Steve Madden Announces First Quarter 2024 Results
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 toSteven 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.
First Quarter 2024 Channel Results
Revenue for the wholesale business was
Direct-to-consumer revenue was
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
During the first quarter of 2024, the Company spent
Quarterly Cash Dividend
The Company’s Board of Directors approved a quarterly cash dividend of
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
Conference Call Information
Interested stockholders are invited to listen to the conference call scheduled for today,
About
Safe Harbor Statement Under the
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the
- 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) |
||||||||
| Three Months Ended | ||||||||
| 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 |
$ | 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 | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) |
||||||||||||
| As of | ||||||||||||
| (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 | |||||||||
| 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 | ||||||||||||
| 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 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||
| Three Months Ended | ||||||||
| 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 | ||||
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 | ||||||||
| 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 | ||||||||
| 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 | ||||||||
| 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 | ||||||||
| 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 | ||||||||
| 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 |
||||||||
| Three Months Ended | ||||||||
| GAAP net income attributable to |
$ | 43,934 | $ | 36,730 | ||||
| Non-GAAP Adjustments | 3,097 | 904 | ||||||
| Adjusted net income attributable to |
$ | 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
VP of Corporate Development & Investor Relations
718-308-2611
InvestorRelations@stevemadden.com
