~255~~5,208				(49,~~248~~337)				414,~~503~~545
Consolidated gross profit	$	~~295~~618,~~126~~059	43.03	%	$	~~330~~669,~~011~~560	44.21	%	$	(3451,~~885~~501)	(107.67)	%	(~~120~~80)

The decrease in gross profit for the U.S. Retail segment was primarily driven by the decrease in net sales during the ~~three~~six months ended ~~May~~August 32, 2025 over the same period last year and at lower margin rates. Gross profit as a percentage of net sales decreased for the U.S. Retail segment when compared to the same period last year primarily due to aan ~~change~~increase in ~~mix~~promotional ofactivity ~~products sold~~ and ana ~~increase~~change in ~~promotional~~mix ~~activity~~of products sold. The decrease in gross profit for the Canada Retail segment was primarily driven by the ~~decline~~decrease in net sales ~~from~~during ~~our~~the ~~legacy~~six ~~banners~~months ~~more~~ended ~~than~~August ~~offsetting~~2, 2025 over the ~~contribution~~same ~~from~~period ~~the~~last ~~addition~~year ofand ~~the~~at ~~Rubino~~lower ~~banner~~margin rates. Gross profit as a percentage of net sales decreased for the Canada Retail segment for the ~~three~~six months ended ~~May~~August 32, 2025 over the same period last year primarily due to the Rubino banner, which has lower ~~margins~~margin rates. The decrease in gross ~~profit for the Brand Portfolio segment was primarily due to the lower net sales and higher freight costs as we rerouted supply chain lanes in~~

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~~order~~profit for the Brand Portfolio segment was primarily due to ~~avoid~~lower ~~potential~~sales ~~disruptions~~to customers as retail customers pulled back on orders. Gross profit as a percentage of net sales decreased for the Brand Portfolio segment primarily due to unfavorable customer mix and the ~~higher~~deleverage ~~freight~~of ~~costs~~fixed royalty expenses on lower net sales.

The net recognition (elimination) of intersegment gross profit consisted of the following:

	Three months ended
	Six months ended
(in thousands)	~~May~~August 32, 2025		~~May~~August 43, 2024
Intersegment recognition and elimination activity:
Elimination of net sales recognized by Brand Portfolio segment	$	(3655,~~134~~532)	$	(3474,~~413~~997)
Cost of sales:
Elimination of cost of sales recognized by Brand Portfolio segment	2539,~~814~~599		2452,~~093~~267
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period	1021,~~575~~141		613,~~072~~393
	$	~~255~~5,208	$	(49,~~248~~337)

OPERATING EXPENSES

The following table summarizes operating expenses by segment:

	Three months ended
	Six months ended
(dollars in thousands)	~~May~~August 32, 2025				~~May~~August 43, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment operating expenses:
U.S. Retail	$	~~203~~407,~~188~~499	3534.4	%	$	~~210~~415,~~207~~550	3332.89	%	$	(78,~~019~~051)	(31.39)	%	~~160~~150
Canada Retail	2551,~~039~~491		4639.59	%	2349,~~206~~241		4137.8	%	12,~~833~~250		74.96	%	~~470~~210
Brand Portfolio	2651,~~507~~199		2730.63	%	3465,~~385~~644		3332.08	%	(714,~~878~~445)		(22.90)	%	(~~540~~250)
Total segment operating expenses	~~254~~510,~~734~~189		3534.24	%	~~267~~530,~~798~~435		3433.3	%	(1320,~~064~~246)		(43.98)	%	90110
Corporate	4789,~~128~~135				55106,~~695~~589				(817,~~567~~454)		(1516.4)	%
Consolidated operating expenses	$	~~301~~599,~~862~~324	4342.90	%	$	~~323~~637,~~493~~024	4342.30	%	$	(2137,~~631~~700)	(65.79)	%	60—

