Designer Brands Inc. · NYSE:DBI

Designer Brands — Investor Day (April 2022)

103 slides from Designer Brands's investor day presentation, Apr 8, 2022

Slide 1: Investor Day
INVESTOR DAY APRIL 8, 2022 DESIGNER BRANDS
Slide 2: Forward Looking Statements
© 2022 Designer Brands All rights reserved.2 FORWARD LOOKING STATEMENTS This presentation contains statements concerning our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry and other statements that are not historical facts. You can
Slide 3: Today's Presenters
© 2022 Designer Brands All rights reserved.3 TODAY’S PRESENTERS Christina Jackson Leader of Diversity, Equity & Inclusion, DBI Jared Poff Chief Financial Officer, DBI Roger Rawlins Chief Executive Officer, DBI Jim Weinberg EVP & Chief Merchandising Officer, DSW Julie Roy SVP & Chief Marketing Office
Slide 4: Roger Rawlins, Chief Executive Officer
Roger Rawlins, Chief Executive Officer 4
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5
Slide 6: Who We Were
© 2022 Designer Brands All rights reserved.6 WHO WE WERE 1 Unparalleled Number of Brands 20+ years of creating value by building award-winning retail dominance, infrastructure, and scale 2 Significant Retail Footprint Coast to Coast 3 Loyalty Program
Slide 7: Why We Had to Evolve
© 2022 Designer Brands All rights reserved.7 WHY WE HAD TO EVOLVE Value creation in traditional retailing diminished over last 10 years Since 2011, 5 retail groups acquired 20% of market Technology Drove Changes in Customer Behavior Brands Have Gone Direct-to-Consumer 0.2% 11.7%5.9%1.5%0.7% Brands D
Slide 9: Designer Brands Today
© 2022 Designer Brands All rights reserved.9 DESIGNER BRANDS TODAY 1 Brand Focused • Producing Owned Brands • National Brand Partners 2 Customer First 3 Significant Footprint Provides DTC Infrastructure
Slide 11: Leveraging Key Capabilities to Drive Growth
© 2022 Designer Brands All rights reserved.11 LEVERAGING KEY CAPABILITIES TO DRIVE GROWTH Doubling sales of Owned Brands in all channels Maintaining sales in National Brands
Slide 12: Transformed, Differentiated, Unique
© 2022 Designer Brands All rights reserved.12 TRANSFORMED, DIFFERENTIATED, UNIQUE Leading with Owned Brands: Transformed from retailer to brand builder Evolving partnerships with National Brands through value add and must have capabilities Knowing our nearly 30M customers like our best friends: Leve
Slide 13: Julie Roy, Chief Marketing Officer for DSW
Julie Roy, Chief Marketing Officer for DSW 13
Slide 16: Capturing Target Customers
16 © 2022 Designer Brands All rights reserved. Capturing Target Customers Contextual Considerations Purchase Motivators Media Consumption Interests & Preferences Channel Engagement & Footwear Preferences Category Engagement Demographics
Slide 17: Capturing Our Target Customers
© 2022 Designer Brands All rights reserved.17 CAPTURING OUR TARGET CUSTOMERS Vince Camuto Mix No. 6 Married Female Working Professional Well Above Average HHI Inspiration from: Older Gen-Z/Young Millennial College Student/Young Professional No Kids, Lower HHI Focused on: Trend, Style, Quality, Comfo
Slide 23: Loyalty Program and Owned Brand Spend
© 2022 Designer Brands All rights reserved.23 ~87% of demand Nearly 30M members Over 30% of members for 10+ years Award-winning program 43% Greater spend from customers that buy an Owned Brand at DSW
Slide 24: Increasing Customer Satisfaction
