Steve Madden Announces Fourth Quarter and Full Year 2015 Results and Provides Initial Fiscal Year 2016 Sales and EPS Guidance

February 24, 2016 at 6:59 AM EST

LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--Feb. 24, 2016-- Steve Madden (Nasdaq:SHOO), a leading designer and marketer of fashion footwear and accessories for women, men and children, today announced financial results for the fourth quarter and full year ended December 31, 2015, and provided initial fiscal year 2016 sales and EPS guidance.

For the Fourth Quarter 2015:

Net sales increased 0.5% to $344.3 million compared to $342.6 million in the same period of 2014.
Gross margin expanded 180 basis points to 36.1% as compared to 34.3% in the same period last year.
Operating expenses as a percentage of sales were 25.7% compared to 25.6% of sales in the same period of 2014.
Operating income totaled $38.7 million, or 11.2% of net sales, compared with operating income of $32.0 million, or 9.3% of net sales, in the same period of 2014.
Net income was $25.7 million, or $0.43 per diluted share, compared to $21.0 million, or $0.34 per diluted share, in the prior year's fourth quarter.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased to have achieved 27% growth in diluted EPS in the fourth quarter despite a challenging retail environment and unfavorable weather that negatively impacted sales of seasonal products like boots and cold weather accessories. Our retail business continued its strong performance with a 6.1% comparable store sales gain, and we delivered solid gross margin improvement in both our wholesale and retail segments in spite of the headwinds from a heavily promotional retail environment. As we move forward, we are cautious about the overall environment but are pleased with the underlying fundamentals in our business, and we remain confident that the strength of our brands, combined with our proven business model, will enable us to drive meaningful earnings growth over the long term.”

Fourth Quarter 2015 Segment Results

Net sales for the wholesale business were $265.0 million in the fourth quarter of 2015 compared to $269.9 million in the fourth quarter of 2014. Gross margin in the wholesale business increased to 28.2% compared to 26.9% in last year’s fourth quarter due to improvement in both the wholesale footwear and wholesale accessories segments.

Retail net sales in the fourth quarter were $79.3 million compared to $72.8 million in the fourth quarter of the prior year. Same store sales increased 6.1% for the fourth quarter. Retail gross margin increased to 62.3% in the fourth quarter of 2015 compared to 61.6% in the fourth quarter of 2014 as a result of reduced promotional activity.

During the fourth quarter, the Company opened one full price store in Mexico and three outlet locations in the United States. The Company ended the quarter with 169 company-operated retail locations, including 121 full price stores, 40 outlets, four Internet stores and four joint venture locations in South Africa.

The effective tax rate for the fourth quarter of 2015 was 34.1% compared to 35.0% in the fourth quarter of the prior year.

Full Year Ended December 31, 2015

For the full year ended December 31, 2015, net sales increased 5.3% to $1.4 billion from $1.3 billion in the prior year.

Net income was $112.9 million, or $1.85 per diluted share, for the year ended December 31, 2015. Net income in 2015 included an after-tax net benefit of $2.0 million related to early lease termination of the Company’s 5th Avenue store location as well as an after-tax loss of $2.0 million related to the partial impairment of the Company’s Wild Pair trademark. Net income was $111.9 million, or $1.76 per diluted share, for the year ended December 31, 2014.

Balance Sheet and Cash Flow

During the fourth quarter of 2015, the Company repurchased 959,124 shares of the Company’s common stock for approximately $31.1 million.

As of December 31, 2015, cash, cash equivalents, and current and non-current marketable securities totaled $193.3 million.

Company Outlook

For fiscal year 2016, the Company expects that net sales will increase 2% to 4% over net sales in 2015. Diluted EPS for fiscal year 2016 is expected to be in the range of $1.93 to $2.03.

Conference Call Information

Interested stockholders are invited to listen to the first quarter earnings conference call scheduled for today, Wednesday, February 24, 2016, at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed by logging onto http://www.stevemadden.com. An online archive of the broadcast will be available within one hour of the conclusion of the call and will be accessible for a period of 30 days following the call. Additionally, a replay of the call can be accessed by dialing 1-877-870-5176 (U.S.) and 1-858-384-5517 (international), passcode 4325735, and will be available until March 24, 2016.

