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Bear of the Day: Steve Madden (SHOO)

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Steven Madden (SHOO - Free Report) designs, sources, markets, and sells fashion-forward name-brand and private-label footwear, fashion handbags, and accessories for women, men, and children across the world.

The stock is currently a Zacks Rank #5 (Strong Sell), with analysts dialing back their EPS expectations significantly over recent months.

Zacks Investment Research
Image Source: Zacks Investment Research

SHOO resides in the Zacks – Shoes and Retail Apparel industry, which is currently ranked in the bottom 12% of all Zacks Industries. Let’s take a closer look at the company.

SHOO Underperforms

SHOO shares haven’t performed well over the past year, down 46% and widely underperforming relative to the S&P 500 and many peers. Shares found some relief following its latest set of quarterly results, but the current EPS outlook doesn’t support the price action continuing.

Zacks Investment Research
Image Source: Zacks Investment Research

A negative force impacting the stock’s performance has been slowing sales growth, with revenues up a minuscule 0.2% year-over-year throughout its latest period. Below is a chart illustrating the company’s sales on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, the margins picture for Steve Madden has largely turned sour over recent periods, as shown below. The margin impact here is massive given its apparel exposure, an already margin-thin industry for many companies.

Please note that the chart below tracks margins on a trailing twelve-month basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Nonetheless, the company remains positive, with CEO Edward Rosenfield stating this after the release –

“We were pleased with our performance in the first quarter, as our team’s strong execution of our strategy enabled us to deliver earnings results that significantly exceeded expectations. Looking ahead, we face meaningful near-term headwinds and heightened uncertainty due to the impact of new tariffs on goods imported into the United States.

He continued –

We are moving swiftly to adapt to the changing landscape, with a focus on mitigating near-term impacts while positioning the company for long-term growth. We believe our agile business model – combined with our fortress balance sheet – gives us a competitive advantage in dynamic environments, and we are optimistic that the current disruption will create opportunities for market share gains over time.’

Bottom Line

Negative earnings estimate revisions, resulting from soft quarterly results and tariff issues, paint a challenging picture for the company’s shares in the near term.

Steve Madden (SHOO - Free Report) is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.

For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.


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