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Steven Madden (SHOO - Free Report) is regaining momentum, trading at a solid value and analysts continue to submit bullish estimate revisions.

Company Description

Steven Madden makes footwear and accessories for the entire family through owned and licensed brands.

Sales Still Climbing

While the economic news shows a cautious consumer, retailers are still showing excellent sales figures. In the first-quarter earnings release on May 4 Steve Madden reported a 23% jump in revenue, to $132 million.

Comparable store sales were up almost 14%. The company's gross margin continued to improve, this time 500 bps to 45.5%. Higher sales plus better margins is a recipe for an earnings surprise.

Beat the Street

Earnings for the quarter came in at 55 cents, 17 cents better than expected. Steven Madden has surprised 6 of the past 8 quarters, meeting expectations in the other 2 quarters.

Along with that earnings surprise, Steven Madden raised its full-year guidance. The company now expects to make between $2.30 and $2.40 per share. Previously the upper end of guidance was $2.20.

Analysts Follow Suit

The Zacks Consensus Estimate for full-year 2010 says that the company is being conservative. Analysts are looking for $2.44 per share on average.

Next year's estimates are averaging $2.72, up 24 cents. These levels represent annual growth rates of 34% and 11%, respectively.

Out of Favor or Good Value?

Many investors are shying away from retailers right now. The sector has had a great recovery, but some are saying the party is over. I know, I was one of them.

But the reality is; the earnings are still there and the valuations are cheap because everyone jumped out. Shares of SHOO are going for 14 times forward earnings and with a PEG of 0.9.

The Chart

The stock has made a nice double bottom and passed the intermediate high. Momentum has shifted as the MACD is crossing over to signal a buy. The large gap up to the left is due to a reverse stock split.

Steven Madden - ticker SHOO >

Bill Wilton is the Growth Stock Strategist for He is also the Editor in charge of the market-beating Zacks Growth Trader service

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