About Steve Madden

Steve Madden designs, sources and markets fashion-forward footwear and accessories for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Report®, Big Buddha®, Brian Atwood®, Cejon®, Blondo® and Mad Love®, Steve Madden is the licensee of various brands, including Superga® for footwear in North America. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden's wholesale distribution includes department stores, specialty stores, luxury retailers, national chains and mass merchants. Steve Madden also operates 169 retail stores (including Steve Madden's four Internet stores). Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including for ready-to-wear, outerwear, intimate apparel, eyewear, hosiery, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s boots, dress shoes, sandals and more, visit http://www.stevemadden.com/

Safe Harbor

This press release and oral statements made from time to time by representatives of the Company contain certain “forward looking statements” as that term is defined in the federal securities laws. The events described in forward looking statements may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of the Company's plans or strategies, projected or anticipated benefits from acquisitions to be made by the Company, or projections involving anticipated revenues, earnings or other aspects of the Company's operating results. The words "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions are intended to identify forward looking statements. The Company cautions you that these statements concern current expectations about the Company’s future results and condition and are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond the Company's control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors which may affect the Company's results include, but are not limited to, the risks and uncertainties discussed in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission. Any one or more of these uncertainties, risks and other influences could materially affect the Company's results of operations and financial condition and whether forward looking statements made by the Company ultimately prove to be accurate and, as such, the Company's actual results, performance and achievements could differ materially from those expressed or implied in these forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.


STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended				Twelve Months Ended
	December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014

Net sales	$	344,250	$	342,620	$	1,405,239	$	1,334,951
Cost of sales		220,053		225,125		904,747		865,951
Gross profit		124,197		117,495		500,492		469,000
Commission and licensing fee income, net		2,959		2,262		16,647		13,723
Operating expenses		88,456		87,753		342,446		315,081
Impairment charge		-		-		3,045		-
Income from operations		38,700		32,004		171,648		167,642
Interest and other income, net		547		533		818		3,751
Income before provision for income taxes		39,247		32,537		172,466		171,393
Provision for income taxes		13,382		11,388		58,811		58,764
Net income		25,865		21,149		113,655		112,629
Net income (loss) attributable to noncontrolling interest		139		156		717		749
Net income attributable to Steven Madden, Ltd.	$	25,726	$	20,993	$	112,938	$	111,880


Basic income per share	$	0.44	$	0.35	$	1.91	$	1.82
Diluted income per share	$	0.43	$	0.34	$	1.85	$	1.76

Basic weighted average common shares
outstanding		58,186		60,012		58,997		61,451
Diluted weighted average common shares
outstanding		60,028		62,167		61,142		63,676


STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)

	As of
	December 31, 2015		December 31, 2014
	(Unaudited)
Cash and cash equivalents	$	72,414	$	81,450
Marketable securities (current & non current)		120,889		121,644
Accounts receivables, net		198,384		194,594
Inventories		102,080		92,677
Other current assets		54,841		42,307
Property and equipment, net		72,010		68,905
Goodwill and intangibles, net		286,855		294,416
Other assets		9,236		15,242
Total assets	$	916,709	$	911,235

Accounts payable	$	79,790	$	92,635
Contingent payment liability (current & non current)		24,775		38,633
Other current liabilities		79,940		73,501
Other long term liabilities		53,541		36,937
Total Steven Madden, Ltd. stockholders' equity		678,404		669,255
Noncontrolling interest		259		274
Total liabilities and stockholders' equity	$	916,709	$	911,235


STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
(Unaudited)

	Twelve Months Ended
	December 31, 2015			December 31, 2014


Net cash provided by operating activities	$	134,720		$	151,975

Investing Activities
Purchases of property and equipment		(19,459	)		(18,341	)
Sales (purchases) of marketable securities, net		(5,538	)		(8,685	)
Repayment of notes receivable		466			893
Acquisitions, net of cash acquired		(9,129	)		(81,885	)
Net cash used in investing activities		(33,660	)		(108,018	)

Financing Activities
Common stock share repurchases for treasury		(135,637	)		(142,228	)
Payment of contingent liability		(6,270	)		(8,475	)
Proceeds from exercise of stock options		21,301			4,943
Tax benefit from the exercise of stock options		10,510			2,978
Net cash provided by financing activities		(110,096	)		(142,782	)

Net decrease in cash and cash equivalents		(9,036	)		(98,825	)

Cash and cash equivalents - beginning of period		81,450			180,275

Cash and cash equivalents - end of period	$	72,414		$	81,450

View source version on businesswire.com: http://www.businesswire.com/news/home/20160224005343/en/

Source: Steve Madden

ICR, Inc.
Investor Relations
Jean Fontana/Megan Crudele
203-682-8200
www.icrinc.com

News Release

Steve Madden Announces Fourth Quarter and Full Year 2015 Results and Provides Initial Fiscal Year 2016 Sales and EPS Guidance