© 2022 Designer Brands All rights reserved.24 INCREASING CUSTOMER SATISFACTION “Ever since my daughter-in-law introduced me to DSW, that is the only shoe store I go to, and it’s been over 10 years!” “There is legitimately no other shoes place on this Earth that cares for you and gives back to others
Slide 25: Enhancing Our Capabilities to Better Serve Our Customer
© 2022 Designer Brands All rights reserved.25 ALWAYS focused on enhancing our capabilities to better serve our customer … and power our DTC growth Omni Capabilities & Experience Loyalty Brand BuildingPersonalization
Slide 26: Warehouse Reimagined
© 2022 Designer Brands All rights reserved.26 WAREHOUSE REIMAGINED Marrying $1B digital platform with omni-led store redesign Optimize capacity Amplify brands Deliver an elevated omni-channel experience Create ease & convenience
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Slide 28: Jim Weinberg and Sarah Rosen
Jim Weinberg, Chief Merchandising Officer, DSW Sarah Rosen, SVP Marketing & Communications, Camuto Group 28
Slide 30: Leveraging Key Capabilities to Drive Growth
© 2022 Designer Brands All rights reserved.30 LEVERAGING KEY CAPABILITIES TO DRIVE GROWTH Doubling sales of Owned Brands in all channels Maintaining sales in National Brands
Slide 32: Take the Wheel. Be Invincible.
© 2022 Designer Brands All rights reserved.32 DON’T LOOK IN THE REARVIEW MIRROR. FOCUS ON THE ROAD AHEAD. TAKE THE WHEEL. TAKE CHARGE. BELIEVE. BE YOU. BE INVINCIBLE.
Slide 34: Vince Camuto
VINCE CAMUTO
Slide 35: What Sets Vince Camuto Apart? Our Formula
© 2022 Designer Brands All rights reserved.35 + ++ =Attention to detail, expert craftsmanship & inspired style for every occasion CRAFT/QUALITY/STYLE VALUE PROPOSITION Content “I’m passionate about creating a product that infuses great style & comfort with unparalleled value.” —Vince Camuto HERITAGE
Slide 40: Brand-Building Media
BRAND-BUILDING MEDIA Amplify INVINCIBLE messaging & acquire NEW customers with a full funnel strategy. EXPAND OUR REACH BUILD NEW AUDIENCES LEAD WITH VIDEO TEST NEW PARTNERS BRAND STORY ACROSS-CHANNELS 40
Slide 41: Brand Social Presence
© 2022 Designer Brands All rights reserved.41 BRAND SOCIAL PRESENCE Brand storytelling, style inspiration & dynamic audience engagement. ALWAYS-ON INVINCIBLE INSPIRATION LIVE SELLING, Q&As, TAKEOVERS STAND OUT WITH VIDEO TEST & REACT PRODUCT & LIFESTYLE CONTENT GROW FOLLOWING & AUDIENCE REINFORCE BR
Slide 42: Influencer Marketing
© 2022 Designer Brands All rights reserved.42 INFLUENCER MARKETING Amplify INVINCIBLE story through trusted voices & deliver VC inspiration to millions of followers. BUILD NEW AUDIENCES AT SCALE ESTABLISH #INVINCIBLEVC COMMUNITY DOMINATE FASHION LANDSCAPE PROMOTE SELF EXPRESSION, DIVERSITY & INCLUSI
Slide 43: Celebrity Partnerships
© 2022 Designer Brands All rights reserved.43 CELEBRITY PARTNERSHIPS Reach new audiences & drive brand building buzz via gifting & partnerships. ALIGN VC WITH OF-THE-MOMENT TALENT LEVERAGE RELEVANT AUDIENCES AT SCALE BUILD BRAND AWARENESS DRIVE ENGAGEMENT & CONSIDERATION REINFORCE BRAND LOVE & LOYAL
Slide 44: Experiential Gifting
ENTER TO WIN LISTEN NOW EXPERIENTIAL GIFTING INVINCIBLE campaign comes to life through a memorable, music-themed experience. RECORD PLAYER INVINCIBLE-THEMED PLAYLIST DRIVE EMOTIONAL BRAND CONNECTION & CONTENT GENERATION FUEL BRAND AMBASSADORS CELEBRITY, VIP, INFLUENCER & STYLISTS EXTEND TO CUSTOMER
