Steven Madden, Ltd. SHOO reported solid third-quarter 2024 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
This performance was driven by outstanding growth in accessories and apparel, highlighted by another stellar quarter for Steve Madden handbags and a substantial boost from the newly acquired Almost Famous. Strong top-line gains in international markets and direct-to-consumer channels underscore effective strategic execution. This momentum has led management to raise its 2024 guidance for revenues and adjusted earnings.
In the past three months, shares of this company have gained 6% outperforming the industry’s 2.9% growth.
Steven Madden’s Quarterly Performance: Key Insights
Steven Madden posted adjusted quarterly earnings of 91 cents per share, which beat the Zacks Consensus Estimate of 89 cents. The metric also increased 3.4% from 88 cents in the prior-year period.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden, Ltd. price-consensus-eps-surprise-chart | Steven Madden, Ltd. Quote
Total revenues rose 13% year over year to $624.7 million. Net sales of $621.2 million went up 13%, and commission and licensing fee income of $3.5 million increased 21.4% from the year-ago period. The top line beat the consensus estimate of $607 million.
Adjusted gross profit rose 11.6% year over year to $259.6 million. We note that the adjusted gross margin contracted 50 basis points (bps) to 41.6%. We projected gross margin contraction of 30 bps.
This Zacks Rank #3 (Hold) company’s adjusted operating expenses increased 16.7% year over year to $174.2 million. As a percentage of revenues, adjusted operating expenses increased 90 bps year over year to 27.9%. We forecasted an increase of 14.1% in adjusted operating expenses.
Steven Madden reported an adjusted operating income of $85.4 million, up 2.4% from the prior-year quarter. However, the adjusted operating margin decreased 140 bps to 13.7% in line with our estimate.
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SHOO’s Segment Wise Performance Details
Revenues for the Wholesale business improved 14.4% year over year to $495.7 million, which beat our estimate of $477.1 million. Excluding the newly acquired Almost Famous, wholesale revenues rose 4.8%.
Wholesale footwear revenues decreased 2.2%, while wholesale accessories/apparel revenues surged 54.2%. Excluding Almost Famous, wholesale accessories/apparel revenues grew 21.6%.
Gross profit, as a percentage of wholesale revenues, decreased 40 bps year over year to 35.5%, due to the effects of Almost Famous. We expected the gross margin to shrink 20 bps.
DTC revenues increased 7.8% year over year to $125.5 million in the quarter. Our model expected total DTC revenues of $125.7 million for the quarter, implying 8% year-over-year growth.
Gross profit, as a percentage of direct-to-consumer revenues, increased 30 bps to 64%, due to reduced promotional activity. We anticipated a 50 bps improvement in gross margin.
SHOO ended the third quarter with 282 brick-and-mortar retail outlets, five e-commerce websites and 67 company-operated concessions across the international markets.
SHOO’s Financial Health Snapshot
Steven Madden ended the third quarter with cash and cash equivalents of $139.4 million, short-term investments of $11.1 million and stockholders’ equity of $860.1 million, including non-controlling interest of $26.1 million.
In the reported quarter, SHOO repurchased $20.2 million of its common stock, including shares acquired via the net settlement of employees’ stock awards.
SHOO’s 2024 Outlook
For 2024, the company anticipates a 13-14% increase in revenues from 2023. This revised forecast is an upgrade from the previous guidance of 11-13%.
The company now anticipates adjusted earnings in the range of $2.62-$2.67 per share, an increase from the previous guidance of $2.55-$2.65 and up from $2.45 reported in 2023.
Stocks to Consider
The Gap, Inc. GAP operates as an apparel retail company, which offers apparel, accessories and personal care products for men, women and children, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The Gap’s current fiscal-year sales and earnings indicates growth of 0.5% and 31.5%, respectively, from the year-ago quarter’s reported numbers. GAP has a trailing four-quarter average earnings surprise of 142.8%.
Abercrombie & Fitch Co. ANF, through its subsidiaries, operates as an omnichannel retailer, which offers an assortment of apparel, personal care products and accessories for men, women and kids, currently carrying a Zacks Rank #2. ANF has a trailing four-quarter average earnings surprise of 28%.
The consensus estimate for Abercrombie’s current financial-year sales and earnings indicates growth of 13.1% and 63.4%, respectively, from the year-ago period’s reported figures.
American Eagle Outfitters Inc. AEO, operates as a multi-brand specialty retailer, which provides jeans, apparel and accessories, and personal care products for women and men, currently carries a Zacks Rank #2. AEO has a trailing four-quarter average earnings surprise of 12%.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and earnings indicates growth of 2.5% and 17.1%, respectively, from the year-ago period’s reported figures.
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