Steve Madden Announces Third Quarter 2015 Results

LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--Oct. 29, 2015-- 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, 2015.

For the Third Quarter 2015:

• Net sales increased 5.5% to $413.5 million compared to $392.0 million in the same period of 2014.
• Gross margin expanded 130 basis points to 36.0% as compared to 34.7% in the same period last year.
• Operating expenses as a percentage of sales were 21.6% compared to 20.9% of sales in the same period of 2014.
• Operating income totaled $66.3 million, or 16.0% of net sales, compared with operating income of $59.3 million, or 15.1% of net sales, in the same period of 2014.
• Net income was $42.9 million, or $0.70 per diluted share, compared to $39.2 million, or $0.62 per diluted share, in the prior year's third quarter.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased with our third quarter results, which included an increase in diluted EPS of 13% compared to the prior year period. Our retail segment was once again the standout, with a third consecutive quarter of double-digit comparable store sales growth. We also benefited from earnings contributions from the recently acquired Dolce Vita, Blondo and SM Mexico. While the overall retail environment is choppy, we are pleased with the momentum in our business and remain on track to meet our earnings targets for the year.”

Third Quarter 2015 Segment Results

Net sales for the wholesale business were $357.0 million in the third quarter compared to $343.3 million in the third quarter of 2014. Gross margin in the wholesale business increased to 32.1% compared to 31.3% in last year’s third quarter due to improvement in the wholesale footwear segment.

Retail net sales in the third quarter were $56.4 million compared to $48.7 million in the third quarter of the prior year. Same store sales increased 11.2% for the third quarter. Retail gross margin increased to 60.4% in the third quarter of 2015 compared to 58.9% in the third quarter of 2014 as a result of decreased promotional activity.

During the third quarter, the Company opened two full price stores in Canada, one full price store in Mexico and one U.S. outlet location. The Company ended the quarter with 165 company-operated retail locations, including 120 full price stores, 37 outlets, four Internet stores and four joint venture locations in South Africa.

The effective tax rate for the third quarter of 34.1% compares to 35.0% in the third quarter of the prior year.

Balance Sheet and Cash Flow

During the third quarter of 2015, the Company repurchased approximately 763,000 shares of the Company’s common stock for $29.7 million.

As of September 30, 2015, cash, cash equivalents, and current and non-current marketable securities totaled $151.2 million.

Company Outlook

Based on lower-than-anticipated back half sales in its private label footwear business, the Company has adjusted its sales outlook for fiscal year 2015. The Company now expects that net sales will increase 6% to 7% over net sales in 2014. The Company continues to expect diluted EPS for fiscal year 2015 to be in the range of $1.85 to $1.95.

Conference Call Information

Interested stockholders are invited to listen to the first quarter earnings conference call scheduled for today, Thursday, October 29, 2015, 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 1949549, and will be available until November 29, 2015.

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 165 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 STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
Unaudited
		Three Months Ended							Nine Months Ended
		September 30, 2015				September 30, 2014			September 30, 2015			September 30, 2014
Net sales		$	413,462			$	391,992		$	1,060,989		$	992,331
Cost of sales			264,691				255,895			684,694			640,826
Gross profit			148,771				136,097			376,295			351,505
Commission and licensing fee income, net			6,643				5,103			13,689			11,461
Operating expenses			89,130				81,867			253,991			227,328
Impairment charge			-				-			3,045			-
Income from operations			66,284				59,333			132,948			135,638
Interest and other (loss)/income, net			(895	)			1,132			273			3,218
Income before provision for income taxes			65,389				60,465			133,221			138,856
Provision for income taxes			22,298				21,163			45,428			47,385
Net income			43,091				39,302			87,793			91,471
Net income (loss) attributable to noncontrolling interest			206				54			578			584
Net income attributable to Steven Madden, Ltd.		$	42,885			$	39,248		$	87,215		$	90,887
Basic income per share		$	0.73			$	0.64		$	1.47		$	1.47
Diluted income per share		$	0.70			$	0.62		$	1.42		$	1.42
Basic weighted average common shares outstanding			58,911				61,019			59,271			61,936
Diluted weighted average common shares outstanding			61,060				63,215			61,516			64,184

STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
		As of
		September 30, 2015			December 31, 2014			September 30, 2014
		(Unaudited)						(Unaudited)
Cash and cash equivalents		$	38,654		$	81,450		$	169,911
Marketable securities (current & non current)			112,539			121,644			19,562
Accounts receivables, net			284,835			194,594			260,433
Inventories			123,768			92,677			103,151
Other current assets			37,965			42,307			31,051
Property and equipment, net			71,162			68,905			63,092
Goodwill and intangibles, net			291,269			294,416			274,848
Other assets			9,693			15,242			12,484
Total assets		$	969,885		$	911,235		$	934,532
Accounts payable		$	130,556		$	92,635		$	118,817
Contingent payment liability (current & non current)			33,179			38,633			29,558
Other current liabilities			90,480			73,501			73,724
Other long term liabilities			30,408			36,937			26,754
Total Steven Madden, Ltd. stockholders' equity			684,887			669,255			685,390
Noncontrolling interest			375			274			289
Total liabilities and stockholders' equity		$	969,885		$	911,235		$	934,532

STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
Unaudited
			Nine Months Ended
			September 30, 2015				September 30, 2014
Net cash provided by operating activities			$	50,148			$	74,437
Investing Activities
Purchases of property and equipment				(13,524	)			(12,605	)
Purchases / sales of marketable securities, net				4,627				94,873
Repayment of notes receivable				342				-
Acquisitions, net of cash acquired				(9,129	)			(61,414	)
Net cash (used in)/provided by investing activities				(17,684	)			20,854
Financing Activities
Common stock share repurchases for treasury				(103,892	)			(101,751	)
Payment of contingent liability				(2,950	)			(8,475	)
Proceeds from exercise of stock options				21,154				2,940
Tax benefit from the exercise of stock options				10,428				1,631
Net cash used in financing activities				(75,260	)			(105,655	)
Net decrease in cash and cash equivalents				(42,796	)			(10,364	)
Cash and cash equivalents - beginning of period				81,450				180,275
Cash and cash equivalents - end of period			$	38,654			$	169,911

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Source: Steve Madden

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