• Steve Madden Announces First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 01 May 2024 06:59:00   America/New_York

    LONG ISLAND CITY, N.Y., May 01, 2024 (GLOBE NEWSWIRE) -- Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel, today announced financial results for the first quarter ended March 31, 2024.

    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 to Steven 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.

    Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We got off to a strong start to 2024, with first quarter revenue increasing 19% and Adjusted diluted EPS rising 30% compared to the same period in 2023. We also demonstrated tangible progress on our key strategic initiatives, with double-digit percentage revenue growth in international markets, non-footwear categories and direct-to-consumer channels as well as a return to year-over-year revenue growth in the U.S. wholesale footwear business. Looking ahead, we are confident that the continued execution of our strategy will enable us to drive sustainable revenue and earnings growth and create significant value for our stakeholders over the long term.”

    First Quarter 2024 Channel Results

    Revenue for the wholesale business was $438.2 million, a 21.0% increase compared to the first quarter of 2023. Excluding the newly acquired Almost Famous, wholesale revenue increased 9.7%. Wholesale footwear revenue increased 4.7%. Wholesale accessories/apparel revenue increased 78.6%, or 27.4% excluding Almost Famous. Gross profit as a percentage of wholesale revenue was 35.1%, compared to 37.0% in the first quarter of 2023 driven primarily by the impact of Almost Famous and a mix shift in wholesale footwear to the private label business.

    Direct-to-consumer revenue was $112.3 million, a 12.8% increase compared to the first quarter of 2023 driven by increases in both the brick-and-mortar and e-commerce businesses. Gross profit as a percentage of direct-to-consumer revenue increased to 61.9%, compared to 59.2% in the first quarter of 2023 driven by reduced promotional activity.

    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 March 31, 2024, cash, cash equivalents and short-term investments totaled $143.1 million. Inventory totaled $202.0 million, compared to $179.9 million at the end of the first quarter of 2023.

    During the first quarter of 2024, the Company spent $37.3 million on repurchases of its common stock, which includes shares acquired through the net settlement of employees’ stock awards.

    Quarterly Cash Dividend

    The Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on June 21, 2024 to stockholders of record as of the close of business on June 10, 2024.

    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 $2.51 to $2.61. The Company continues to expect Adjusted diluted EPS will be in the range of $2.55 to $2.65.

    Conference Call Information

    Interested stockholders are invited to listen to the conference call scheduled for today, May 1, 2024, at 8:30 a.m. Eastern Time, which will include a discussion of the Company's first quarter 2024 earnings results and 2024 outlook. The call will be webcast live on the Company’s website at https://investor.stevemadden.com. A webcast replay of the conference call will be available on the Company's website or via the following webcast link https://edge.media-server.com/mmc/p/s9ph66uj beginning today at approximately 10:00 a.m. Eastern Time.

    About Steve Madden

    Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo® and GREATS®, Steve Madden licenses footwear, handbags and other accessory categories for the Anne Klein® brand. 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 directly operates brick-and-mortar retail stores and e-commerce websites. Steve Madden also licenses certain of its brands to third parties for the marketing and sale of certain products in the apparel, accessory and home categories. For local store information and the latest sandals, dress shoes, fashion sneakers, boots, booties, and more, please visit www.stevemadden.com, www.dolcevita.com and our other branded websites.

    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:

    • 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.

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME

    (In thousands, except per share amounts)
    (Unaudited)
     
      Three Months Ended
      March 31, 2024 March 31, 2023
         
    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 Steven Madden, Ltd. $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 


    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED BALANCE SHEETS

    (In thousands)
        As of  
      March 31, 2024 December 31, 2023 March 31, 2023
      (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 
    Goodwill  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      
    Total Steven Madden, Ltd. 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 


    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In thousands)
    (Unaudited)
     
      Three Months Ended
      March 31, 2024 March 31, 2023
    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 


    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
      March 31, 2024 March 31, 2023
         
    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
      March 31, 2024 March 31, 2023
         
    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
      March 31, 2024 March 31, 2023
         
    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
      March 31, 2024 March 31, 2023
         
    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
      March 31, 2024 March 31, 2023
         
    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 Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
      Three Months Ended
      March 31, 2024 March 31, 2023
         
    GAAP net income attributable to Steven Madden, Ltd. $43,934  $36,730 
    Non-GAAP Adjustments  3,097   904 
    Adjusted net income attributable to Steven Madden, Ltd. $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

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

     


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