Steve Madden Announces Second Quarter 2024 Results

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.comwww.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 


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