Steve Madden Announces First Quarter 2024 Results

May 1, 2024 at 6:59 AM EDT

LONG ISLAND CITY, N.Y., May 01, 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 first quarter ended March 31, 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.

First Quarter 2024 Results

  • Revenue increased 19.1% to $552.4 million, compared to $463.8 million in the same period of 2023.
  • Gross profit as a percentage of revenue was 40.7%, compared to 42.1% in the same period of 2023. Adjusted gross profit as a percentage of revenue was 40.7% in 2024.
  • Operating expenses as a percentage of revenue were 30.1%, compared to 32.0% in the same period of 2023. Adjusted operating expenses as a percentage of revenue were 29.7%, compared to 31.8% in the same period of 2023.
  • Income from operations totaled $56.7 million, or 10.3% of revenue, compared to $46.5 million, or 10.0% of revenue, in the same period of 2023. Adjusted income from operations totaled $61.0 million, or 11.0% of revenue, compared to $47.7 million, or 10.3% of revenue, in the same period of 2023.
  • Net income attributable to Steven Madden, Ltd. was $43.9 million, or $0.60 per diluted share, compared to $36.7 million, or $0.48 per diluted share, in the same period of 2023. Adjusted net income attributable to Steven Madden, Ltd. was $47.0 million, or $0.65 per diluted share, compared to $37.6 million, or $0.50 per diluted share, in the same period of 2023.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We got off to a strong start to 2024, with first quarter revenue increasing 19% and Adjusted diluted EPS rising 30% compared to the same period in 2023. We also demonstrated tangible progress on our key strategic initiatives, with double-digit percentage revenue growth in international markets, non-footwear categories and direct-to-consumer channels as well as a return to year-over-year revenue growth in the U.S. wholesale footwear business. Looking ahead, we are confident that the continued execution of our strategy will enable us to drive sustainable revenue and earnings growth and create significant value for our stakeholders over the long term.”

First Quarter 2024 Channel Results

Revenue for the wholesale business was $438.2 million, a 21.0% increase compared to the first quarter of 2023. Excluding the newly acquired Almost Famous, wholesale revenue increased 9.7%. Wholesale footwear revenue increased 4.7%. Wholesale accessories/apparel revenue increased 78.6%, or 27.4% excluding Almost Famous. Gross profit as a percentage of wholesale revenue was 35.1%, compared to 37.0% in the first quarter of 2023 driven primarily by the impact of Almost Famous and a mix shift in wholesale footwear to the private label business.

Direct-to-consumer revenue was $112.3 million, a 12.8% increase compared to the first quarter of 2023 driven by increases in both the brick-and-mortar and e-commerce businesses. Gross profit as a percentage of direct-to-consumer revenue increased to 61.9%, compared to 59.2% in the first quarter of 2023 driven by reduced promotional activity.

The Company ended the quarter with 253 brick-and-mortar retail stores and five e-commerce websites, as well as 25 company-operated concessions in international markets.

Balance Sheet and Cash Flow Highlights

As of March 31, 2024, cash, cash equivalents and short-term investments totaled $143.1 million. Inventory totaled $202.0 million, compared to $179.9 million at the end of the first quarter of 2023.

During the first quarter of 2024, the Company spent $37.3 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 June 21, 2024 to stockholders of record as of the close of business on June 10, 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 $2.51 to $2.61. 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, May 1, 2024, at 8:30 a.m. Eastern Time, which will include a discussion of the Company's first 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/s9ph66uj 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 retention and hiring 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
    March 31, 2024   March 31, 2023
         
Net sales   $ 550,567     $ 461,737  
Licensing fee income     1,814       2,097  
Total revenue     552,381       463,834  
Cost of sales     327,566       268,742  
Gross profit     224,815       195,092  
Operating expenses     166,369       148,581  
Impairment of intangible     1,700        
Income from operations     56,746       46,511  
Interest and other income, net     1,555       2,020  
Income before provision for income taxes     58,301       48,531  
Provision for income taxes     13,739       11,745  
Net income     44,562       36,786  
Less: net income attributable to noncontrolling interest     628       56  
Net income attributable to Steven Madden, Ltd.   $ 43,934     $ 36,730  
         