For the ~~three~~six months ended ~~May~~August 32, 2025, operating expenses decreased in the U.S. Retail segment primarily due to lower store selling expenses ~~of $3.4 million~~ and ~~marketing~~personnel ~~expenses~~overhead costs of $19.63 million in line with lower net sales, ~~with~~partially ~~the~~offset ~~remaining~~by ~~decrease~~an ~~primarily~~increase in ~~personnel~~distribution ~~overhead~~and fulfillment costs ~~driven~~with bythe aaddition ~~decrease~~of inour ~~incentive~~new ~~compensation~~distribution center. Operating expenses as a percentage of net sales increased in the U.S. Retail segment due to the deleverage impact of lower net sales. Operating expenses increased in the Canada Retail segment primarily due to the addition of Rubino. Operating expenses as a percentage of net sales in the Canada Retail segment increased due to lower net sales on higher operating expenses. Operating expenses decreased in the Brand Portfolio segment primarily due to a $47.67 million decrease in marketing expenses ~~in line~~ with ~~lower net sales with~~ the remaining decrease primarily due to lower personnel overhead ~~costs~~and ~~with~~other acosts, ~~decrease~~ in ~~incentive~~line ~~compensation~~with lower sales. Operating expenses as a percentage of net sales decreased in the Brand Portfolio segment ~~decreased~~ as the decline in operating expenses leveraged even with lower net sales. Operating expenses decreased for corporate shared services primarily due to lower professional fees as well as a decrease in incentive compensation. ~~The increase in consolidated operating expenses as a percentage of consolidated net sales over the same period last year was due to the deleverage of our costs on lower net sales.~~

IMPAIRMENT CHARGES

During the ~~three~~six months ended ~~May~~August 32, 2025, we recorded impairment charges to long-lived assets of $1.05 million ofdue ~~long-lived~~to ~~assets~~an underperforming store in the U.S. and $1.0 million due to underperforming stores in Canada. Also during the ~~three~~six months ended ~~May~~August 32, 2025, we recorded a $2.0 million impairment charge for an interest in an equity security without a readily determinable fair value held at cost, which resulted in no remaining value due to the lack of liquidity and the deterioration in the business prospects of the investee. There were no impairment charges for the same period last year.

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OPERATING PROFIT

The following table summarizes operating profit (loss) by segment:

	Three months ended
	Six months ended
(dollars in thousands)	~~May~~August 32, 2025				~~May~~August 43, 2024				Change
	Amount		% of Segment Net Sales		Amount		% of Segment Net Sales		Amount		%		Basis Points
Segment operating profit:
Segment operating profit (loss):
U.S. Retail	$	3999,~~608~~819	68.94	%	$	64141,~~201~~774	1011.32	%	$	(2441,~~593~~955)	(3829.36)	%	(~~340~~280)
Canada Retail	~~365~~8,863		06.79	%	312,~~168~~220		59.74	%	(23,~~803~~357)		(8827.5)	%	(~~500~~250)
Brand Portfolio	2(1,~~591~~015)		2(0.76)	%	~~1,956~~(97)		~~1.9~~—	%	~~635~~(918)		32946.54	%	80(60)
Total segment operating profit	42107,~~564~~667		57.93	%	69153,~~325~~897		8.9.7	%	(2646,~~761~~230)		(3830.60)	%	(~~300~~240)
Corporate/eliminations	(4988,~~826~~346)				(59115,~~943~~926)				1027,~~117~~580		(1623.98)	%
Consolidated operating profit (loss)	$	(7,262)	(1.1)	%	$	9,382	1.3	%	$	(16,644)	NM		NM
Consolidated operating profit	$	19,321	1.4	%	$	37,971	2.5	%	$	(18,650)	(49.1)	%	(110)

NMFor -the ~~Not~~six ~~meaningful~~months ended August 2, 2025, operating profit for the U.S. Retail segment decreased due to lower gross profit partially offset by lower operating expenses, whereas operating profit for the Canada Retail segment decreased due to lower gross profit and higher operating expenses. Corporate/eliminations were favorable to consolidated operating profit due to lower corporate operating expenses and favorable intersegment activity, partially offset by higher impairment charges when compared to the same period last year. These factors led to a decrease in consolidated operating profit for the six months ended August 2, 2025 as compared to the same period last year.

For the three months ended May 3, 2025, operating profit for the U.S. Retail segment decreased due to lower gross profit partially offset by lower operating expenses whereas operating profit for the Canada Retail segment decreased due to lower gross profit and higher operating expenses. Operating profit for the Brand Portfolio segment increased due to the decrease in gross profit being more than offset by lower operating expenses. For the three months ended May 3, 2025, corporate/eliminations were favorable to consolidated operating profit (loss) due to lower corporate operating expenses and favorable intersegment activity, partially offset by higher impairment charges when compared to the same period last year. These factors led to a consolidated operating loss for the three months ended May 3, 2025 as compared to an operating profit for the same period last year.

