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Steven Madden (SHOO) Up 96% in a Year on Solid E-commerce Unit
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Fashion-footwear dealer Steven Madden, Ltd. (SHOO - Free Report) looks well poised for growth, thanks to strength in its e-commerce business and strategic efforts. The e-commerce business, which has been working well for various industry players amid the pandemic, has been a bright spot for Steven Madden as well. Impressively, the company’s shares have surged a whopping 96.3% over the course of a year and outperformed the industry's 62.8% rally.
Detailing e-commerce initiatives further, we note that the company has been significantly accelerating its digital commerce efforts with respect to distribution. It has added high-level talent to the organization; ramped up digital marketing spend; improved data science capabilities; launched try-before-you-buy payment facility; rolled out buy online, pick-up in store across its entire U.S. full price retail outlets; and introduced advanced delivery and return options. In fact, solid gains from increased investment in digital marketing and robust consumer reception to capabilities such as try before you buy have been contributing to its performance.
Encouragingly, e-commerce momentum continued in the first quarter of 2021 with revenues surging 89%, including a 112% increase in Steve Madden e-commerce business. Notably, this represented about 54% of the company’s total Retail segment sales in the first quarter. Moreover, the digital commerce business remained sturdy in the reported quarter. Going forward, strength in e-commerce is likely to stay and keep boosting the company’s overall results.
What’s More?
Now speaking of the company’s prudent buyouts, management recently concluded the acquisition of the remaining 49.9% share in its European joint venture. This transaction distributes the company’s branded footwear and accessories across majority of the countries in Europe. It formed the European joint venture roughly five years ago. Notably, this joint venture registered solid double-digit percentage revenue growth each year with a 21% revenue increase in 2020.
For 2021, management anticipates revenues from the European joint venture of about $55 million, more than 3/4 of which will be generated from digital channels. Also, the business is expected to generate a mid-teen operating profit margin before allocation of corporate overhead. Additionally, Steven Madden is encouraged about the buyout of BB Dakota, a California-based women's apparel company. With this acquisition, the company looks to expand its apparel category.
Despite these tailwinds, Steven Madden’s sluggish wholesale business is concerning. The adverse impacts of supply-chain disruption with respect to the pandemic and lower footwear category revenues have been hurting the segment. Management remains cautious about the wholesale channel in the near term.
Wrapping Up
Steven Madden is focused on creating trendy products, deepening relations with customers via marketing, enhancing digital commerce agenda, expanding international markets, including Europe, and efficiently controlling inventory and expenses. Also, the company’s flagship brand performance has been outstanding. Strength in the company’s brands and a robust business model position it well to cash in on market-growth opportunities and boost stakeholders’ value in the long run.
In addition, analysts look optimistic about this Zacks Rank #3 (Hold) company. Apparently, the Zacks Consensus Estimate for its earnings is currently pegged at $1.66 for 2021 and $2.08 for 2022. These estimates have moved up 4.4% and 3%, respectively, over the past 30 days.
Ralph Lauren (RL - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 8.2%.
Under Armour (UAA - Free Report) has a long-term earnings growth rate of 32.2% and a Zacks Rank #2 (Buy).
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
Image: Bigstock
Steven Madden (SHOO) Up 96% in a Year on Solid E-commerce Unit
Fashion-footwear dealer Steven Madden, Ltd. (SHOO - Free Report) looks well poised for growth, thanks to strength in its e-commerce business and strategic efforts. The e-commerce business, which has been working well for various industry players amid the pandemic, has been a bright spot for Steven Madden as well. Impressively, the company’s shares have surged a whopping 96.3% over the course of a year and outperformed the industry's 62.8% rally.
Detailing e-commerce initiatives further, we note that the company has been significantly accelerating its digital commerce efforts with respect to distribution. It has added high-level talent to the organization; ramped up digital marketing spend; improved data science capabilities; launched try-before-you-buy payment facility; rolled out buy online, pick-up in store across its entire U.S. full price retail outlets; and introduced advanced delivery and return options. In fact, solid gains from increased investment in digital marketing and robust consumer reception to capabilities such as try before you buy have been contributing to its performance.
Encouragingly, e-commerce momentum continued in the first quarter of 2021 with revenues surging 89%, including a 112% increase in Steve Madden e-commerce business. Notably, this represented about 54% of the company’s total Retail segment sales in the first quarter. Moreover, the digital commerce business remained sturdy in the reported quarter. Going forward, strength in e-commerce is likely to stay and keep boosting the company’s overall results.
What’s More?
Now speaking of the company’s prudent buyouts, management recently concluded the acquisition of the remaining 49.9% share in its European joint venture. This transaction distributes the company’s branded footwear and accessories across majority of the countries in Europe. It formed the European joint venture roughly five years ago. Notably, this joint venture registered solid double-digit percentage revenue growth each year with a 21% revenue increase in 2020.
For 2021, management anticipates revenues from the European joint venture of about $55 million, more than 3/4 of which will be generated from digital channels. Also, the business is expected to generate a mid-teen operating profit margin before allocation of corporate overhead. Additionally, Steven Madden is encouraged about the buyout of BB Dakota, a California-based women's apparel company. With this acquisition, the company looks to expand its apparel category.
Despite these tailwinds, Steven Madden’s sluggish wholesale business is concerning. The adverse impacts of supply-chain disruption with respect to the pandemic and lower footwear category revenues have been hurting the segment. Management remains cautious about the wholesale channel in the near term.
Wrapping Up
Steven Madden is focused on creating trendy products, deepening relations with customers via marketing, enhancing digital commerce agenda, expanding international markets, including Europe, and efficiently controlling inventory and expenses. Also, the company’s flagship brand performance has been outstanding. Strength in the company’s brands and a robust business model position it well to cash in on market-growth opportunities and boost stakeholders’ value in the long run.
In addition, analysts look optimistic about this Zacks Rank #3 (Hold) company. Apparently, the Zacks Consensus Estimate for its earnings is currently pegged at $1.66 for 2021 and $2.08 for 2022. These estimates have moved up 4.4% and 3%, respectively, over the past 30 days.
Few Solid Picks
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren (RL - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 8.2%.
Under Armour (UAA - Free Report) has a long-term earnings growth rate of 32.2% and a Zacks Rank #2 (Buy).
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>