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Why Designer Brands Shares Are Tumbling Today

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

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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. 

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