INCOME TAXES

For the ~~three~~six months ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, our effective tax rate was 10negative 36.47% and ~~138.~~positive 1.0%, respectively. The effective tax rate for the ~~three~~six months ended ~~May~~August 32, 2025 differed from the statutory rate primarily due to ~~state~~the ~~minimum~~impact ~~tax~~of ~~expense~~permanent onnon-deductible ~~quarterly~~compensation, ~~pre-tax~~which ~~loss~~resulted ~~and~~in ~~permanent~~a ~~non-deductible~~negative ~~compensation~~effective tax rate. The ~~high~~ effective tax rate for the ~~three~~six months ended ~~May~~August 43, 2024 ~~was~~differed from the statutory rate primarily due to discrete tax benefits recognized, primarily ~~state~~the ~~tax planning initiatives and~~ release of ~~federal~~ tax reserves no longer deemed necessary, ~~that~~and ~~approximated~~state ~~the~~tax ~~amount~~planning ofinitiatives, ~~loss~~partially ~~before~~offset ~~income~~by ~~taxes and~~ the impact of permanent non-deductible compensation.

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

Our primary ongoing operating cash flow requirements are for inventory purchases, payments on lease obligations and licensing royalty commitments, other working capital needs, capital expenditures, and debt service. Our working capital and inventory levels fluctuate seasonally. We are committed to a cash management strategy that maintains liquidity to adequately support the operation of the business, pursue our growth strategy, and withstand unanticipated business volatility, including the impacts of the current macroeconomic conditions on our results of operations. We believe that cash generated from our operations, together with our current levels of cash, as well as the availability under our ABL Revolver, are sufficient to maintain our ongoing operations, support seasonal working capital requirements, fund capital expenditures, and meet our debt service obligations over the next 12 months and beyond. As discussed above in the "Executive Overview and Trends in Our Business" section under the heading "Effects of Macroeconomic Conditions and Tariffs," current macroeconomic conditions have had a negative impact on our operating results and liquidity during the ~~three~~first ~~months~~half ~~ended~~of ~~May 3,~~ 2025 and we may continue to experience the impact of decreased consumer demand for our products. Future impacts are unknown at this time and could have a material adverse effect on our business, operations, results of operations, and liquidity.

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The following table presents the key categories of our condensed consolidated statements of cash flows:

Three months ended

Six months ended

(in thousands)

~~May~~August 32, 2025

~~May~~August 43, 2024

Change

Net cash used in operating activities

(20,366)

(19,680)

(686)

Net cash provided by operating activities

1,077

21,898

(20,821)

Net cash used in investing activities

(718,~~229~~669)

(2841,~~203~~471)

2022,~~974~~802

Net cash provided by financing activities

2716,~~672~~482

429,~~323~~627

~~(14~~6,~~651)~~855

Effect of exchange rate changes on cash balances

1,~~196~~295

(~~179~~393)

1,~~375~~688

Net increase (decrease) in cash and cash equivalents

~~1,273~~185

(510,~~739~~339)

710,~~012~~524

OPERATING CASH FLOWS

The ~~slight~~decrease ~~increase~~ in net cash ~~used~~provided inby operating activities was due to the net loss recognized induring the ~~three~~six months ended ~~May~~August 32, 2025 as compared to the net income recognized induring the same period last year and the receipt of income tax refunds of over $40.0 million during the six months ended August 3, 2024, partially offset by improved working capital management as we adjusted inventories in line with the decline in operating results ~~and the impact of adjusting for noncash charges included in net income (loss) for both years~~.

INVESTING CASH FLOWS

The decrease in net cash used in investing activities for the ~~three~~six months ended ~~May~~August 32, 2025 as compared to the same period last year was primarily due to the reduction in capital expenditures of $812.7 million in line with the decline in operating results along with the impact of the acquisition of Rubino of over $16.0 million during the ~~three~~six months ended ~~May~~August 43, 2024.

FINANCING CASH FLOWS

For the ~~three~~six months ended ~~May~~August 32, 2025, net cash provided by financing activities ~~was~~increased ~~primarily~~ due to the ~~net~~repurchase ~~receipts~~ of ~~$33.~~2 ~~million from our ABL Revolver, partially offset by the payment of dividends of $2~~.~~4 million, principal payments on the Term Loan of $1.~~7 million, ~~and~~Class ~~taxes~~A ~~for~~common ~~stock-based~~shares ~~compensation~~at ~~shares~~an ~~withheld~~aggregate cost of $118.30 million. ~~For~~during the ~~three~~six months ended ~~May~~August 43, 2024, ~~net~~partially ~~cash~~offset ~~provided~~ by ~~financing~~a ~~activities~~decrease ~~was~~in ~~primarily due to the~~ net ~~receipts~~borrowings ~~of $50.2 million~~ from our ABL Revolver, ~~which was primarily used to fund our working capital investments and the acquisition~~ of ~~Rubino,~~approximately ~~partially offset by payments for taxes for stock-based compensation shares withheld of~~ $313.30 million, ~~dividends~~when ofcompared ~~$2.9~~to ~~million, and principal payments on~~ the ~~Term~~same ~~Loan~~period oflast $1year.~~7 million.~~

