SCHEDULE: Stone House Capital Highlights Topo Athletic Growth Potential

Stone House Capital Management has amended its Schedule 13D filing for Designer Brands Inc., emphasizing the significant growth potential of the Topo Athletic brand.

Summary

• Stone House Capital Management, along with SH Capital Partners, L.P. and Mark A. Cohen, have filed an amendment to their Schedule 13D regarding Designer Brands Inc.
• The filing highlights positive commentary from management on the Topo Athletic brand during a recent earnings call.
• Topo Athletic is projected to generate over $100 million in revenue in 2027.
• Stone House Capital believes Topo has the potential to become the largest value driver for Designer Brands Inc. due to its growth runway and increasing popularity.
• The reporting persons collectively own 7,000,000 shares, representing 16.1% of the outstanding Class A Common Shares.
• They continue to believe the shares are undervalued and aim to maintain a constructive dialogue with management to maximize stockholder value.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, indicating constructive engagement and a focus on a specific growth driver within the company.

Positives

• Management provided additional disclosure regarding Topo Athletic's performance and potential.
• Topo Athletic is on track to generate more than $100 million of revenue in 2027.
• Topo Athletic has substantial runway for growth and increasing awareness within the running community.
• Stone House Capital believes Topo Athletic has the potential to become the Issuer's largest driver of value creation.
• The reporting persons are maintaining an open and constructive dialogue with management and the Board.

Negatives

• The reporting persons continue to believe that the Shares are significantly undervalued, implying a current market mispricing.
• The filing is an amendment to a previous filing, suggesting ongoing engagement or potential disagreements.

Risks

• The success of Topo Athletic becoming a significant value driver is dependent on continued growth and market adoption.
• The belief that shares are significantly undervalued suggests potential risks related to market perception or operational execution by Designer Brands Inc.

Future Outlook

The reporting persons believe Topo Athletic has significant potential for growth and could become the largest driver of value creation for Designer Brands Inc. They are committed to constructive dialogue with management to maximize stockholder value.

Management Comments

• Management provided additional disclosure regarding Topo Athletic during the recent earnings call on September 10, 2026.
• Topo Athletic is on track to generate more than $100 million of revenue in 2027.

Industry Context

StockSavvy.ai notes that the focus on a specific high-growth brand like Topo Athletic within a larger apparel company is a common strategy to unlock shareholder value. This aligns with industry trends where specialized brands can command higher valuations and drive overall corporate performance.

Stakeholder Impact

• Shareholders: Potential for increased value if Topo Athletic's growth is realized and the company's undervaluation is addressed.
• Management/Board: Expected to engage constructively with Stone House Capital on strategies to enhance shareholder value.

Next Steps

• Continue constructive dialogue with management and the Board of Directors regarding opportunities to maximize value for all stockholders.

Key Dates

Recommendation

The filing indicates an active and engaged significant shareholder who believes the company is undervalued and is focused on a specific growth driver. While positive, it doesn't present new, immediate financial results that would warrant a buy or sell. A 'hold' allows for monitoring the constructive dialogue and the realization of Topo Athletic's potential.

Keywords

Designer Brands Inc., Stone House Capital Management, Topo Athletic, Schedule 13D, Shareholder Value, Brand Growth, Revenue Projection