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Item 5. Market for Registrant’s Common Equity

2021-03-22 compared with 2020-05-01 · 15 added, 88 removed, 11 unchanged (90% of the section changed)

1 unchanged sentence

Common Shares

Our Class A common shares are listed for trading on the New York Stock Exchange ("NYSE") under the ticker symbol "DBI." There is currently no public market for the Company's Class B common shares, but the Class B common shares can be exchanged for the Company's Class A common shares at the election of the holder on a share for share basis.

Our Class A common shares are listed for trading on the NYSE under the ticker symbol "DBI." There is currently no public market for the Company's Class B common shares, but the Class B common shares can be exchanged for the Company's Class A common shares at the election of the holder on a share for share basis.

Holders of Class A common shares are entitled to one vote per share and holders of Class B common shares are entitled to eight votes per share on matters submitted to shareholders for approval.

As of April 24, 2020 , there were 179 holders of record of our Class A common shares and 13 holders of record of our Class B common shares.

The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in "street names" or persons, partnerships, associates, corporations, or other entities identified in security position listings maintained by depositories.

The payment of any future dividends is at the discretion of our Board of Directors and is based on our future earnings, cash flow, financial condition, capital requirements, changes in taxation laws, general economic condition and any other relevant factors.

It is anticipated that dividends will be declared on a quarterly basis.

Our Credit Facility allows the payments of dividends by us or our subsidiaries, provided that immediately before and after a dividend payment there is no event of default, as defined in our Credit Facility.

Refer to Item 6.

Selected Financial Data of this Annual Report on Form 10-K for additional information on our dividend history.

On March 17, 2020 , the Board of Directors declared a quarterly cash dividend payment of $0.10 per share for both Class A and Class B common shares.

The dividend was paid on April 10, 2020 to shareholders of record at the close of business on March 30, 2020 .

As of March 15, 2021, there were 192 holders of record of our Class A common shares and 13 holders of record of our Class B common shares.

Th e number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in "street names" or persons, partnerships, associates, corporations, or other entities identified in security position listings maintained by depositories.

On March 17, 2020, we announced that we would reduce dividends for the first quarter of fiscal 2020 and thereafter discontinued paying dividends for the balance of fiscal 2020.

The payment of dividends is subject to the ABL Revolver and Term Loan restrictions and is at the discretion of our Board of Directors, which considers our expectations of future earnings, cash flow, financial condition, capital requirements, changes in taxation laws, general economic condition and any other relevant factors.

Share Repurchase Program

On August 17, 2017, the Board of Directors authorized the repurchase of an additional $500 million of Class A common shares under our share repurchase program, which was added to the $33.5 million remaining from the previous authorization.

The share repurchase program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common shares under the program.

Shares will be repurchased in the open market at times and in amounts considered appropriate based on price and market conditions.

The following table sets forth the Class A common share repurchases during the most recent quarter:

(in thousands, except per share amounts)

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Programs

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs

November 3, 2019 to November 30, 2019

December 1, 2019 to January 4, 2020

January 5, 2020 to February 1, 2020 (1)

The total number of shares repurchased represents shares withheld in connection with tax payments due upon vesting of employee restricted stock awards.

During fiscal 2020 , we did not repurchase any Class A common shares.

The share repurchase program is subject to the ABL Revolver and Term Loan restrictions and may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common shares under the program.

Any share repurchases will be completed in the open market at times and in amounts considered appropriate based on price and market conditions.

The ABL Revolver and the Term Loan each contain customary covenants restricting our ability to pay dividends or repurchase stock.

We are restricted from paying dividends or repurchasing stock until the third quarter of fiscal 2021 at the earliest, after which certain limitations apply.

We currently do not anticipate paying dividends or repurchasing additional shares under our share repurchase program.

Performance Graph

1 unchanged sentence

The comparison of the cumulative total returns for each investment assumes that $100 was invested on January 30, 2016 and that all dividends were reinvested.

This comparison includes the period ended January 31, 2015 through the period ended February 1, 2020 .

Company / Index

January 31, 2015

January 30, 2016

January 28, 2017

February 3, 2018

February 2, 2019

February 1, 2020

This comparison includes the period ended January 30, 2016 through the period ended January 30, 2021.

Company / Index January 30, 2016 January 28, 2017 February 3, 2018 February 2, 2019 February 1, 2020 January 30, 2021

Designer Brands Inc.

