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Here's Why Steven Madden (SHOO) is a Solid Investment Option

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Steven Madden, Ltd.(SHOO - Free Report) remains focused on boosting investors’ optimism through several growth initiatives, international expansion and strategic buyouts. In addition, the company’s wholesale business continues to witness momentum. Apparently, its shares have rallied 31.7% compared with the industry’s rise of 27.9% in a year. Notably, this Zacks Rank #2 (Buy) has a robust surprise history as well. The company posted better-than-expected results in third-quarter 2019, which marked the fourth consecutive quarter of earnings and revenue beat.

Discussing Growth Factors

We note that the company has been benefiting from sturdy performance across its Steve Madden and Blondo brands. The company is witnessing incremental sales at its wholesale and retail businesses. Moreover, Steven Madden stated that the acquisitions of GREATS and BB Dakota are likely to be key catalysts.

Meanwhile, Steve Madden is focusing on expanding business globally. Its directly-owned subsidiaries in Canada and Mexico, SM Europe JV as well as the distributor business remain strong. The company also transitioned to an ownership model from the distributor model in Israel by forming a joint venture and plans to add roughly 10 stores in the next three years.

Steve Madden’s wholesale business is performing outstandingly, courtesy of robust gains from wholesale footwear and accessories businesses. Wholesale footwear’s sales are fuelled by Blondo, Steve Madden Women's and private label brands. Also, Steve Madden handbags and addition of the BB Dakota apparel business are driving sales for Wholesale accessories/apparel.

Steven Madden is on a buyout spree to expand as well. The company acquired a direct-to-consumer company, BB Dakota. With this acquisition, the company will be able to expand its apparel category. This buyout follows Steven Madden’s takeover of Italian sneakers company — Greats Brand, Inc. The company formed a new JV in China with Channel Link. The company has a 51% stake in the new JV, while the remaining is owned by Channel Link.

All these initiatives are likely to contribute to the company’s top and the bottom line.

More Stocks to Watch

lululemon athletica inc. (LULU - Free Report) has an impressive long-term expected earnings growth rate of 12% and flaunts a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NIKE, Inc. (NKE - Free Report) has a long-term expected earnings growth rate of 13.1% and flaunts a Zacks Rank #2.

Boot Barn Holdings, Inc. (BOOT - Free Report) has an expected long-term earnings growth rate of 17% and a Zacks Rank #2.

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