Steve Madden Announces Fourth Quarter and Full Year 2021 Results

February 24, 2022 at 6:59 AM EST

~ Increases Quarterly Cash Dividend ~

LONG ISLAND CITY, N.Y., Feb. 24, 2022 (GLOBE NEWSWIRE) -- Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children, today announced financial results for the fourth quarter and full year ended December 31, 2021.

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

Fourth Quarter 2021 Review

  • Revenue increased 63.9% to $578.5 million compared to $353.0 million in the same period of 2020.
  • Gross profit as a percentage of revenue increased to 41.2% compared to 38.3% in the same period of 2020. Adjusted gross profit as a percentage of revenue was 38.2% in fourth quarter 2020.
  • Operating expenses as a percentage of revenue decreased to 27.0% compared to 31.8% in the same period of 2020. Adjusted operating expenses as a percentage of revenue decreased to 26.2% compared to 30.9% in fourth quarter 2020.
  • Income from operations was $79.4 million, or 13.7% of revenue, compared to $21.3 million, or 6.0% of revenue, in the same period of 2020. Adjusted income from operations was $86.9 million, or 15.0% of revenue, compared to $25.6 million, or 7.3% of revenue, in fourth quarter 2020.
  • Net income attributable to Steven Madden, Ltd. was $66.0 million, or $0.81 per diluted share, compared to $22.6 million, or $0.28 per diluted share, in the same period of 2020. Adjusted net income attributable to Steven Madden, Ltd. was $70.4 million, or $0.87 per diluted share, compared to $21.8 million, or $0.27 per diluted share, in fourth quarter 2020.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We delivered outstanding results in the fourth quarter, with revenue increasing 38% and diluted EPS more than doubling compared to 2019 – performance that reflects the strength of our brands and the robust consumer demand for the on-trend merchandise assortments created by Steve and our design teams. The exceptional momentum in our direct-to-consumer business continued, with revenue up 63% compared to 2019, and our wholesale business accelerated significantly, with revenue increasing 31% compared to 2019.

“Overall, 2021 was a record year for Steve Madden, as we recorded the highest annual revenue and earnings in our history. Looking ahead, we are confident that, by building on the strong momentum in our business and continuing the disciplined execution of our strategic initiatives, we can drive robust top- and bottom-line growth in 2022 and beyond.”

Fourth Quarter 2021 Segment Results

Revenue for the wholesale business was $410.5 million, a 56.1% increase compared to the fourth quarter of 2020, with a 61.9% increase in wholesale footwear and a 41.7% increase in wholesale accessories/apparel. Gross profit as a percentage of wholesale revenue rose to 31.8% compared to 28.3% in the fourth quarter of 2020.

Direct-to-consumer revenue was $164.7 million, a 91.3% increase compared to the fourth quarter of 2020. Gross profit as a percentage of retail revenue declined to 63.5% compared to 66.2% in the fourth quarter of 2020. Adjusted gross profit as a percentage of direct-to-consumer revenue was 65.6% in fourth quarter of 2020.

The Company ended the quarter with 214 brick-and-mortar retail stores and 6 e-commerce websites, as well as 17 company-operated concessions in international markets.

Full Year Ended December 31, 2021 Review

For the full year ended December 31, 2021, revenue increased 55.3% to $1.9 billion from $1.2 billion in 2020.

Net income attributable to Steven Madden, Ltd. was $190.7 million, or $2.34 per diluted share, for the year ended December 31, 2021 compared to a net loss attributable to Steven Madden, Ltd. of ($18.4) million, or ($0.23) per basic share, for the year ended December 31, 2020. On an Adjusted basis, net income attributable to Steven Madden, Ltd. was $203.7 million, or $2.50 per diluted share, for the year ended December 31, 2021 compared to net income attributable to Steven Madden, Ltd. of $51.8 million, or $0.64 per diluted share, for the year ended December 31, 2020.

Balance Sheet and Cash Flow

As of December 31, 2021, cash, cash equivalents and short-term investments totaled $263.5 million.