$ 100.00 $ 87.62 $ 87.96 $ 124.95 $ 70.23 $ 61.40

S&P MidCap 400 Index $ 100.00 $ 128.76 $ 145.53 $ 139.75 $ 152.32 $ 177.59

S&P MidCap 400 Retail Index $ 100.00 $ 101.22 $ 101.46 $ 102.09 $ 99.88 $ 173.05

SELECTED FINANCIAL DATA

The following table sets forth various selected financial information.

Such selected consolidated financial data should be read in conjunction with our Consolidated Financial Statements, including the notes thereto, set forth in Item 8.

Financial Statements and Supplementary Data and Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K.

(in thousands, except percentages, per share and per square foot data, and store count)

Statement of Operations Data:

Net sales (4)

Gross profit (4)

Operating profit

Net income (loss) (5)

Diluted earnings (loss) per share (5)

Weighted average number of diluted shares outstanding

Balance Sheet Data:

Cash and cash equivalents and investments

Total shareholders' equity

Comparable sales change (6)

Number of U.S.

Retail stores:

Beginning of period

Closed stores

End of period

Number of Canada Retail stores:

Beginning of period

Acquired stores

Closed stores

End of period

Store square footage:

Canada Retail

Net sales per average square foot:

Canada Retail (8)

ABG stores serviced

Cash dividends per share

All fiscal years are based on a 52 -week year, except for fiscal 2017, which is based on a 53 -week year.

During fiscal 2019, we adopted the new accounting standard for leases, Accounting Standards Update ("ASU") 2016-02 and the related amendments.

We elected to initially apply ASU 2016-02 as of February 3, 2019, with the recognition of $1.0 billion of lease assets and $1.1 billion of lease liabilities and a cumulative-effect adjustment that decreased retained

earnings by $9.6 million for transition impairments related to previously impaired leased locations.

Periods prior to February 3, 2019 were not restated.

Upon transition to ASU 2016-02, we recognized lease liabilities based on the present value of the remaining future fixed lease commitments, net of outstanding tenant allowance receivables, with corresponding lease assets.

Amounts for prepaid expenses, deferred rent, deferred construction and tenant allowances, the accrual for lease obligations, and favorable and unfavorable leasehold interests were netted against the lease assets.

On May 10, 2018 , we acquired the remaining interest in TSL that we did not previously own.

Beginning with our second quarter of fiscal 2018, TSL ceased being accounted for under the equity method of accounting and was accounted for as a consolidated wholly owned subsidiary.

On November 5, 2018 , we completed the acquisition of Camuto Group.

We changed our presentation of net sales and gross profit for all periods presented to include commission income.

Previously reported other revenue, which primarily included operating sublease income, was reclassified to operating expenses.

Net income and diluted earnings per share for fiscal 2019 included net after-tax charges of $19.8 million , or $0.26 per diluted share, primarily related to integration and restructuring costs and impairment charges.

Net loss and diluted loss per share for fiscal 2018 included net after-tax charges of $155.3 million , or $1.92 per diluted share, primarily related to impairment charges, acquisition-related activities, the exit of the Town Shoes banner, other restructuring costs, and the net tax expense impact of finalizing the U.S.

Tax Reform implementation assessment.

Net income and diluted earnings per share for fiscal 2017 included net after-tax charges of $55.5 million, or $0.68 per diluted share, primarily related to impairment charges, inventory write-downs, amortization of intangibles and the change in fair value of the contingent consideration liability associated with Ebuys, restructuring costs, foreign exchange net losses, and the initial net tax expense impact of implementing the U.S.

A store is considered comparable when in operation for at least 14 months at the beginning of the fiscal year.

Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter they are closed.

Comparable sales include e-commerce sales.

Stores in Canada from the TSL acquisition that were in operation for at least 14 months at the beginning of fiscal 2019, along with its e-commerce sales, were added to the comparable base beginning with the second quarter of fiscal 2019.

Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period in the prior year.

For the Brand Portfolio segment, sales from the direct-to-consumer www.vincecamuto.com e-commerce site were added to the comparable base beginning with the fourth quarter of fiscal 2019.

Store square footage represents the total amount of square footage as of the end of the fiscal year for stores and does not include ABG or square footage of the distribution and fulfillment centers.

Canada Retail sales for fiscal 2018 included in the calculation of net sales per average square foot have been annualized on a full year basis.

The calculation excludes the Town Shoes banner that was exited during fiscal 2018.

NOT APPLICABLE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity