Designer Brands, formerly known as DSW, (DBI) will report Q1 earnings tomorrow before the market opens (7:00 AM ET last quarter) with a conference call to follow at 8:30 AM ET.

Current Cap IQ consensus estimates Q1 EPS of $0.42 (vs $0.39 in 2018) on revs of $875 mln (+23% Y/Y) with comps +2.2%

  • DBI may update FY 19 guidance which currently calls for EPS of $1.80-1.90 on revs up low double digits.

    • Current Cap IQ Consensus estimates FY 19 EPS of $1.86 (vs $1.66 last year) on revs +12.5% to $3.58 bln

  • Last quarter, DBI missed on EPS, reported revs in-line, and provided downside FY 19 guidance. Comps +5.4% vs 5.2% estimate

    • The company also announced the new name and introduced 3-year financial targets: EPS of $2.65-2.75 on 13% annual compound growth rate by 2021, low-single digit comps

New Company direction (4 key initiatives):

  • Shoe Company gives them access to the Canadian market and ability to fill in around DSWs

  • DSW digital capabilities will be applied to Shoe Company and Camuto

  • Expand wholesale business that Camuto has been operating across DSW

    Build private brands

TECHS:

DBI has a $1.4 bln market cap and trades at a forward PE of 12x vs competitors TLRD (4.1 4.1x), KSS (11x), M (7.6x), and BURL (23x)

Short interest sits at ~10% of its ~64 mln float

TRADE: DBI JUN21 17.5P