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Steve Madden (SHOO) to Report Q3 Earnings: What's in Store?

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Steve Madden, Ltd. (SHOO - Free Report) is slated to release third-quarter 2020 results on Oct 27, before the opening bell. Although the Zacks Consensus Estimate for third-quarter earnings has been stable for the past 30 days at 24 cents, the same indicates a decline of about 64.2% from 67 cents earned in the same quarter a year ago.

Markedly, the fashion-forward footwear, apparel and accessories dealer delivered an earnings surprise of 6.7% in the last four quarters, on average.

Key Factors to Note

Persistence of softness across the wholesale business is likely to have affected Steven Madden’s top line. We note that decline in the wholesale footwear and wholesale accessories/apparel revenues have been dampening the unit’s performance. Again, the impact of any order cancellations due to COVID-19 on the segment’s performance cannot be ruled out.

Management on its last earnings call projected decline of roughly 35% and 40% year over year in  wholesale-footwear revenues and wholesale-accessories/apparel revenues, respectively, for the third quarter. Clearly, softness across both categories is likely to marred the wholesale segment’s performance in the quarter under review. The company had guided revenue decline of 25% in retail business in the quarter under review.

The Zacks Consensus Estimate for third-quarter revenues stands at $327.6 million, which suggests a decrease of 34.1% from the prior-year quarter’s reported figure.

Nonetheless, Steven Madden’s focus on enhancing marketing activities, improving e-commerce capabilities and optimizing cost structure are likely to have favorably impacted quarterly performance. In fact, the company’s e-commerce business has been in a bright spot amid the pandemic, and the same is likely to have contributed to retail segment sales in the third quarter. Increased digital-marketing investments are generating impressive returns, with initiatives like try before you buy likely to have aided its performance. Additionally, performance of Steven Madden’s flagship brand is expected to have been solid.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Steven Madden this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 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

Steven Madden carries a Zacks Rank #3 and an Earnings ESP of +5.42%.

More Stocks With the Favorable Combination

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

Crocs (CROX - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. 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 +17.86% and a Zacks Rank #2.

Deckers (DECK - Free Report) has an Earnings ESP of +0.95% and a Zacks Rank #2.

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