Designer Brands (DBI) vs. Genesco (GCO) Critical Comparison

Designer Brands (NYSE:DBI) and Genesco (NYSE:GCO) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Earnings & Valuation

This table compares Designer Brands and Genesco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Designer Brands $3.18 billion 0.45 -$20.47 million $1.66 10.90
Genesco $2.19 billion 0.36 -$51.93 million $3.28 13.71

Designer Brands has higher revenue and earnings than Genesco. Designer Brands is trading at a lower price-to-earnings ratio than Genesco, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Designer Brands has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Genesco has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Designer Brands and Genesco, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Designer Brands 0 2 0 1 2.67
Genesco 0 4 0 0 2.00

Designer Brands currently has a consensus target price of $24.00, indicating a potential upside of 32.67%. Genesco has a consensus target price of $42.00, indicating a potential downside of 6.63%. Given Designer Brands’ stronger consensus rating and higher probable upside, research analysts clearly believe Designer Brands is more favorable than Genesco.

Institutional and Insider Ownership

79.5% of Designer Brands shares are owned by institutional investors. Comparatively, 94.8% of Genesco shares are owned by institutional investors. 17.4% of Designer Brands shares are owned by company insiders. Comparatively, 4.4% of Genesco shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Designer Brands and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Designer Brands -0.64% 14.76% 9.03%
Genesco -1.93% 7.52% 4.58%

Dividends

Designer Brands pays an annual dividend of $1.00 per share and has a dividend yield of 5.5%. Genesco does not pay a dividend. Designer Brands pays out 60.2% of its earnings in the form of a dividend.

Summary

Designer Brands beats Genesco on 12 of the 16 factors compared between the two stocks.

About Designer Brands

Designer Brands Inc. designs, producers, and retails footwear and accessories for women, men, and kids primarily in North America. It operates through three segments: The U.S. Retail, the Canada Retail, and the Brand Portfolio. The company also provides handbags, hosiery, jewelry, and other accessories. The company offers its products under the Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini, Jessica Simpson, Lucky, and other brands. It operates vincecamuto.com and solesociety.com e-commerce sites. As of March 19, 2019, it operated a portfolio of retail concepts in approximately 1,000 locations under the DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse banners. Designer Brands Inc. is based in Columbus, Ohio.

About Genesco

Genesco Inc. operates as a retailer and wholesaler of footwear, apparel, and accessories. The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Licensed Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. The Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear for men and women, as well as sells footwear through e-commerce. The Johnston & Murphy Group segment is involved in the retail, e-commerce, and catalog operations; and wholesale distribution of footwear, apparel, and accessories primarily for men. It also offers footwear and leather accessories under the H.S. Trask brand through retailers and department stores, an e-commerce Website, and catalog. The Licensed Brands segment markets casual footwear under the Dockers brand for men. As of February 02, 2019, the company operated approximately 1,512 retail stores in the United States, Puerto Rico, Canada, the United Kingdom, the Republic of Ireland, and Germany. Its Internet Websites include journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, littleburgundyshoes.com, johnstonmurphy.com, and trask.com. Genesco Inc. was founded in 1924 and is headquartered in Nashville, Tennessee.

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