Basic income per share   $ 0.61     $ 0.49  
         
Diluted income per share   $ 0.60     $ 0.48  
         
Basic weighted average common shares outstanding     72,292       74,498  
         
Diluted weighted average common shares outstanding     72,865       75,855  
         
Cash dividends declared per common share   $ 0.21     $ 0.21  


STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
        As of    
    March 31, 2024   December 31, 2023   March 31, 2023
    (Unaudited)       (Unaudited)
ASSETS            
Current assets:            
Cash and cash equivalents   $ 131,501     $ 204,640     $ 209,979  
Short-term investments     11,556       15,173       13,740  
Accounts receivable, net of allowances     44,457       40,246       46,138  
Factor accounts receivable     380,613       320,723       283,893  
Inventories     201,960       228,990       179,937  
Prepaid expenses and other current assets     28,324       29,009       22,267  
Income tax receivable and prepaid income taxes     8,883       16,051       12,079  
Total current assets     807,294       854,832       768,033  
Note receivable - related party                 301  
Property and equipment, net     47,490       47,199       41,519  
Operating lease right-of-use asset     127,464       122,783       112,501  
Deposits and other     15,991       16,250       11,750  
Deferred tax assets     609       609       1,963  
Goodwill     180,869       180,003       168,228  
Intangibles, net     124,436       126,267       100,826  
Total Assets   $ 1,304,153     $ 1,347,943     $ 1,205,121  
LIABILITIES            
Current liabilities:            
Accounts payable   $ 170,154     $ 161,140     $ 101,678  
Accrued expenses     109,173       154,751       112,395  
Operating leases - current portion     40,020       40,342       33,977  
Income taxes payable     4,474       5,998       3,934  
Contingent payment liability - current portion     3,738       3,325       1,153  
Accrued incentive compensation     4,953       12,068       4,105  
Total current liabilities     332,512       377,624       257,242  
Contingent payment liability - long-term portion     11,212       9,975        
Operating leases - long-term portion     102,637       98,536       95,797  
Deferred tax liabilities     9,016       8,606       3,923  
Other liabilities     5,169       5,170       10,461  
Total Liabilities     460,546       499,911       367,423  
             
STOCKHOLDERS’ EQUITY            
Total Steven Madden, Ltd. stockholders’ equity     825,236       829,598       821,042  
Noncontrolling interest     18,371       18,434       16,656  
Total stockholders’ equity     843,607       848,032       837,698  
Total Liabilities and Stockholders’ Equity   $ 1,304,153     $ 1,347,943     $ 1,205,121  


STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)
 
    Three Months Ended
    March 31, 2024   March 31, 2023
Cash flows from operating activities:        
Net income   $ 44,562     $ 36,786  
Adjustments to reconcile net income to net cash provided by operating activities:        
Stock-based compensation     5,738       6,139  
Depreciation and amortization     4,631       3,366  
Loss on disposal of fixed assets     74       15  
Impairment of intangible     1,700        
Impairment of lease right-of-use asset           95  
Deferred taxes     410        
Accrued interest on note receivable - related party           (2 )
Notes receivable - related party           102  
Change in valuation of contingent payment liabilities     1,650        
Other operating activities     861       623  
Changes, net of acquisitions, in:        
Accounts receivable     (5,681 )     (8,201 )
Factor accounts receivable     (60,006 )     (35,665 )
Inventories     28,398       47,710  
Prepaid expenses, income tax receivables, prepaid taxes, and other assets     6,539       4,791  
Accounts payable and accrued expenses     (37,160 )     (60,461 )
Accrued incentive compensation     (7,115 )     (7,683 )
Leases and other liabilities     (306 )     (890 )
Net cash used in operating activities     (15,705 )     (13,275 )
         