DEBT

ABL Revolver- The ABL Revolver provides a revolving line of credit of up to $600.0 million, including a Canadian sub-limit of up to $60.0 million, a $75.0 million sub-limit for the issuance of letters of credit, a $60.0 million sub-limit for swing-loan advances for U.S. borrowings, and a $6.0 million sub-limit for swing-loan advances for Canadian borrowings. In addition, the ABL Revolver includes borrowings of $30.0 million under a FILO Term Loan, which may be repaid in full, but not in part, so long as certain payment conditions are satisfied. Once repaid, no portion of the FILO Term Loan may be reborrowed. The ABL Revolver, which matures in 2027, may be used to provide funds for working capital, capital expenditures, share repurchases, other expenditures, and permitted acquisitions as defined by the credit facility agreement. The amount of credit available is limited to a borrowing base formulated on, among other things, a percentage of the book value of eligible inventory and credit card receivables, as reduced by certain reserves. As of ~~May~~August 32, 2025, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $~~502~~476.82 million, with $~~373~~367.39 million in outstanding borrowings and $4.0 million in letters of credit issued, resulting in $~~125~~104.53 million available for borrowings.

Term Loan- On June 23, 2023, we entered into a Term Loan, which matures at the earliest of the date the ABL Revolver matures (currently March 2027) or five years from closing of the Term Loan (June 2028). As of ~~May~~August 32, 2025, the Term Loan had an outstanding balance of $~~124~~123.70 million.

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Debt Covenants- The ABL Revolver requires us to maintain a fixed charge coverage ratio covenant of not less than 1:1 when availability is less than the greater of $47.3 million or 10.0% of the maximum borrowing amount. At any time that liquidity is less than $100.0 million, the Term Loan requires a maximum consolidated net leverage ratio as of the last day of each fiscal month of 2.50 to 1.00, calculated on a trailing twelve-month basis. Testing of the consolidated net leverage ratio ends after liquidity has been greater than or equal to $100.0 million for a period of 45 consecutive days. The ABL Revolver and the Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes. There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability. As of ~~May~~August 32, 2025, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

Refer to Note 11, Debt, of the condensed consolidated financial statements of this Form 10-Q for further information about our debt arrangements.

PLANS FOR CAPITALIZED COSTS

During 2025, we expect to spend approximately $35.0 million to $45.0 million that will be capitalized for property and equipment and implementation costs for cloud computing arrangements accounted for as service contracts, $921.65 million of which was spent during the ~~three~~six months ended ~~May~~August 32, 2025. Our future investments will depend primarily on the number of stores we open and remodel, infrastructure and IT projects that we undertake, and the timing of these expenditures.

RECENT ACCOUNTING ~~PRONOUNCEMENTS~~PRONOUNCEMENT

The information related to a recent accounting ~~pronouncements~~pronouncement as set forth in Note 1, Description of Business and Significant Accounting Policies - Recently Issued Accounting ~~Pronouncements~~Pronouncement, of the condensed consolidated financial statements included in this Form 10-Q is incorporated herein by reference.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. We base these estimates and judgments on factors we believe to be relevant, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial and valuation techniques. We constantly re-evaluate these significant factors and make adjustments where facts and circumstances dictate. While we believe that the factors considered provide a meaningful basis for the accounting policies applied in the preparation of the condensed consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. As the determination of these estimates requires the exercise of judgment, actual results may differ from those estimates, and such differences may be material to our condensed consolidated financial statements. Except as noted below, there have been no material changes to the application of critical accounting policies and estimates disclosed in our 2024 Form 10-K.

