Steve Madden Limited

Steve Madden Ltd. (SHOO - Snapshot Report) is parlaying a strong brand known for its trendy, yet affordable footwear styles, into profit. The company has surprised on estimates 3 out of 4 quarters by an average of 7.38%. Analysts expect year-over-year earnings growth of 13.41%.

Company Description

Steve Madden manufactures footwear and accessories for men, women and children that are sold through company-owned retail stores, department stores, specialty retailers and at the company's web site, www.stevemadden.com.

It is also the licensee for footwear for Elizabeth and James and l.e.i. which is sold at Wal-Mart.

Sales Jump 6.9% in the First Quarter

Steve Madden is growing when other retailers are struggling as its trendy footwear styles and value price point drive sales.

On May 5, the company reported that net sales climbed 6.9% in the first quarter of 2009 to $107.4 million from $100.5 million in the year ago period. The wholesale business, which is the larger segment, grew 7.6% to $81.3 million.

"We are particularly pleased with the performance of our Steve Madden Womens and Madden Girl wholesale businesses as well as the strong initial results of l.e.i at Wal-Mart," said Edward Rosenfeld, Chairman and CEO.

Same store sales also bucked the retail trend by increasing 7.6% in the first quarter compared to a decrease of 3.7% in the first quarter of 2008.

Steve Madden surprised on estimates by 1 cent, or 2.78%, reporting earnings per share of 37 cents compared to 10 cents a year ago. Net income jumped 214% to $6.6 million from $2.1 million.

2009 Guidance Affirmed

While first quarter results were better than expected, the company still expects 2009 net sales to be flat to lower by 2% compared to 2008 because of the difficult economic environment. However, Steve Madden did reaffirm 2009 EPS guidance of $18.5 to $1.95 a share.

Consenus Estimates Jump

Covering analysts moved to raise estimates in light of the first-quarter results. 3 out of 5 covering analysts raised second quarter estimates in the last month as consensus estimates climbed 13 cents to 49 cents per share in the last 60 days.

Similarly, 2009 consensus estimates leapt 28.6% in the last 60 days to $1.89 from $1.47 per share.

Value Fundamentals

Steve Madden is a Zacks #1 Rank (strong buy) stock. It is trading with a forward P/E of 13.2 and has a price-to-book of 2.36. The company also has a solid 5-year return on equity (ROE) of 14.37%.