Steve Madden Announces Second Quarter 2024 Results

Rhea-AI Summary

Steve Madden (Nasdaq: SHOO) reported its Q2 2024 financial results, with revenue rising 17.6% to $523.6 million, up from $445.3 million in Q2 2023. Adjusted income from operations grew to $54.5 million, or 10.4% of revenue, versus $44.5 million, or 10.0% of revenue last year. Net income was $35.4 million, or $0.49 per diluted share, compared to $34.5 million, or $0.46 per diluted share in Q2 2023. Adjusted net income increased to $41.2 million, or $0.57 per diluted share, from $34.9 million, or $0.47 per diluted share last year.

Revenue for the wholesale business surged by 22.5% to $385.3 million. Excluding the acquisition of Almost Famous, wholesale revenue was up 8.2%. Direct-to-consumer revenue climbed 6.4% to $136.4 million.

Steve Madden ended the quarter with $192.2 million in cash and $241.6 million in inventory. The company announced a quarterly dividend of $0.21 per share and continues to expect fiscal 2024 revenue growth of 11%-13%, with adjusted EPS between $2.55 and $2.65.

Positive

• Revenue increased 17.6% to $523.6 million.
• Adjusted income from operations rose to $54.5 million.
• Net income grew to $35.4 million.
• Adjusted net income increased to $41.2 million.
• Wholesale revenue surged by 22.5%.
• Direct-to-consumer revenue climbed 6.4%.
• Ended the quarter with $192.2 million in cash.

Negative

• Gross profit percentage declined to 41.5% from 42.6% in Q2 2023.
• Income from operations as a percentage of revenue decreased to 9.0% from 9.9%.

Insights

Financial Analyst

Steve Madden's Q2 2024 results demonstrate robust growth and strategic execution, but with some nuanced considerations. Revenue increased by 17.6% to $523.6 million, significantly outpacing the same period in 2023. This growth was primarily driven by exceptional performance in accessories and apparel, as well as strong gains in international markets and direct-to-consumer channels.

However, it's important to note that gross profit margin slightly decreased to 41.5% from 42.6% year-over-year. This decline was partially offset by improved operating efficiency, with operating expenses as a percentage of revenue decreasing to 31.3% from 32.7%.

The acquisition of Almost Famous has significantly boosted wholesale accessories/apparel revenue, which increased by 86.0%. Excluding this acquisition, the growth was still impressive at 29.8%. However, wholesale footwear revenue growth was modest at 0.9%, indicating potential challenges in this core segment.

The company's direct-to-consumer channel showed resilience with a 6.4% increase in revenue and improved gross margin, suggesting effective inventory management and reduced promotional activity.

While the overall performance is strong, investors should monitor the footwear segment's growth and the integration of Almost Famous. The company's maintained guidance for fiscal 2024 indicates confidence in their strategy, but also suggests upside potential for the remainder of the year.

Market Research Analyst

Steve Madden's Q2 2024 results reveal interesting market dynamics and consumer behavior shifts. The substantial growth in accessories and apparel categories, outpacing footwear, indicates a diversification in consumer preferences within the fashion industry. This trend aligns with the broader market shift towards versatile and lifestyle-oriented products.

The company's success in international markets is particularly noteworthy, suggesting effective global expansion strategies and increasing brand recognition worldwide. This could be a key driver for future growth, especially as the domestic market may face saturation.

The 6.4% growth in direct-to-consumer revenue, coupled with improved gross margins in this channel, underscores the importance of omnichannel strategies in today's retail landscape. It reflects consumers' increasing comfort with online shopping for fashion items, a trend accelerated by the pandemic.

However, the modest 0.9% growth in wholesale footwear revenue warrants attention. This could indicate increased competition in the footwear market or a shift in retailer buying patterns. It may also suggest a need for innovation or repositioning in the company's core footwear offerings.

The acquisition of Almost Famous appears to be a strategic move to capitalize on the growing accessories and apparel market. This diversification could help buffer against potential slowdowns in the footwear segment and appeal to a broader consumer base.

