Please ensure Javascript is enabled for purposes of website accessibility

Why Designer Brands Shares Are Tumbling Today

By John Rosevear - Mar 12, 2020 at 11:48AM

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

What if the virus keeps customers out of stores for a while?

What happened

Shares of shoe retailer Designer Brands (DBI -0.96%) were down sharply on Thursday morning, as growing fears of a virus pandemic's effects on business drove a broad-based market sell-off.

As of 11:30 a.m. EDT, Designer Brands shares were down 15.5% from Wednesday's closing price.

So what

Designer Brands is the parent company of the DSW Shoe Warehouse retail chain. It also owns brand designer Camuto Group, which it acquired in 2018 with the goal of bringing some shoe design and production capabilities in-house. 

A woman checks out a row of sneakers in a shoe store.

Image source: Getty Images.

Why are the shares down today? The story isn't complicated: DSW has an online storefront, but the bulk of its sales come from its chain of brick-and-mortar stores. For investors, that's the problem right now: There are growing fears that the COVID-19 pandemic will lead to measures intended to keep people at home for several weeks. Such measures would be a severe blow for any business dependent on foot traffic, and Designer Brands is no exception. 

Now what

Investors won't have to wait too long for an update. Designer Brands is scheduled to release its fourth-quarter and fiscal year 2019 earnings next Tuesday, March 17. I expect we'll get more-detailed guidance for the months ahead during the earnings call on Tuesday morning. 

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
$14.46 (-0.96%) $0.14

*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
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

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.