Designer Brands Inc (DBI)
Interest coverage
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 72,401 | 110,489 | 146,896 | 153,808 | 187,390 | 207,815 | 247,595 | 241,408 | 205,221 | 114,923 | -47,975 | -245,351 | -586,314 | -532,569 | -417,871 | -240,640 | 127,299 | 84,333 | 81,314 | 64,516 |
| Interest expense (ttm) | US$ in thousands | 32,171 | 26,640 | 22,699 | 18,519 | 14,874 | 18,067 | 20,947 | 26,267 | 32,129 | 33,331 | 34,634 | 30,350 | 22,944 | 14,205 | 7,370 | 5,554 | 5,947 | 6,998 | 5,694 | 4,527 |
| Interest coverage | 2.25 | 4.15 | 6.47 | 8.31 | 12.60 | 11.50 | 11.82 | 9.19 | 6.39 | 3.45 | -1.39 | -8.08 | -25.55 | -37.49 | -56.70 | -43.33 | 21.41 | 12.05 | 14.28 | 14.25 |
February 3, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $72,401K ÷ $32,171K
= 2.25
The interest coverage ratio of Designer Brands Inc has fluctuated over the past several reporting periods. The company's ability to cover its interest expenses improved significantly from May 2020 to Jan 2023, with a peak interest coverage ratio of 12.60 in Jan 2023. This indicates that the company's profits were more than sufficient to cover its interest payments during this period.
However, the interest coverage ratio deteriorated in subsequent periods, notably dropping to -25.55 in Jan 2021 and reaching its lowest point of -56.70 in May 2020. These negative interest coverage ratios suggest that Designer Brands Inc was not generating enough profits to cover its interest expenses, indicating potential financial distress.
The company experienced a recovery in interest coverage from Jan 2022 to Jul 2023, with ratios ranging from 6.39 to 11.82 during this period. This improvement suggests a better ability to meet its interest obligations with operating income.
It is important to note the significant negative interest coverage ratios in Jul 2021 and May 2021, indicating severe financial challenges during these periods. Overall, the trend in Designer Brands Inc's interest coverage ratio shows periods of strength, followed by periods of weakness, emphasizing the importance of monitoring the company's financial performance and operating profitability.
Peer comparison
Feb 3, 2024