Overall, Steve Madden's results reflect adaptability to changing market conditions and consumer preferences, but also highlight the challenges of maintaining growth in a competitive and evolving fashion retail landscape.

LONG ISLAND CITY, N.Y., July 31, 2024 (GLOBE NEWSWIRE) -- Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel, today announced financial results for the second quarter ended June 30, 2024.

Amounts referred to as “Adjusted” are non-GAAP measures that exclude the items defined as “Non-GAAP Adjustments” in the “Non-GAAP Reconciliation” section.

Second Quarter 2024 Results

• Revenue increased 17.6% to $523.6 million, compared to $445.3 million in the same period of 2023.
• Gross profit as a percentage of revenue was 41.5%, compared to 42.6% in the same period of 2023.
• Operating expenses as a percentage of revenue were 31.3%, compared to 32.7% in the same period of 2023. Adjusted operating expenses as a percentage of revenue were 31.1%, compared to 32.6% in the same period of 2023.
• Income from operations totaled $46.9 million, or 9.0% of revenue, compared to $44.0 million, or 9.9% of revenue, in the same period of 2023. Adjusted income from operations totaled $54.5 million, or 10.4% of revenue, compared to $44.5 million, or 10.0% of revenue, in the same period of 2023.
• Net income attributable to Steven Madden, Ltd. was $35.4 million, or $0.49 per diluted share, compared to $34.5 million, or $0.46 per diluted share, in the same period of 2023. Adjusted net income attributable to Steven Madden, Ltd. was $41.2 million, or $0.57 per diluted share, compared to $34.9 million, or $0.47 per diluted share, in the same period of 2023.
  

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We delivered strong results in the second quarter, with revenue increasing 18% and Adjusted diluted EPS rising 23% compared to the same period in 2023. This performance was driven by exceptional growth in the accessories and apparel categories and robust gains in international markets and direct-to-consumer channels, demonstrating our team’s strong execution of our key strategic initiatives. While the near-term operating environment remains choppy, we are confident that our core strengths – our brands, business model and people – will enable us to drive sustainable revenue and earnings growth over the long term.”

Second Quarter 2024 Channel Results

Revenue for the wholesale business was $385.3 million, a 22.5% increase compared to the second quarter of 2023. Excluding the newly acquired Almost Famous, wholesale revenue increased 8.2%. Wholesale footwear revenue increased 0.9%. Wholesale accessories/apparel revenue increased 86.0%, or 29.8% excluding Almost Famous. Gross profit as a percentage of wholesale revenue was 33.1%, compared to 33.6% in the second quarter of 2023 driven by the impact of Almost Famous.

Direct-to-consumer revenue was $136.4 million, a 6.4% increase compared to the second quarter of 2023. Gross profit as a percentage of direct-to-consumer revenue increased to 64.3%, compared to 63.7% in the second quarter of 2023 driven by reduced promotional activity.

The Company ended the quarter with 273 brick-and-mortar retail stores and five e-commerce websites, as well as 27 company-operated concessions in international markets.

Balance Sheet and Cash Flow Highlights

As of June 30, 2024, cash, cash equivalents and short-term investments totaled $192.2 million. Inventory totaled $241.6 million, compared to $207.8 million at the end of the second quarter of 2023.

During the second quarter of 2024, the Company spent $38.2 million on repurchases of its common stock, which includes shares acquired through the net settlement of employees’ stock awards.

Quarterly Cash Dividend

The Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on September 23, 2024 to stockholders of record as of the close of business on September 13, 2024.

2024 Outlook

For fiscal 2024, the Company continues to expect revenue will increase 11% to 13% compared to 2023. The Company expects diluted EPS will be in the range of $2.43 to $2.53. The Company continues to expect Adjusted diluted EPS will be in the range of $2.55 to $2.65.

