What Happened?
Shares of footwear and accessories discount retailer Designer Brands (NYSE: DBI) fell 7.4% in the afternoon session after investor concerns grew over industry-wide pressures following a government report indicating rising costs. A report from the U.S. Bureau of Labor Statistics showed the Producer Price Index, which tracks costs for businesses, rose 0.5 percent in January. The data highlighted a jump in margins for apparel, footwear, and accessories retailing, signaling potential profit pressure for companies like Designer Brands.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Designer Brands? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Designer Brands’s shares are extremely volatile and have had 77 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 10.9% on the news that a softer-than-expected inflation report fueled hopes for interest rate cuts by the Federal Reserve. The January Consumer Price Index (CPI), a key measure of inflation, rose by 0.2%, which was less than economists had forecast, with the annual rate cooling to 2.4%. This encouraging data increased market expectations for the Fed to begin cutting interest rates as early as June. The news prompted a rally in Treasuries as their yields fell. While the market's reaction was initially described as a "bumpy ride" due to concerns in other sectors, the favorable inflation data ultimately helped calm Wall Street. Lower inflation is a key prerequisite for the central bank to ease its monetary policy, which is generally supportive of stock valuations.
Designer Brands is down 2.2% since the beginning of the year, and at $6.98 per share, it is trading 18.8% below its 52-week high of $8.60 from December 2025. Investors who bought $1,000 worth of Designer Brands’s shares 5 years ago would now be looking at an investment worth $522.46.
The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave, it’s free.