Slide 45: Invincible NYC Spring Pop-Up
INVINCIBLE NYC SPRING POP-UP Dynamic event to generate buzz, drive awareness & brand conversation. INVINCIBLE CAMPAIGN COMES TO LIFE: APRIL 7-9 IRL IMMERSIVE BRAND EXPERIENCE EMOTIONAL BRAND CONNECTION WITH INVINCIBLE-THEMED ACTIVATIONS VIP, CELEB & PUBLIC DAYS DRIVE BRAND INTEREST, ENGAGEMENT & DIS
Slide 46: VC Shop-in-Shops and DTC Approach
VC SHOP-IN-SHOPS QR CODE ASSOCIATE ENGAGEMENT & BRAND STORYTELLING ENHANCED SUPPORT EMAIL, SOCIAL, PDP ALTS & SITE CONTENT EXCLUSIVE CAMPAIGN IMAGERY OUR DTC APPROACH SHOP NOW 46
Slide 47: Nordstrom, Amazon and Dillard's Wholesale Marketing
NORDSTROM WHOLESALE MARKETING NORDSTROM MEDIA NETWORK BRAND PAGE LAUNCH PAID SOCIAL CAMPAIGN INFLUENCER CONTENT EXCLUSIVE CAMPAIGN IMAGERY MONTHLY EMAILS, SOCIAL, PDP ALTS BRAND TRAINING GUIDES CUSTOM INFLUENCER CAMPAIGNS AMAZONDILLARD’S A+ CONTENT PAY-PER-CLICK ADS DISPLAY ADS VINE CUSTOMER REVIEWS
Slide 50: Slide 50
Slide 55: Leveraging Key Capabilities to Drive Growth
© 2022 Designer Brands All rights reserved.55 LEVERAGING KEY CAPABILITIES TO DRIVE GROWTH Doubling sales of Owned Brands in all channels Maintaining sales in National Brands
Slide 62: Bill Jordan, President & Chief Growth Officer, DBI
Bill Jordan, President & Chief Growth Officer, DBI 62
Slide 64: Sourcing Vision
© 2022 Designer Brands All rights reserved.64 SOURCING VISION Speed in Design Cycle Country Diversification Sustainability AUC Decrease Eliminate 2 months in production cycle Decrease overall exposure to China Provide alternative factory options to protect against global events Expand test and learn
Slide 66: AUC Decrease
© 2022 Designer Brands All rights reserved.66 AUC DECREASE *AUC includes mix changes. Actual AUC's will be calculated by brand/class to ensure we get the 10% savings. 19.4 23.2 Pairs Plan 2021A 2024E ~20% AUC* Plan 2021A 2024E (10%) Sourcing Pairs l UC*
Slide 67: Supply Chain Vision
© 2022 Designer Brands All rights reserved.67 SUPPLY CHAIN VISION Supply Chain 2-3 Day & Same Day Delivery DTC Extend Supply Chain Capabilities to Key Brands Stores Shared Inventory Availability
Slide 68: Bringing 2-3 Day Delivery to Life
© 2022 Designer Brands All rights reserved.68 BRINGING 2-3 DAY DELIVERY TO LIFE Supply Chain East Coast Fulfillment Consolidation Order Management System Upgrade West Coast Distribution Center Hub Facilities Parcel Carriers/ Rate Shopping Net Savings Faster Delivery to Customers & Replenishment to D
Slide 70: Sharing Inventory Availability
© 2022 Designer Brands All rights reserved.70 SHARING INVENTORY AVAILABILITY Brand.com BOPIS Brand.com Returns Shipping Directly to Brand.com Customers Brand.com DSW
Slide 72: Speed & Efficiency
© 2022 Designer Brands All rights reserved.72 SPEED & EFFICIENCY Sourcing Supply Chain • Deliver product in a shorter timeframe at less cost • Allow National Brands to leverage our DTC infrastructure for their customers
Slide 73: Christina Jackson, Leader of Diversity, Equity & Inclusion
Christina Jackson, Leader of Diversity, Equity & Inclusion at DBI 73
Slide 74: Creating Value Over the Long-Term
© 2022 Designer Brands All rights reserved.74 CREATING VALUE OVER THE LONG-TERM Our Goal: Being Difference Makers Improving the well-being of our planet and its people Promoting diversity, equity, & inclusion, supporting our communities Helping to create a sustainable world