Cash flows from investing activities:        
Capital expenditures     (3,979 )     (3,791 )
Purchases of short-term investments     (790 )     (6,722 )
Maturity/sale of short-term investments     4,084       8,087  
Acquisition of business     (4,259 )      
Other investing activities     326        
Net cash used in investing activities     (4,618 )     (2,426 )
         
Cash flows from financing activities:        
Common stock repurchased and net settlements of stock awards     (37,337 )     (38,451 )
Proceeds from exercise of stock options     222       264  
Investment of noncontrolling interest           4,486  
Cash dividends paid on common stock     (15,416 )     (16,039 )
Net cash used in financing activities     (52,531 )     (49,740 )
Effect of exchange rate changes on cash and cash equivalents     (285 )     707  
Net decrease in cash and cash equivalents     (73,139 )     (64,734 )
Cash and cash equivalents – beginning of period     204,640       274,713  
Cash and cash equivalents – end of period   $ 131,501     $ 209,979  


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
    March 31, 2024   March 31, 2023
         
GAAP gross profit   $ 224,815     $ 195,092  
Non-GAAP Adjustments     208        
Adjusted gross profit   $ 225,023     $ 195,092  


Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses
    Three Months Ended
    March 31, 2024   March 31, 2023
         
GAAP operating expenses   $ 166,369     $ 148,581  
Non-GAAP Adjustments     (2,314 )     (1,181 )
Adjusted operating expenses   $ 164,055     $ 147,400  


Table 3 - Reconciliation of GAAP income from operations to Adjusted income from operations
    Three Months Ended
    March 31, 2024   March 31, 2023
         
GAAP income from operations   $ 56,746     $ 46,511  
Non-GAAP Adjustments     4,222       1,181  
Adjusted income from operations   $ 60,968     $ 47,692  


Table 4 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
    Three Months Ended
    March 31, 2024   March 31, 2023
         
GAAP provision for income taxes   $ 13,739     $ 11,745  
Non-GAAP Adjustments     995       278  
Adjusted provision for income taxes   $ 14,734     $ 12,023  


Table 5 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
    Three Months Ended
    March 31, 2024   March 31, 2023
         
GAAP net income attributable to noncontrolling interest   $ 628     $ 56  
Non-GAAP Adjustments     130        
Adjusted net income attributable to noncontrolling interest   $ 758     $ 56  


Table 6 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
    Three Months Ended
    March 31, 2024   March 31, 2023
         
GAAP net income attributable to Steven Madden, Ltd.   $ 43,934     $ 36,730  
Non-GAAP Adjustments     3,097       904  
Adjusted net income attributable to Steven Madden, Ltd.   $ 47,031     $ 37,634  
         
GAAP diluted net income per share   $ 0.60     $ 0.48  
         
Adjusted diluted net income per share   $ 0.65     $ 0.50  


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   $ 2.51     $ 2.61  
Non-GAAP Adjustments     0.04       0.04  
Adjusted diluted net income per share   $ 2.55     $ 2.65  

Non-GAAP Adjustments include the items below.

For the first quarter of 2024 and 2024 outlook:

  • $0.2 million pre-tax ($0.2 million after-tax) expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses, included in cost of goods sold.
  • $0.7 million pre-tax ($0.5 million after-tax) expense in connection with an acquisition and formation of joint ventures, included in operating expenses.
  • $1.7 million pre-tax ($1.3 million after-tax) expense in connection with the change in valuation of contingent consideration in connection with the acquisition of Almost Famous, included in operating expenses.
  • $1.7 million pre-tax ($1.3 million after-tax) expense in connection with a trademark impairment.

For the first quarter of 2023:

  • $1.2 million pre-tax ($0.9 million after-tax) expense in connection with certain severances, termination benefits, and a corporate office relocation, 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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