During the fourth quarter of 2021, the Company repurchased 1,038,061 shares of the Company's common stock for approximately $48.5 million, which includes shares acquired through the net settlement of employee stock awards. For the full year ended December 31, 2021, the Company repurchased 2,841,405 shares of the Company's common stock for approximately $123.2 million, which includes shares acquired through the net settlement of employee stock awards.

Increased Quarterly Cash Dividend

The Company's Board of Directors approved a quarterly cash dividend of $0.21 per share, reflecting a 40% increase over the previous quarterly dividend. The dividend is payable on March 25, 2022 to stockholders of record as of the close of business on March 11, 2022.

Fiscal 2022 Outlook

For fiscal 2022, the Company expects revenue will increase 10% to 13% over fiscal 2021. The Company expects diluted EPS will be in the range of $2.66 to $2.76. The Company expects Adjusted diluted EPS will be in the range of $2.73 to $2.83.

Conference Call Information

Interested stockholders are invited to listen to the conference call scheduled for today, February 24, 2022 at 8:30 a.m. Eastern Time relating to fourth quarter and fiscal year 2021 earnings and fiscal 2022 outlook. The call will be broadcast live over the Internet and can be accessed by logging onto https://investor.stevemadden.com. An online archive of the broadcast will be available within two hours of the conclusion of the call and will remain available for 12 months following the live call.

About Steve Madden

Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo®, GREATS®, BB Dakota® and Mad Love®, Steve Madden is a licensee of various brands, including Anne Klein® and Superga®. 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 operates retail stores and e-commerce websites. Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including outerwear, eyewear, hosiery, jewelry, hair accessories, sunglasses, swimwear, activewear, fragrance, luggage, bedding and bath products as well as other select product categories. For local store information and the latest Steve Madden boots, booties, dress shoes, fashion sneakers, sandals, slippers and more, please visit www.stevemadden.com.

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:

  • the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or the ongoing COVID-19 pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
  • 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;
  • 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;
  • 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 meet the Company’s quality standards;
  • 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;
  • disruptions to product delivery systems and the Company’s ability to properly manage inventory;
  • the Company’s ability to adequately protect its trademarks and other intellectual property rights;
  • 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;
  • 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 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 STATEMENT OF OPERATIONS DATA
 
(In thousands, except per share amounts)
 
    Three Months Ended   Twelve Months Ended
    December 31, 2021   December 31, 2020   December 31, 2021   December 31, 2020
    (Unaudited)   (Unaudited)   (Unaudited)    
Net sales   $ 575,137     $ 349,066     $ 1,853,902     $ 1,188,943  
Commission and licensing fee income     3,344       3,901       12,240       12,871  
Total revenue     578,481       352,967       1,866,142       1,201,814  
Cost of sales     340,141       217,655       1,098,645       737,273  
Gross profit     238,340       135,312       767,497       464,541  
Operating expenses     155,960       112,224       519,848       414,978  
Impairment of intangibles     2,620       1,745       2,620       44,273  
Impairment of lease right-of-use assets and fixed assets     343             1,432       36,895  
Income / (loss) from operations     79,417       21,343       243,597       (31,605 )
Interest and other (expense) / income, net     (513 )     129       (1,529 )     1,620  
Income / (loss) before provision / (benefit) for income taxes     78,904       21,472       242,068       (29,985 )
Provision / (benefit) for income taxes     12,781       (2,338 )     49,609       (11,704 )
Net income / (loss)     66,123       23,810       192,459       (18,281 )
Less: net income attributable to noncontrolling interest     136       1,219       1,781       116  
Net income / (loss) attributable to Steven Madden, Ltd.   $ 65,987     $ 22,591     $ 190,678     $ (18,397 )
                 
Basic income / (loss) per share   $ 0.85     $ 0.29     $ 2.43     $ (0.23 )
                 
Diluted income / (loss) per share   $ 0.81     $ 0.28     $ 2.34     $ (0.23 )
                 
Basic weighted average common shares outstanding     77,718       78,588       78,442       78,635  
                 
Diluted weighted average common shares outstanding     81,207       81,414       81,628       78,635  
                 