Conference Call Information

Interested stockholders are invited to listen to the conference call scheduled for today, July 31, 2024, at 8:30 a.m. Eastern Time, which will include a discussion of the Company's second quarter 2024 earnings results and 2024 outlook. The call will be webcast live on the Company’s website at https://investor.stevemadden.com. A webcast replay of the conference call will be available on the Company's website or via the following webcast link https://edge.media-server.com/mmc/p/fqn8ogri beginning today at approximately 10:00 a.m. Eastern Time.

About Steve Madden

Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo® and GREATS®, Steve Madden licenses footwear, handbags and other accessory categories for the Anne Klein® brand. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers and independent stores. Steve Madden also directly operates brick-and-mortar retail stores and e-commerce websites. Steve Madden also licenses certain of its brands to third parties for the marketing and sale of certain products in the apparel, accessory and home categories. For local store information and the latest sandals, dress shoes, fashion sneakers, boots, booties, and more, please visit www.stevemadden.com, www.dolcevita.com and our other branded websites.

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, “estimate”, or “confident” and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations, and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:

• geopolitical tensions in the regions in which we operate and any related challenging macroeconomic conditions globally that may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations and financial condition;
• the Company’s ability to navigate shifting macro-economic environments, including but not limited to inflation and the potential for recessionary conditions;
• the Company’s ability to accurately anticipate fashion trends and promptly respond to consumer demand;
• the Company’s ability to compete effectively in a highly competitive market;
• the Company’s ability to adapt its business model to rapid changes in the retail industry;
• supply chain disruptions to product delivery systems and logistics, and the Company’s ability to properly manage inventory;
• the Company’s reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as their ability to meet the Company’s quality standards;
• the Company’s dependence on the hiring and retention of key personnel;
• the Company’s ability to successfully implement growth strategies and integrate acquired businesses;
• changes in trade policies and tariffs imposed by the United States government and the governments of other nations in which the Company manufactures and sells products;
• the Company’s ability to adequately protect its trademarks and other intellectual property rights;
• the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or a pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
• legal, regulatory, political and economic risks that may affect the Company’s sales in international markets;
• changes in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial results;
• additional tax liabilities resulting from audits by various taxing authorities;
• cybersecurity risks and costs of defending against, mitigating, and responding to data security threats and breaches impacting the Company;
• the Company’s ability to achieve operating results that are consistent with prior financial guidance; and
• other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

The Company does not undertake, and disclaims, any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments, or otherwise.

STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net sales		$	521,709		$	442,837		$	1,072,276		$	904,574
Licensing fee income			1,844			2,465			3,658			4,562
Total revenue			523,553			445,302			1,075,934			909,136
Cost of sales			306,424			255,432			633,990			524,174
Gross profit			217,129			189,870			441,944			384,962
Operating expenses			163,709			145,830			328,428			294,411
Change in valuation of contingent payment liability			6,550			—			8,200			—
Impairment of intangible			—			—			1,700			—
Income from operations			46,870			44,040			103,616			90,551
Interest and other income, net			1,354			1,956			2,909			3,976
Income before provision for income taxes			48,224			45,996			106,525			94,527
Provision for income taxes			11,276			10,923			25,015			22,668
Net income			36,948			35,073			81,510			71,859
Less: net income attributable to noncontrolling interest			1,572			544			2,200			600
Net income attributable to Steven Madden, Ltd.		$	35,376		$	34,529		$	79,310		$	71,259
Basic income per share		$	0.50		$	0.47		$	1.10		$	0.96
Diluted income per share		$	0.49		$	0.46		$	1.09		$	0.95
Basic weighted average common shares outstanding			71,458			73,613			71,875			74,053
Diluted weighted average common shares outstanding			72,004			74,883			72,430			75,361
Cash dividends declared per common share		$	0.21		$	0.21		$	0.42		$	0.42

STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
					As of
		June 30, 2024			December 31, 2023			June 30, 2023
		(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	180,457		$	204,640		$	258,056
Short-term investments			11,761			15,173			16,358
Accounts receivable, net of allowances			36,624			40,246			41,332
Factor accounts receivable			341,967			320,723			256,627
Inventories			241,643			228,990			207,839
Prepaid expenses and other current assets			28,448			29,009			24,282
Income tax receivable and prepaid income taxes			19,208			16,051			23,405
Total current assets			860,108			854,832			827,899
Note receivable - related party			—			—			201
Property and equipment, net			49,056			47,199			42,267
Operating lease right-of-use asset			143,480			122,783			116,871
Deposits and other			15,553			16,250			10,858
Deferred tax assets			609			609			2,135
Goodwill			183,374			180,003			168,967
Intangibles, net			122,884			126,267			101,047
Total Assets		$	1,375,064		$	1,347,943		$	1,270,245
LIABILITIES
Current liabilities:
Accounts payable		$	189,772		$	161,140		$	130,417
Accrued expenses			143,127			154,751			134,469
Operating leases - current portion			44,961			40,342			36,593
Income taxes payable			7,204			5,998			7,773
Contingent payment liability - current portion			11,957			3,325			1,153
Accrued incentive compensation			8,909			12,068			7,237
Total current liabilities			405,930			377,624			317,642
Contingent payment liability - long-term portion			9,543			9,975			—
Operating leases - long-term portion			112,988			98,536			96,277
Deferred tax liabilities			9,078			8,606			3,923
Other liabilities			5,169			5,170			10,686
Total Liabilities			542,708			499,911			428,528
STOCKHOLDERS’ EQUITY
Total Steven Madden, Ltd. stockholders’ equity			808,279			829,598			824,516
Noncontrolling interest			24,077			18,434			17,201
Total stockholders’ equity			832,356			848,032			841,717
Total Liabilities and Stockholders’ Equity		$	1,375,064		$	1,347,943		$	1,270,245

STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		Six Months Ended
		June 30, 2024				June 30, 2023
Cash flows from operating activities:
Net income		$	81,510			$	71,859
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation			12,579				12,239
Depreciation and amortization			9,569				7,257
Loss on disposal of fixed assets			75				193
Impairment of intangible			1,700				—
Impairment of lease right-of-use asset			—				95
Accrued interest on note receivable - related party			—				(4	)
Notes receivable - related party			—				204
Change in valuation of contingent payment liability			8,200				—
Other operating activities			238				26
Changes, net of acquisitions, in:
Accounts receivable			2,787				(3,395	)
Factor accounts receivable			(22,988	)			(6,256	)
Inventories			(10,938	)			22,417
Prepaid expenses, income tax receivables, prepaid taxes, and other assets			(4,700	)			(8,572	)
Accounts payable and accrued expenses			18,122				(7,316	)
Accrued incentive compensation			(3,109	)			(4,551	)
Leases and other liabilities			756				(1,939	)
Net cash provided by operating activities			93,801				82,257
Cash flows from investing activities:
Capital expenditures			(9,272	)			(7,793	)
Purchases of short-term investments			(10,510	)			(11,406	)
Maturity/sale of short-term investments			13,485				10,445
Acquisition of business			(4,259	)			—
Other investing activities			371				—
Net cash used in investing activities			(10,185	)			(8,754	)
Cash flows from financing activities:
Common stock repurchased and net settlements of stock awards			(75,549	)			(64,235	)
Proceeds from exercise of stock options			749				870
Investment of noncontrolling interest			—				4,582
Cash dividends paid on common stock			(30,708	)			(31,895	)
Net cash used in financing activities			(105,508	)			(90,678	)
Effect of exchange rate changes on cash and cash equivalents			(2,291	)			518
Net decrease in cash and cash equivalents			(24,183	)			(16,657	)
Cash and cash equivalents – beginning of period			204,640				274,713
Cash and cash equivalents – end of period		$	180,457			$	258,056

STEVEN MADDEN, LTD. AND SUBSIDIARIES

NON-GAAP RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)

The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.  