Slide 76: ...But We Aren't Finished Yet
© 2022 Designer Brands All rights reserved.76 …BUT WE AREN’T FINISHED YET Reaching New Heights as We Build for the Future Building strong pipeline of diverse talent in the design and footwear industry1 Conserving resources and supporting the underserved2 Reviewing our practices internally & leading
Slide 77: Supporting the Next Generation of Designers
© 2022 Designer Brands All rights reserved.77 Goal: Change the Face of the Footwear Industry SUPPORTING THE NEXT GENERATION OF DESIGNERS Helping to move the needle on representation of Black designers (currently only 3%) Partnering with Dr. D’Wayne Edwards • Investing $2M in the first Black-owned fo
Slide 78: DBI Is Synonymous with Shoe Donation
© 2022 Designer Brands All rights reserved.78 DBI IS SYNONYMOUS WITH SHOE DONATION Partnership with Soles4Souls Program Goals: Donations Received Pairs of Shoes, Rewards, Dollars 1 Customer Growth Metrics Overall Donators + New/Unique 2 Amplification Impressions, Press, Reach 3 Recent Milestones: ~6
Slide 79: Resonates Strongly with Customers, Associates, and Our Mission
© 2022 Designer Brands All rights reserved.79 8,577 families can receive a full year of food, shelter, and education Resonates Strongly with Customers, Associates, and Our Mission Empowering Microbusinesses Inspiring Global & Local Service Trips 2
Slide 81: Jared Poff, Chief Financial Officer
Jared Poff, Chief Financial Officer 81
Slide 82: Sustained Growth: Sales and GAAP EPS
© 2022 Designer Brands All rights reserved.82 SUSTAINED GROWTH 3,493 3,197 MSD Growth 2019 2021 2022 Guidance Sales $1.27 $2.00 $1.80 – $1.90 2019 2021 2022 Guidance EPSl GAAP Diluted EPS Numbers shown in millions
Slide 83: Sustained Growth: Sales and Adjusted EPS
© 2022 Designer Brands All rights reserved.83 SUSTAINED GROWTH 3,493 3,197 MSD Growth 2019 2021 2022 Guidance Sales $1.47 $1.70 $1.80 – $1.90 2019 2021 2022 Guidance EPSl Adjusted Diluted EPS Numbers shown in millions
Slide 84: Strong Performance in 2021 (Reported)
© 2022 Designer Brands All rights reserved.84 STRONG PERFORMANCE IN 2021 FY21 Sales $3.2B FY21 Digital Demand $1B FY21 Gross Profit $1.1B FY21 Gross Margin 33.4% FY21 Operating Income $205M Black Friday 2021 Highest Single Day Demand 3Q21 DBI Quarterly Gross Margin 36.7% 3Q21 DBI Quarterly Op. Incom
Slide 85: Strong Performance in 2021 (Adjusted)
© 2022 Designer Brands All rights reserved.85 STRONG PERFORMANCE IN 2021 FY21 Sales $3.2B FY21 Digital Demand $1B FY21 Gross Profit $1.1B FY21 Gross Margin 33.4% FY21 Adj. Operating Income $214M Black Friday 2021 Highest Single Day Demand 3Q21 DBI Quarterly Gross Margin 36.7% 3Q21 DBI Quarterly Adj.
Slide 88: Gross Profit
© 2022 Designer Brands All rights reserved.88 GROSS PROFIT Targeting $1.4B in gross profit and 35% gross margin by 2026 $1.1B / 33.4% FY'21 DTC Growth Canada Camuto non-DBI Wholesale Shipping/Occupancy FY'2620 20 $1.4B / 35.0% Non-DBI Wh lesale
Slide 89: Owned Brands Driving Margin Upside
© 2022 Designer Brands All rights reserved.89 OWNED BRANDS DRIVING MARGIN UPSIDE Numbers shown in billions (Excludes Canada) 2021 2026 Targets Net Sales Owned Brands $0.6 $1.2 98% Growth National Brands $2.3 $2.4 3% Growth Merchandise Margin Owned Brands 65.2% 66.2% 100 bps National Brands 49.4% 48.
Slide 90: Operating Margin Improvement