Impairment of Goodwill and Other Indefinite-Lived Intangible Assets- In 2024, we performed a quantitative impairment test for the goodwill assigned to the U.S. Retail, Keds, Rubino, and Topo reporting units as of our fourth quarter measurement date. We determined for each of the reporting units that the fair value was in excess of their carrying value and a 10% decrease in fair value would not result in an impairment. Also in 2024, we performed a quantitative impairment test of our indefinite-lived tradenames for Keds, The Shoe Co., and Rubino as of our fourth quarter measurement date. We determined that the fair value of each of the indefinite-lived tradenames was in excess of the carrying value and a 10% decrease in fair value would not result in an impairment charge. Due to the current macroeconomic conditions with the continued softness in consumer demand, growing concerns of a potential recession, the evolving trade policies and volatility in our stock price, there is a higher level of uncertainty associated with the assumptions used in our impairment tests. Although we do not believe it is more likely than not that we have an impairment of goodwill or other indefinite-lived tradenames as of ~~May~~August 32, 2025, we will continue to monitor these macroeconomic conditions, including the potential impacts from new tariffs or trade restrictions, which could adversely affect the financial performance and valuation of our reporting units and indefinite-lived intangible tradename assets. Should these conditions lead to a significant decline in projected financial results, there could be material impairment charges related to these assets in future periods.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have market risk exposure related to interest rates and foreign currency exchange rates. There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our 2024 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in ~~Rules~~Rule 13a-15(e) ~~and 15d-15(e)~~ under the Securities Exchange Act of 1934, as amended ("Exchange Act")). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this Form 10-Q, that such disclosure controls and procedures were effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No change was made in our internal control over financial reporting, as such term is defined in Exchange Act ~~Rules~~Rule 13a-15(f) ~~and 15d -15(e)~~, during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 12, Commitments and Contingencies, of the condensed consolidated financial statements of this Form 10-Q is incorporated herein by reference.


ITEM 1A. RISK FACTORS

Except as noted below, there have been no material changes to the risk factors as set forth in Part I, Item 1A., Risk Factors, in our 2024 Form 10-K.

Recently announced changes to U.S. trade policy, including recently announced tariffs, could have a material adverse effect on our business, results of operations, and liquidity.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

SHARE REPURCHASE PROGRAM

On August 17, 2017, the Board authorized the repurchase of an additional $500.0 million of Class A common shares under our share repurchase program, which was added to the $33.5 million remaining from the previous authorization, with $19.7 million of Class A common shares that remain authorized for repurchase under the program as of ~~May~~August 32, 2025. The share repurchase program may be suspended, modified, or discontinued at any time, and we have no obligation to repurchase any amount of our Class A common shares under the program. Under this share repurchase program, shares will be repurchased in the open market at times and in amounts considered appropriate based on price and market conditions. During the ~~three~~six months ended ~~May~~August 32, 2025, no Class A common shares were repurchased.

DIVIDENDS

The payment of any future dividends is at the discretion of our Board and is based on our future earnings, cash flow, financial condition, capital requirements, changes in taxation laws, general economic condition and any other relevant factors. OnIt ~~May 15,~~is 2025, the Board declared a quarterly cash dividend payment of $0.05 per share for both Class A and Class B common shares. The dividend will be paid on June 18, 2025 to shareholders of record at the close of business on June 5, 2025.

anticipated that dividends will continue to be declared on a quarterly basis.

RESTRICTIONS

The ABL Revolver and the Term Loan contain customary covenants restricting our activities, including limitations on the ability to pay dividends or repurchase stock. There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5. OTHER INFORMATION

RULE 10B5-1 TRADING PLANS

During the three months ended ~~May~~August 32, 2025, none of our directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K).

27AMENDMENT TO NONQUALIFIED DEFERRED COMPENSATION PLAN

On September 4, 2025, the Board approved an Amendment (the "Plan Amendment") to the Designer Brands Inc. (f/k/a DSW Inc.) Nonqualified Deferred Compensation Plan, as amended and restated effective December 1, 2023 (the "Plan"). The Plan Amendment suspends the Plan so that no new deferrals will be accepted under the Plan, effective for Plan Years (as defined in the Plan) commencing after 2025 and continuing indefinitely (unless and until otherwise determined by the Plan Administrator, as defined in the Plan). A copy of the Plan Amendment is filed as Exhibit 10.1 to this Form 10-Q, and this description is qualified in its entirety by reference to the full text of the exhibit.

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ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Date of Filing

Exhibit Number

10.1#*

Amendment dated as of September 4, 2025 to the Nonqualified Deferred Compensation Plan (as Amended and Restated).

31.1*

Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer.

31.2*

Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Officer.

32.1**

Section 1350 Certification - Principal Executive Officer.

32.2**

Section 1350 Certification - Principal Financial Officer.

101*

The following materials from the Designer Brands Inc. Quarterly Report on Form 10-Q for the quarter ended ~~May~~August 32, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Shareholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to the Condensed Consolidated Financial Statements.

104*

Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

* Filed herewith

** Furnished herewith

28# Management contract or compensatory plan or arrangement

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DESIGNER BRANDS INC.

Date:

~~June~~September 109, 2025

By:

/s/ Jared A. Poff

Jared A. Poff

Executive Vice President, Chief Financial Officer and Chief Administrative Officer

(Principal Financial Officer and duly authorized officer)

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