One nugget of good news from Designer Brands Inc.’s second quarter earnings report was that sequential comparable sales showed improvement from the first quarter, suggesting that strategies to strengthen the company could be taking hold.

“Our second quarter results were highlighted by a 280-basis point sequential improvement in comparable sales from the first quarter, underscoring the impact of our targeted operational initiatives,” said the shoe firm’s CEO Doug Howe in a statement. “These initiatives supported a strong start to the back-to-school season within the U.S. Retail segment as well as gradual improvements in traffic and a notable uptick in conversion.”

Howe noted that consumer sentiment has “ticked up slightly.” Still, macroeconomic volatility with tariff increases, and continued caution in discretionary spending persists, creating more uncertainty ahead.

“That said, we remain committed to disciplined execution in those areas within our control as we navigate the near-term environment while continuing to build a stronger, more sustainable business for the future,” Howe added.

Designer Brands said it ended the second quarter with gross margin at 43.7 percent versus 44.0 percent last year. It also had with inventories of $610.9 million at quarter-end, versus $642.8 million at the end of the same year-ago period..

Net income for the three months ended Aug. 2 fell 27.7 percent to $10.8 million, or 22 cents a diluted share, from net income of $13.8 million, or 24 cents, in the same year-ago quarter. On an adjusted basis, diluted earnings per share (EPS) was 34 cents for the current quarter.

Net sales slipped nearly 4.2 percent to $739.8 million from $771.9 million a year ago. Overall, comparable sales for the quarter were down 5 percent. The U.S. retail segment posted comparable sales that were down 4.9 percent, while the Canada retail business slipped 0.6 percent. Comparable sales at the firm’s direct-to-consumer channel were down 29.2 percent.

For the six months, the company posted a net loss of $6.6 million, or 14 cents a diluted share, against net income of $14.6 million, or 25 cents, a year ago for the same period. Net sales were down 6.0 percent to $1.43 billion from $1.52 billion a year ago.

Telsey Advisory Group’s Dana Telsey, chief investment officer, said that the company’s adjusted diluted EPS was above the consensus estimate of 22 cents. She said the beat was driven primarily by greater SG&A (selling, general and administrative expenses) leverage and a favorable tax rate. She noted that management for now is emphasizing value for its customers, reducing costs and mitigating the impact from tariffs. With uncertainty over global trade policies and a challenging footwear market, Telsey maintained her “Market Perform” rating — essentially the same as a “Hold” rating — for shares of Designer Brands.

The company ended the quarter with 668 stores. The U.S. market had 493 DSW stores in operation at the end of the quarter. In Canada, the company operated 121 The Shoe Co. stores, 28 Rubino doors and 26 DSW locations.

Due to ongoing macroeconomic uncertainty over global trade policies, the company has decided not to reinstate full year 2025 guidance.