Cash dividends declared per common share   $ 0.15     $     $ 0.60     $ 0.15  



STEVEN MADDEN, LTD. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEET DATA
 
(In thousands)
 
    As of    
    December 31, 2021   December 31, 2020
    (Unaudited)    
ASSETS        
Current assets:        
Cash and cash equivalents   $ 219,499   $ 247,864
Short-term investments     44,037     39,302
Accounts receivable, net of allowances     26,546     25,044
Factor accounts receivable     364,982     252,671
Inventories     255,213     101,420
Prepaid expenses and other current assets     20,845     17,415
Income tax receivable and prepaid income taxes     13,538     14,525
Total current assets     944,660     698,241
Note receivable – related party     794     1,180
Property and equipment, net     35,790     43,268
Operating lease right-of-use asset     85,449     101,379
Deferred tax assets     4,581     5,415
Deposits and other     4,180     4,822
Goodwill – net     167,995     168,265
Intangibles – net     112,093     115,191
Total Assets   $ 1,355,542   $ 1,137,761
LIABILITIES        
Current liabilities:        
Accounts payable   $ 136,766   $ 73,904
Accrued expenses     243,163     118,083
Operating leases - current portion     30,759     34,257
Income taxes payable     4,522     5,799
Contingent payment liability – current portion     5,109    
Accrued incentive compensation     14,871     3,873
Total current liabilities     435,190     235,916
Contingent payment liability     6,960     207
Operating leases – long-term portion     80,072     98,592
Deferred tax liabilities     3,378     2,562
Other liabilities     9,404     10,115
Total Liabilities     535,004     347,392
STOCKHOLDERS’ EQUITY        
Total Steven Madden, Ltd. stockholders’ equity     812,098     776,586
Noncontrolling interest     8,440     13,783
Total stockholders’ equity     820,538     790,369
Total Liabilities and Stockholders’ Equity   $ 1,355,542   $ 1,137,761



STEVEN MADDEN, LTD. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED CASH FLOW DATA
 
(In thousands)
 
    Twelve Months Ended
    December 31, 2021   December 31, 2020
    (Unaudited)    
Cash flows from operating activities:        
Net income/(loss)   $ 192,459     $ (18,281 )
Adjustments to reconcile net income/(loss) to net cash provided by operating activities        
Stock-based compensation     22,278       22,639  
Depreciation and amortization     15,208       17,360  
Loss on disposal of fixed assets     526       561  
Impairment of intangibles     2,620       44,273  
Impairment of lease right-of-use asset and fixed assets     1,432       36,895  
Deferred taxes     1,280       (8,353 )
Accrued interest on note receivable – related party     (23 )     (31 )
Note receivable – related party     409       409  
Change in valuation of contingent liability     11,862       (8,917 )
Gain on sale of trademark     (8,000 )      
Recovery of receivables, related to the Payless ShoeSource bankruptcy     (919 )      
Changes, net of acquisitions, in:        
Accounts receivable     (583 )     13,122  
Factor accounts receivable     (112,311 )     (36,200 )
Inventories     (153,793 )     35,476  
Prepaid expenses, income tax receivables, prepaid taxes, and other current assets     (1,899 )     (10,129 )
Accounts payable and accrued expenses     185,741       (34,207 )
Accrued incentive compensation     10,998       (7,061 )
Leases and other liabilities     (7,822 )     (3,350 )
     Net cash provided by operating activities     159,463       44,206  
         
Cash flows from investing activities:        
Capital expenditures     (6,608 )     (6,562 )
Purchases of short-term investments     (68,471 )     (73,792 )
Maturity/sale of marketable securities and short-term investments     63,867       75,470  
Proceeds from sale of a trademark     8,000        
     Net cash used in investing activities     (3,212 )     (4,884 )
         
