Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Tuesday, UBS analysts increased the price target for Designer Brands (NYSE: NYSE:DBI) stock to $3.50 from $3.00, while maintaining a Neutral rating. The stock, currently trading at $3.38, has seen a significant decline of over 68% in the past year. The adjustment comes amid ongoing challenges faced by the company in its topline performance during the first quarter, which are expected to continue into the second quarter.
The analysts predict a 12-cent miss in Designer Brands’ Q1 earnings per share (EPS) and anticipate that the company will lower its full-year 2025 EPS guidance of $0.30-$0.50 due to tariff-related challenges. This situation is likely to lead to minor downward revisions in the consensus forecast, which currently stands at $0.22 for FY25. According to InvestingPro data, two analysts have already revised their earnings downward for the upcoming period.
Despite the anticipated weak report, UBS analysts believe the market has already factored in the negative sentiment, thus limiting any further downside risk. They do not expect significant changes in market sentiment surrounding Designer Brands following its Q1 report.
The options market is currently pricing in a potential movement of +/-12.6% around the event, compared to a historical average move of +/-10.9%. However, UBS analysts expect less volatility than the projected +/-12.6% range.
In other recent news, Designer Brands Inc. reported its fourth-quarter earnings for fiscal year 2024, surpassing earnings expectations with an EPS of -$0.44 against a forecast of -$0.47. However, revenue fell short, reaching $713.6 million compared to the anticipated $723.21 million. The company achieved positive comparable sales for the first time in nine quarters, driven by a focus on athleisure and private label brands. Designer Brands returned $79 million to shareholders through dividends and share repurchases during the fiscal year. In a separate announcement, the company declared a quarterly dividend of $0.05 per share for both Class A and Class B common shares, payable on June 18, 2025. Looking ahead, Designer Brands anticipates full-year sales growth in the low single digits for 2025, with an EPS range of $0.30 to $0.50. The company plans capital expenditures between $45 million and $55 million. Additionally, Designer Brands expects gradual performance improvements throughout the year, though the first quarter may underperform compared to the previous year.
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