Table 1 - Reconciliation of GAAP gross profit to Adjusted gross profit
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP gross profit		$	217,129		$	189,870		$	441,944		$	384,962
Non-GAAP Adjustments			126			—			333			—
Adjusted gross profit		$	217,255		$	189,870		$	442,277		$	384,962

Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses
		Three Months Ended								Six Months Ended
		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
GAAP operating expenses		$	163,709			$	145,830			$	328,428			$	294,411
Non-GAAP Adjustments			(958	)			(495	)			(1,623	)			(1,676	)
Adjusted operating expenses		$	162,751			$	145,335			$	326,805			$	292,735

Table 3 - Reconciliation of GAAP income from operations to Adjusted income from operations
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP income from operations		$	46,870		$	44,040		$	103,616		$	90,551
Non-GAAP Adjustments			7,633			495			11,855			1,676
Adjusted income from operations		$	54,503		$	44,535		$	115,471		$	92,227

Table 4 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP provision for income taxes		$	11,276		$	10,923		$	25,015		$	22,668
Non-GAAP Adjustments			1,799			116			2,793			394
Adjusted provision for income taxes		$	13,075		$	11,039		$	27,808		$	23,062

Table 5 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP net income attributable to noncontrolling interest		$	1,572		$	544		$	2,200		$	600
Non-GAAP Adjustments			—			—			130			—
Adjusted net income attributable to noncontrolling interest		$	1,572		$	544		$	2,330		$	600

Table 6 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP net income attributable to Steven Madden, Ltd.		$	35,376		$	34,529		$	79,310		$	71,259
Non-GAAP Adjustments			5,835			378			8,931			1,282
Adjusted net income attributable to Steven Madden, Ltd.		$	41,211		$	34,907		$	88,241		$	72,541
GAAP diluted net income per share		$	0.49		$	0.46		$	1.09		$	0.95
Adjusted diluted net income per share		$	0.57		$	0.47		$	1.22		$	0.96

Table 7 - Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in 2024 outlook
		2024 Outlook
		Low End			High End
GAAP diluted net income per share		$	2.43		$	2.53
Non-GAAP Adjustments			0.12			0.12
Adjusted diluted net income per share		$	2.55		$	2.65

Non-GAAP Adjustments include the items below.

For the second quarter of 2024:

• $0.1 million pre-tax ($0.1 million after-tax) expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses, included in cost of goods sold.
• $1.0 million pre-tax ($0.7 million after-tax) expense in connection with an acquisition and formation of joint ventures, included in operating expenses.
• $6.6 million pre-tax ($5.0 million after-tax) expense in connection with the change in valuation of a contingent consideration in connection with the acquisition of Almost Famous.
  

For the second quarter of 2023:

• $0.5 million pre-tax ($0.4 million after-tax) expense in connection with certain severances and termination benefits, included in operating expenses.
  

Contact

Steven Madden, Ltd.
VP of Corporate Development & Investor Relations
Danielle McCoy
718-308-2611
InvestorRelations@stevemadden.com 

FAQ

What were Steve Madden's Q2 2024 revenue results?

Steve Madden reported Q2 2024 revenue of $523.6 million, a 17.6% increase compared to Q2 2023.

How did Steve Madden's net income perform in Q2 2024?

Steve Madden's net income for Q2 2024 was $35.4 million, or $0.49 per diluted share, compared to $34.5 million, or $0.46 per diluted share in Q2 2023.

What is Steve Madden's outlook for fiscal 2024?

Steve Madden expects fiscal 2024 revenue to increase by 11% to 13% and adjusted diluted EPS to be between $2.55 and $2.65.

How did Steve Madden's wholesale business perform in Q2 2024?

Steve Madden's wholesale business revenue surged by 22.5% to $385.3 million in Q2 2024.

What dividend did Steve Madden announce for Q2 2024?

Steve Madden announced a quarterly cash dividend of $0.21 per share for Q2 2024, payable on September 23, 2024.