© 2022 Designer Brands All rights reserved.90 OPERATING MARGIN IMPROVEMENT - Shipping & Labor Inflation ~200 BPS Improvement Anticipated by 2026 + Owned Brand Growth Sourcing Cost Reductions Store Optimization 14% Decline in Sq Ft
Slide 91: Opportunity for Operating Margin Expansion (GAAP)
© 2022 Designer Brands All rights reserved.91 OPPORTUNITY FOR OPERATING MARGIN EXPANSION 6.7% to 9%+ $205 $306 $356 2021 2024E 2026E 6.4% 8.2% 8.8% 2021 2024E 2026E GAAP Operating Income GAAP Operating Margin
Slide 92: Opportunity for Operating Margin Expansion (Adjusted)
© 2022 Designer Brands All rights reserved.92 OPPORTUNITY FOR OPERATING MARGIN EXPANSION 6.7% to 9%+ $214 $306 $356 2021 2024E 2026E 6.7% 8.2% 8.8% 2021 2024E 2026E Adjusted Operating Income Adjusted Operating Margin
Slide 93: Future Growth: GAAP EPS
© 2022 Designer Brands All rights reserved.93 $1.27 $2.00 2019 2021 2022 Guidance 2024E 2026E GAAP EPS GAAP EPS CAGR of ~7% Over Next Five Years $1.80 - $1.90 FUTURE GROWTH EPS Guidance Raised to $1.80-$1.90 for FY2022 $2.75 - $2.85 $2.45 - $2.55
Slide 94: Future Growth: Adjusted Diluted EPS
© 2022 Designer Brands All rights reserved.94 $1.47 $1.70 2019 2021 2022 Guidance 2024E 2026E Adjusted Diluted EPS EPS CAGR of ~11% Over Next Five Years FUTURE GROWTH EPS Guidance Raised to $1.80-$1.90 for FY2022 $2.75 - $2.85 $2.45 - $2.55 $1.80 - $1.90
Slide 95: Capital Allocation
© 2022 Designer Brands All rights reserved.95 CAPITAL ALLOCATION Capex Investment Dividends Share Repurchases Opportunistic M&A Generating $1B of Cash from Operating Activities Over Next 5 Years
Slide 96: Generating Strong Returns for Shareholders
© 2022 Designer Brands All rights reserved.96 GENERATING STRONG RETURNS FOR SHAREHOLDERS Owned Brand Growth 9% Operating Margins + Strong Free Cash Flow Share Buybacks & Dividends + 25% Expected Annual Total Shareholder Return CAGR
Slide 97: Roger Rawlins, Chief Executive Officer
Roger Rawlins, Chief Executive Officer 97
Slide 98: Transformed, Differentiated, Unique
© 2022 Designer Brands All rights reserved.98 TRANSFORMED, DIFFERENTIATED, UNIQUE Leading with Owned Brands: Transformed from retailer to brand builder Evolving partnerships with National Brands through value add and must have capabilities Knowing our nearly 30M customers like our best friend: Lever
Slide 99: Q & A Session
db DESIGNER BRANDS Q & A SESSION
Slide 100: Appendix
db DESIGNER BRANDS APPENDIX
Slide 101: Non-GAAP Reconciliations
© 2022 Designer Brands All rights reserved.101 NON-GAAP RECONCILIATIONS NON-GAAP RECONCILIATIONS (unaudited and in thousands, except per share amounts) 2019 2021 Fiscal Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Operating profit $ 127,299 $ 17,005 $ 61,412 $ 104,308 $
Slide 102: Net Sales by Product and Service Categories
© 2022 Designer Brands All rights reserved.102 NET SALES BY PRODUCT AND SERVICE CATEGORIES (in thousands) 2021 2020 2019 Net sales: U.S. Retail segment: Women's footwear $ 1,772,729 $ 1,161,836 $ 1,853,265 Men's footwear 620,631 386,338 539,917 Kids' footwear 234,806 151,121 158,261 Accessories and
Slide 103: Net Sales by Brand Categories
© 2022 Designer Brands All rights reserved.103 NET SALES BY BRAND CATEGORIES 2021 (in thousands) US Retail Canada Retail Brand Portfolio Other / Eliminations Consolidated Owned Brands: Direct-to-consumer $ 421,398 $ - $ 27,876 $ - $ 449,275 External customer wholesale and commission income - - 164,1

