Designer Brands Inc.

Good day and welcome to the Designer Brands Inc. fourth quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jessica Miller, Head of Investor Relations. Please go ahead.

Good morning. Earlier today, the company issued a press release comparing results of operations for the 13-week and 52-week periods ended January 28, 2023 to the 13-week and 52-week periods ended January 29, 2022. Please note that the financial results that we will reference during the remainder of today's call exclude certain adjustments recorded under GAAP unless specified otherwise. For a complete reconciliation of GAAP to adjusted earnings, please reference our press release. Additionally, please note that remarks made about the future expectations, plans, and prospects of the company constitute forward-looking statements. Results may differ materially due to various factors listed in today's press release and the company's public filings with the SEC. The company assumes no obligation to update any forward-looking statements. Joining us today are Roger Rollins, Chief Executive Officer, Jared Poff, Chief Financial Officer, and Doug Howe, incoming CEO of DBI and President of DSW. Now let me turn over the call to Roger.

Thanks, Jessie. Thank you, everyone, for joining us this morning, especially our associates who I know are listening in today. I'm proud of the results we posted this year, delivering an adjusted EPS, at the top of our original annual guidance, especially given what has proven to be a very challenging environment. Before turning it over to Doug and Jared, I wanted to share a few thoughts on the progress we have made over the past seven years as we have evolved from DSW, a domestic retailer selling other people's brands, to the multinational brand-building enterprise that is now Designer Brands. In 2016, we shared our belief that the days of being a retailer of others' brands were in jeopardy, We described it as a piece of ice sitting out in 35-degree weather. Some retailers were glaciers that would take years to melt away, but others were going to disappear quickly, as we predicted that brands would aggressively take their products direct to consumer through the websites they operate in the stores they were opening, competing directly with the retailers that spent years and billions of dollars supporting them in growing their brands. As a result of this challenge, we felt it was necessary to diversify our business model. We first moved to expand our retail reach beyond the U.S., leading to the acquisition of the shoe company brand in Canada in 2018, where we bucked the trend of other U.S.-based businesses who have failed to grow in the market. This acquisition has been successful because we attracted an amazing team of experienced Canadian retailers who leverage the core retail competencies of our DSW business, including our direct-to-consumer capabilities, assortment disciplines, and technology infrastructure, allowing them to deliver nearly $100 million in gross profit and meaningfully contributing to DBI's bottom line while materially growing our share of the Canadian market, becoming one of the most commanding retailers in our channel. Additionally, we wanted to deliver a differentiated product and assortment through DSW and acquire the ability to design and source our own goods and to own or control brands through our own direct-to-consumer channels. This vision led to the acquisition of the Komodo organization, which has allowed us to now own and or operate six of the top 50 women's fashion footwear brands. It also allowed us to increase our penetration of owned brands sold through our direct-to-consumer channels to 18%, delivering approximately $100 million of incremental gross profit on the goods we design and source, and expanding our gross margin on these goods by over 1,000 basis points on average. And finally, this vision expanded distribution of our own brands to a much broader customer base through our wholesale partners, which today include some of the best retail platforms in the world. We also shared back in 2016 the desire to evolve our assortment to DSW. We were and are still a dominant player in the women's dress and seasonal categories, but we needed to casualize our mix to attack the athleisure category, which represented roughly half of all footwear sales. At that point, our penetration was roughly 30%, and we saw so much upside in supporting our fashion customer with this type of casual athleisure footwear. I'm very proud of the shifts our team has made, and this category now represents over 47% of our assortment. We've gained market share in the category through the expanded assortment of top national brands at DSW, the amazing Canadian results, our launch of kids footwear, and the recent acquisitions of Keds, Le Tigre, and Topo, which now sit on our own brand's portfolio. With these new additions, DBI now has the ability to design and source not just fashion and seasonal footwear, but casual footwear as well, meeting even more of the needs of the consumer we service through so many of our direct-to-consumer channels. This is such a critical piece of the puzzle as we build for long-term growth in both our top and bottom line. That's a lot of change in seven years, especially when you consider we did all of that while going through a pandemic, when the consumer wanted nothing to do with fashion footwear, as they were working from home and limiting their social occasions. We had our share of bumps along the way. However, I firmly believe our effective execution on our vision has set DBI up for success as we integrate our recent acquisitions, continue to accelerate our direct-to-consumer capabilities, and build our own brands across the retail landscape. This vision in our culture is what attracted Doug to our business a year ago, and I believe he's uniquely qualified as a merchant leader to take this strategy to the next level, to ensure our glacier doesn't melt, but instead grows to new heights. To that end, and in conjunction with the significant impact evolution of our business, we have recently undertaken some actions to streamline our operations, promote collaboration, and make our organization more efficient. We are sensitive to the fact that a number of our employees have been affected by this action. We're working closely with them to aid in their transition, and I personally would like to thank them for all their contributions to DBI. I want to thank Jay and our board, my team, and my teammates for all the support they have given me, and can't wait to watch them utilize the platforms we have built to deliver on our mission of inspiring self-expression. With that, I will turn it over to Doug and Jared for an overview of the past quarter. Doug?