On November 7, 2024, Steven Madden Ltd (SHOO, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. The company, known for designing and selling brand-name and private-label footwear and accessories, reported a notable increase in revenue, driven by its strategic focus on accessories and apparel.
Financial Performance Overview
Steven Madden Ltd (SHOO, Financial) reported a 13.0% increase in revenue, reaching $624.7 million, surpassing the analyst estimate of $607.86 million. This growth was primarily fueled by a 54.2% rise in wholesale accessories and apparel revenue, which included contributions from the newly acquired Almost Famous brand. However, wholesale footwear revenue saw a decline of 2.2%.
Despite the revenue growth, the company's gross profit margin slightly decreased to 41.5% from 42.1% in the previous year. Operating expenses also rose to 28.6% of revenue, up from 27.1% in the same period last year, impacting the income from operations, which fell to $74.6 million from $82.7 million.
Key Financial Achievements
Net income attributable to Steven Madden Ltd was $55.3 million, or $0.77 per diluted share, falling short of the analyst estimate of $0.89 per share. However, on an adjusted basis, net income was $64.8 million, or $0.91 per diluted share, exceeding the previous year's adjusted earnings of $0.88 per share.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We delivered strong results in the third quarter, with revenue and Adjusted earnings exceeding expectations. This performance was driven by outstanding growth in the accessories and apparel categories – including another quarter of exceptional performance in Steve Madden handbags and a strong contribution from newly acquired Almost Famous – and robust top line gains in international markets and direct-to-consumer channels, demonstrating our team’s strong execution of our key strategic initiatives.”
Channel Performance and Strategic Initiatives
The wholesale business saw a 14.4% increase in revenue, reaching $495.7 million. Excluding Almost Famous, the growth was 4.8%. The direct-to-consumer segment also performed well, with revenue increasing by 7.8% to $125.5 million, supported by reduced promotional activity, which improved the gross profit margin in this segment to 64.0%.
Steven Madden Ltd ended the quarter with 282 retail stores and five e-commerce websites, along with 67 company-operated concessions internationally, highlighting its expanding global footprint.
Balance Sheet and Cash Flow Highlights
As of September 30, 2024, the company held $150.5 million in cash, cash equivalents, and short-term investments. Inventory levels increased to $268.7 million from $205.7 million in the previous year, reflecting strategic stockpiling to meet demand. The company also repurchased $20.2 million of its common stock during the quarter.
Updated 2024 Outlook
Based on the strong third-quarter performance, Steven Madden Ltd has raised its guidance for 2024, expecting revenue to increase by 13% to 14% compared to 2023. The company anticipates adjusted diluted EPS to be in the range of $2.62 to $2.67, surpassing the annual estimate of $2.61.
Steven Madden Ltd's strategic focus on expanding its accessories and apparel segments, coupled with its direct-to-consumer and international market growth, positions the company well for continued success in the competitive apparel and accessories industry. Investors and stakeholders will be keenly watching how these initiatives translate into sustained financial performance in the coming quarters.
Explore the complete 8-K earnings release (here) from Steven Madden Ltd for further details.
