Steve Madden Announces Third Quarter 2010 Earnings Results

Raises Fiscal 2010 Guidance

LONG ISLAND CITY, N.Y., Nov 02, 2010 (BUSINESS WIRE) -- 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 third quarter ended September 30, 2010.

• Third quarter net sales increased 31.4% to $184.1 million.
• Operating margin was 20.3% of sales in the third quarter of 2010, compared with operating margin of 20.2% in the same period of 2009.
• Third quarter net income increased 28.5% to $22.9 million, or $0.81 per diluted share, compared to $17.8 million, or $0.64 per diluted share, in the prior year's third quarter.

"We are pleased to once again report the highest quarterly sales and earnings in our Company's history. Our results for the third quarter of 2010 were driven by the ongoing strength of our core business, continued momentum in our international segment and meaningful contributions from a number of our newer brands including Big Buddha and Madden," commented Edward Rosenfeld, Chairman and Chief Executive Officer. "In addition, our recently acquired Betsey Johnson brand offers tremendous growth potential and is a great complement to our current brand portfolio. Looking ahead, we are excited about the initiatives we have in place and feel confident that we can continue to drive top and bottom line growth."

Third Quarter 2010 Results

Third quarter net sales were $184.1 million compared to $140.1 million reported in the comparable period of 2009. Net sales from the wholesale business were $153.1 million compared to $112.0 million in the third quarter of 2009, a 36.7% increase driven by strong gains in Madden Girl, Steve Madden Men's, and the international business, as well as by the sales contributions from Big Buddha and Madden. Sales also benefited from the transition of one of the Company's mass merchant customers from a buying agency model to a selling agency model. Retail net sales grew 10.2% to $31.1 million from $28.2 million in the third quarter of the prior year. Sales were driven by an increase in same store sales of 15.7%, partially offset by six net store closings since the third quarter of 2009.

Gross margin was 42.1% in the third quarter as compared to 44.0% in the comparable period of 2009, reflecting a decline in the wholesale segment gross margin partially offset by margin improvement in the retail segment. Gross margin in the wholesale business decreased to 38.8% in the third quarter from 41.2% in the prior year's third quarter driven by (i) mix shifts, including the growth of the international business and the inclusion of the results of the Company's footwear business with one its mass merchant customers in the sales line and (ii) an increase in off-price sales. Retail gross margin increased to 58.1% for the third quarter from 55.2% in the comparable period of the prior year as a result of strong full-price selling and reduced discounting.

Operating expenses as a percent of sales declined to 25.4% for the third quarter compared to 27.9% in the same period of the prior year, due to leverage on higher sales.

Operating income for the third quarter increased to $37.4 million, or 20.3% of net sales, compared with operating income of $28.3 million, or 20.2% of net sales, in the same period of 2009.

Third quarter net income increased 28.5% to $22.9 million, or $0.81 per diluted share, compared to $17.8 million, or $0.64 per diluted share in the prior year's third quarter.

During the third quarter of 2010, the Company closed 2 stores, ending the quarter with 82 retail locations, including the Internet store.

Nine-Month 2010 Results

For the first nine months of 2010, net sales were $474.4 million compared to $364.0 million in the comparable period last year.

Operating income for the first nine months increased 62.6% to $94.3 million, or 19.9% of net sales, compared with operating income of $58.0 million, or 15.9% of net sales, in the same period of 2009.

Net income was $58.1 million, or $2.06 per diluted share, for the first nine months of 2010, compared to $36.6 million, or $1.34 per diluted share, in the first nine months of 2009.

At the end of the third quarter, cash, cash equivalents and marketable securities totaled $152.6 million.

Company Outlook

For fiscal 2010, the Company now expects net sales will increase 24% - 25% compared to fiscal 2009. Diluted EPS is expected to be in the range of $2.57 - $2.62. This compares to previous guidance of diluted EPS in the range of $2.45 - $2.55.

Conference Call Information

As previously announced, interested stockholders are invited to listen to the third quarter earnings conference call scheduled for today, Tuesday, November 2, 2010, 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 877-870-5176, passcode 6514987, and will be available until December 2, 2010.

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 owned brands including Steve Madden, Steven by Steve Madden, Madden Girl, Betsey Johnson, Betseyville and Big Buddha, the Company is the licensee of various brands, including Olsenboye for footwear, handbags and belts, Elizabeth and James, l.e.i. and GLO for footwear and Daisy Fuentes for handbags. The Company also designs and sources products under private label brand names for various retailers. The Company's wholesale distribution includes department stores, specialty stores, luxury retailers, national chains and mass merchants. The Company also operates 82 retail stores (including the Company's online store). The Company licenses certain of its brands to third parties for the marketing and sale of certain products, including for ready-to-wear, outerwear, intimate apparel, cold weather accessories, eyewear, hosiery, jewelry, fragrance and bedding and bath products.

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 forward-looking statements and the projections upon which the forward-looking statements are based. Factors that 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 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.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
		Three Months Ended						Nine Months Ended
		Sep 30, 2010			Sep 30, 2009			Sep 30, 2010			Sep 30, 2009
		(Unaudited)						(Unaudited)
Net sales		$	184,118		$	140,138		$	474,390		$	364,039
Cost of sales			106,610			78,462			268,096			209,313
Gross profit			77,508			61,676			206,294			154,726
Commission and licensing fee income			6,587			5,726			18,000			15,993
Operating expenses			46,707			39,088			129,994			112,729
Income from operations			37,388			28,314			94,300			57,990
Interest and other income, net			1,201			488			2,927			1,252
Income before provision for income taxes			38,589			28,802			97,227			59,242
Provision for income taxes			15,673			10,971			39,127			22,690
Net income		$	22,916		$	17,831		$	58,100		$	36,552
Basic income per share		$	0.83		$	0.66		$	2.11		$	1.35
Diluted income per share		$	0.81		$	0.64		$	2.06		$	1.34
Weighted average common shares outstanding - Basic			27,680			27,152			27,593			27,003
Weighted average common shares outstanding - Diluted			28,235			27,674			28,236			27,359

STEVEN MADDEN LTD.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(In thousands)
		Sep 30, 2010			Dec 31, 2009			Sep 30, 2009
		(Unaudited)						(Unaudited)
Cash and cash equivalents		$	29,045		$	69,266		$	47,622
Marketable securities (Current & non current)			123,574			85,684			78,069
Total current assets			209,003			191,369			182,550
Total assets			430,014			326,859			316,290
Total current liabilities			76,626			52,362			61,144
Total liabilities			95,697			59,072			66,392
Total stockholders' equity			334,317			267,787			249,898

SOURCE: Steve Madden

ICR, Inc.
Investor Relations
Jean Fontana or Joseph Teklits, 203-682-8200
http://www.icrinc.com