Designer Brands — Investor Day (April 2022) on 6ix

Designer Brands — Investor Day (April 2022)

Slide 1: Investor Day

Slide 2: Forward Looking Statements

Slide 3: Today's Presenters

Slide 4: Roger Rawlins, Chief Executive Officer

Slide 5: 5

Slide 6: Who We Were

Slide 7: Why We Had to Evolve

Slide 8: reserved.8

Slide 9: Designer Brands Today

Slide 10: How We Will Grow

Slide 11: Leveraging Key Capabilities to Drive Growth

Slide 12: Transformed, Differentiated, Unique

Slide 13: Julie Roy, Chief Marketing Officer for DSW

Slide 14: Customer

Slide 15: reserved.15

Slide 16: Capturing Target Customers

Slide 17: Capturing Our Target Customers

Slide 18: Engaging with consumers how and where they spend their time

Slide 19: reserved.19

Slide 20: Experts at attracting new customers

Slide 21: Driving Record Customer Acquisition

Slide 22: Loyalty Program

Slide 23: Loyalty Program and Owned Brand Spend

Slide 24: Increasing Customer Satisfaction

Slide 25: Enhancing Our Capabilities to Better Serve Our Customer

Slide 26: Warehouse Reimagined

Slide 27: Slide 27

Slide 28: Jim Weinberg and Sarah Rosen

Slide 29: reserved.29

Slide 30: Leveraging Key Capabilities to Drive Growth

Slide 31: Spring 2022 Campaign

Slide 32: Take the Wheel. Be Invincible.

Slide 33: reserved.33

Slide 34: Vince Camuto

Slide 35: What Sets Vince Camuto Apart? Our Formula

Slide 36: Craft/Quality/Style

Slide 37: Heritage

Slide 38: Aspirational Content

Slide 39: Self-Expression Content

Slide 40: Brand-Building Media

Slide 41: Brand Social Presence

Slide 42: Influencer Marketing

Slide 43: Celebrity Partnerships

Slide 44: Experiential Gifting

Slide 45: Invincible NYC Spring Pop-Up

Slide 46: VC Shop-in-Shops and DTC Approach

Slide 47: Nordstrom, Amazon and Dillard's Wholesale Marketing

Slide 48: This Is Our Approach Across All Our Owned Brands

Slide 49: reserved.49

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Slide 51: reserved.51

Slide 52: reserved.52

Slide 53: reserved.53

Slide 54: Hush Puppies

Slide 55: Leveraging Key Capabilities to Drive Growth

Slide 56: reserved.56

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Slide 61: Well-Positioned for the Future

Slide 62: Bill Jordan, President & Chief Growth Officer, DBI

Slide 63: Speed & Efficiency: Sourcing and Supply Chain

Slide 64: Sourcing Vision

Slide 65: Sustainability: Sourcing

Slide 66: AUC Decrease

Slide 67: Supply Chain Vision

Slide 68: Bringing 2-3 Day Delivery to Life

Slide 69: reserved.69

Slide 70: Sharing Inventory Availability

Slide 71: Leveraging Our Store Fleet

Slide 72: Speed & Efficiency

Slide 73: Christina Jackson, Leader of Diversity, Equity & Inclusion

Slide 74: Creating Value Over the Long-Term

Slide 75: What We've Accomplished So Far

Slide 76: ...But We Aren't Finished Yet

Slide 77: Supporting the Next Generation of Designers

Slide 78: DBI Is Synonymous with Shoe Donation

Slide 79: Resonates Strongly with Customers, Associates, and Our Mission