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Why Designer Brands Stock Jumped 10% Today

By Rich Duprey - Dec 28, 2020 at 4:16PM

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The footwear specialist could benefit from some trickle-down economics.

What happened

Shares of Designer Brands ( DBI 0.52% ) sprinted 10.2% higher Monday on no company-specific news, though the Dow Jones Industrial Average was up over 200 points after President Trump signed the new stimulus bill.

So what

Extra money in consumers' pockets could point to a new round of spending and more footwear sales. And Trump agrees with House Speaker Nancy Pelosi, the California Democrat, that the stimulus package for individuals needs to be a lot more. He's pushing for $2,000, with an extra $600 for families with children, meaning a family of four would receive $5,200.

Woman sitting in circle showing off sneakers

Image source: Designer Brands.

Now what

Designer Brands has been leaning heavily into the trends that have been shaping consumer choices since the pandemic, namely fitness footwear. The company is known primarily as a fashion and casual shoe outlet, but home-fitness and exercise have been important trends for a number of similar companies.

But because there is such a tenuous connection between the stimulus checks and whether they will flow to Designer Brands' top line, investors may see today's gains quickly reversed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Designer Brands Inc. Stock Quote
Designer Brands Inc.
$13.50 (0.52%) $0.07

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