Cash flows from financing activities:        
Proceeds from exercise of stock options     9,732       1,609  
Investment of noncontrolling interest           359  
Acquisition of incremental ownership of joint ventures     (18,942 )      
Distributions to noncontrolling interest earnings     (3,121 )      
Common stock purchased for treasury     (123,161 )     (46,583 )
Cash dividends paid on common stock     (49,161 )     (12,459 )
Advances from factor           176,784  
Repayments of advances from factor           (176,784 )
   Net cash used in financing activities     (184,653 )     (57,074 )
Effect of exchange rate changes on cash and cash equivalents     37       1,515  
   Net decrease in cash, cash equivalents     (28,365 )     (16,237 )
Cash and cash equivalents – beginning of year     247,864       264,101  
Cash and cash equivalents – end of year   $ 219,499     $ 247,864  



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   Twelve Months Ended
    December 31, 2021     December 31, 2020   December 31, 2021     December 31, 2020
GAAP gross profit   $ 238,340     $ 135,312     $ 767,497     $ 464,541  
Non-GAAP Adjustments           (532 )           (532 )
Adjusted gross profit   $ 238,340     $ 134,780     $ 767,497     $ 464,009  


Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses
    Three Months Ended   Twelve Months Ended
    December 31, 2021   December 31, 2020   December 31, 2021   December 31, 2020
GAAP operating expenses   $ 155,960     $ 112,224     $ 519,848     $ 414,978  
Non-GAAP Adjustments     (4,499 )     (3,038 )     (14,216 )     (15,985 )
Adjusted operating expenses   $ 151,461     $ 109,186     $ 505,632     $ 398,993  


Table 3 - Reconciliation of GAAP income / (loss) from operations to Adjusted income from operations
    Three Months Ended     Twelve Months Ended
    December 31, 2021     December 31, 2020     December 31, 2021     December 31, 2020
GAAP income / (loss) from operations   $ 79,417     $ 21,343     $ 243,597     $ (31,605 )
Non-GAAP Adjustments     7,462       4,251       18,267       96,621  
Adjusted income from operations   $ 86,879     $ 25,594     $ 261,864     $ 65,016  


Table 4 - Reconciliation of GAAP interest and other (expense) / income, net to Adjusted interest and other (expense) / income, net
    Three Months Ended     Twelve Months Ended
    December 31, 2021   December 31, 2020     December 31, 2021   December 31, 2020
GAAP interest and other (expense) / income, net   $ (513 )   $ 129     $ (1,529 )   $ 1,620  
Non-GAAP Adjustments                 500        
Adjusted interest and other (expense) / income, net   $ (513 )   $ 129     $ (1,029 )   $ 1,620  


Table 5 - Reconciliation of GAAP provision / (benefit) for income taxes to Adjusted provision for income taxes
    Three Months Ended   Twelve Months Ended
    December 31, 2021     December 31, 2020   December 31, 2021     December 31, 2020
GAAP provision / (benefit) for income taxes   $ 12,781     $ (2,338 )   $ 49,609     $ (11,704 )
Non-GAAP Adjustments     3,015       5,763       5,726       25,453  
Adjusted provision for income taxes   $ 15,796     $ 3,425     $ 55,335     $ 13,749  


Table 6 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
    Three Months Ended   Twelve Months Ended
    December 31, 2021     December 31, 2020   December 31, 2021     December 31, 2020
GAAP net income attributable to noncontrolling interest   $ 136     $ 1,219     $ 1,781     $ 116  
Non-GAAP Adjustments     13       (698 )     37       933  
Adjusted net income attributable to noncontrolling interest   $ 149     $ 521     $ 1,818     $ 1,049  

       

Table 7 - Reconciliation of GAAP net income / (loss) attributable to Steve Madden, Ltd. to Adjusted net income attributable to Steve Madden, Ltd.
    Three Months Ended   Twelve Months Ended
    December 31, 2021     December 31, 2020   December 31, 2021     December 31, 2020
GAAP net income / (loss) attributable to Steven Madden, Ltd.   $ 65,987     $ 22,591     $ 190,678     $ (18,397 )
Non-GAAP Adjustments     4,433       (814 )     13,004       70,233  
Adjusted net income attributable to Steven Madden, Ltd.   $ 70,420     $ 21,777     $ 203,682     $ 51,836  
                     
GAAP diluted income / (loss) per share   $ 0.81     $ 0.28     $ 2.34     $ (0.23 )
Adjusted diluted income per share   $ 0.87     $ 0.27     $ 2.50     $ 0.64  

Non-GAAP Adjustments include the items below.

