Shares of Designer Brands (DBI 6.96%) plunged as much as 10% today after the company reported third-quarter earnings. Revenue declined but narrowly beat expectations, and the shoe specialist warned of continued uncertainty ahead. As of 12:45 p.m. EST, the stock was down 7%.
Revenue in the third quarter fell by 30% to $652.9 million, slightly ahead of the $651.8 million in sales that Wall Street was modeling for. That resulted in an adjusted net loss per share of $0.26, which was better than the $0.41 per share in red ink that analysts were expecting. The shoe retailer said comparable sales fell by 30.4% due to the ongoing COVID-19 pandemic.
"As [customers] continue to work from home and avoid large social events, the balance of our assortment will remain challenged," CEO Roger Rawlins said in a statement. "We are pleased to see that a vaccine may be on the horizon, but widespread adoption will take time and our business will continue to feel pressure in the near-term."
Profitability also took a hit because Designer Brands had to aggressively mark down prices in an effort to clear out inventory. The company also lost operating leverage of fixed costs such as rent and royalty expenses. Designer Brands has been shifting its assortment toward athletic shoes, as that category is one of the few bright spots. Athletic comps in the U.S. retail segment were up 5% during the quarter.
The company did not provide financial guidance due to the "prolonged uncertainty" related to the pandemic.