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What's in the Cards for Steven Madden (SHOO) in Q2 Earnings?

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Steven Madden, Ltd. (SHOO - Free Report) is slated to release second-quarter 2020 results on Jul 29, before the opening bell. The Zacks Consensus Estimate for the quarter stands at a loss of 26 cents, wider than the loss of 24 cents pegged seven days ago. The consensus mark also compares unfavorably with 47 cents a share earned in the same quarter a year ago. Moreover, the consensus estimate of $182.6 million as quarterly revenues suggests more than 58% decline from the prior-year quarter’s tally.

However, the provider of fashion-forward footwear, apparel and accessories has a trailing four-quarter earnings surprise of 2.9%, on average.

Key Factors to Note

Persistent softness across the wholesale business and higher operating expenses might have hurt Steven Madden’s second-quarter performance. Lower wholesale footwear and accessories/apparel revenues have been marring the wholesale unit. Management at its first-quarter earnings call on May 28 stated that wholesale revenues have been trending down roughly 75% for April and May. The Zacks Consensus Estimate for second-quarter sales stands at $255 million for the company’s wholesale business, suggesting a decline of 29.8% year over year.

We note that management has been accelerating e-commerce-enhancement initiatives amid the pandemic. These initiatives include higher cost of investments toward digital marketing and testing of features like try-before-you-buy and delivery capabilities. This has been adding up to increased costs.

Surely, aforementioned factors cannot be overlooked. However, we expect Steven Madden’s e-commerce initiatives and flagship brand’s robust performance might have cushioned the quarter to some extent. At first-quarter earnings call, management said that e-commerce revenues were up roughly 75% for the second quarter through May 28. The company had also informed that it has been gradually reopening stores.

What the Zacks Model Unveils

Our proven model does not conclusively predict a beat for Steven Madden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Steven Madden, Ltd. Price and EPS Surprise

Steven Madden, Ltd. Price and EPS Surprise

Steven Madden, Ltd. price-eps-surprise | Steven Madden, Ltd. Quote

Although Steven Madden has an Earnings ESP of +11.69%, its Zacks Rank #4 (Sell) is making surprise prediction difficult.

 

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Hanesbrands (HBI - Free Report) has an Earnings ESP of +120.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wolverine World Wide (WWW - Free Report) has an Earnings ESP of +18.61% and a Zacks Rank #3.

Rent-A-Center (RCII - Free Report) has an Earnings ESP of +3.39% and a Zacks Rank #3.

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