For the fourth quarter 2021:

  • $4.0 million pre-tax ($3.1 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $2.6 million pre-tax ($2.0 million after-tax) expense in connection with the impairment of a trademark.
  • $0.4 million pre-tax ($0.2 million after-tax) expense in connection with a sublease and related exit costs, included in operating expenses.
  • $0.3 million pre-tax ($0.3 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets.
  • $0.1 million pre-tax ($0.1 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
  • $1.3 million tax benefit in connection with the release of a liability for an uncertain tax position.

For the fourth quarter 2020:

  • $5.1 million pre-tax ($3.9 million after-tax) expense in connection with rent restructuring of various leases, included in operating expenses.
  • $1.7 million pre-tax ($1.4 million after-tax) expense in connection with the impairment of a trademark.
  • $1.2 million pre-tax ($0.9 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $1.1 million pre-tax ($0.9 million after-tax) benefit in connection with the recovery from the Payless ShoeSource bankruptcy, included in operating expenses.
  • $0.5 million pre-tax ($0.4 million after-tax) benefit in connection with the termination of a joint venture, included in cost of goods sold.
  • $0.2 million pre-tax ($0.2 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
  • $4.2 million tax benefit in connection with the net operating loss carryback provision of the CARES Act.
  • $0.5 million tax benefit in connection with the tax treatment of a prior-year bad debt.
  • $0.7 million benefit in connection with adjustments attributable to noncontrolling interest.

For the fiscal year 2021:

  • $11.9 million pre-tax ($9.1 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $9.9 million pre-tax ($7.4 million after-tax) expense in connection with rent restructuring of various leases, included in operating expenses.
  • $8.0 million pre-tax ($6.1 million after-tax) benefit in connection with the sale of a trademark, included in operating expenses.
  • $2.6 million pre-tax ($2.0 million after-tax) expense in connection with the impairment of a trademark.
  • $1.5 million pre-tax ($1.2 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
  • $1.4 million pre-tax ($0.9 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets.
  • $0.9 million pre-tax ($0.7 million after-tax) benefit in connection with a recovery in connection with the Payless ShoeSource bankruptcy, included in operating expenses.
  • $0.5 million pre-tax ($0.4 million after-tax) expense in connection with the write-off of an investment, included in interest and other (expense) / income, net.
  • $1.3 million tax benefit in connection with the release of a liability for an uncertain tax position.

For the fiscal year 2020:

  • $44.3 million pre-tax ($33.8 million after-tax) expense in connection with the impairment of certain trademarks.
  • $36.9 million pre-tax ($27.9 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets.
  • $13.5 million pre-tax ($10.3 million after-tax) expense in connection with rent restructuring of various leases, included in operating expenses.
  • $7.1 million pre-tax ($5.4 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
  • $6.2 million pre-tax ($4.8 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $2.0 million pre-tax ($1.5 million after-tax) expense in connection with benefits provided to furloughed employees, included in operating expenses.
  • $1.1 million pre-tax ($0.9 million after-tax) benefit in connection with the recovery from the Payless ShoeSource bankruptcy, included in operating expenses.
  • $0.7 million pre-tax ($0.5 million after-tax) expense in connection with a provision for a loan receivable, included in operating expenses.
  • $0.5 million pre-tax ($0.4 million after-tax) benefit in connection with the termination of a joint venture, included in cost of goods sold.
  • $0.9 million loss in connection with adjustments attributable to noncontrolling interest.
  • $4.2 million tax benefit in connection with the net operating loss carryback provision of the CARES Act.
  • $1.9 million net tax expense in connection with deferred and foreign uncertain tax position adjustments.

For the fiscal year 2022 outlook:

  • $7.1 million pre-tax ($5.3 million after-tax) expense in connection with the accelerated amortization of a trademark.

Contact

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


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