Please ensure Javascript is enabled for purposes of website accessibility

Why Designer Brands Stock Jumped Today

By Jeremy Bowman - Mar 4, 2020 at 5:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the DSW parent surged along with the broader market rally.

What happened

Shares of Designer Brands (DBI -2.45%) gained today though there was no direct news out on the footwear chain formerly known as DSW. Rather, the stock seemed to benefit from the broad-market gains that sent the S&P 500 up 4.2%.

Designer Brands closed the session with gains of 11.8%.

So what

What sent the market rallying today was Vice President Joe Biden's strong performance in the Super Tuesday Democratic electoral contests last night, which cooled off fears among some investors that Bernie Sanders would be the next president, and that Congress approved an $8 billion package to help fight the spread of the coronavirus. 

Like other retailers, Designer Brands is highly dependent on China for sourcing and manufacturing and says that a majority of its merchandise manufactured in China. 

There are signs that manufacturing in China is starting to pick up again as the number of people currently infected with the disease in China has fallen, and Apple has said factories are starting to reopen. 

Notably, the SPDR S&P Retail ETF (XRT 0.98%), a benchmark for the retail sector, only gained 2.5% today, so there may be another reason for Designer Brands' jump today.

Now what

Before today's jump, the stock had fallen nearly 20% during the coronavirus sell-off, indicating the stock has been more sensitive to the news than the broad market or even the retail sector as a whole.

Last night, the shoe retailer also announced that it would report fourth-quarter earnings on March 17. Analysts are expecting revenue to slip 0.2% to $841.6 million, and for its loss per share to narrow slightly from $0.07 to $0.06. The report will give the company a chance to recover some of its recent losses, as well as an opportunity for management to update investors on how it's handling the coronavirus situation.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Designer Brands Inc. Stock Quote
Designer Brands Inc.
DBI
$12.74 (-2.45%) $0.32
SPDR Series Trust - SPDR S&P Retail ETF Stock Quote
SPDR Series Trust - SPDR S&P Retail ETF
XRT
$58.73 (0.98%) $0.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.