Steven Madden, Ltd. (SHOO Quick QuoteSHOO - Free Report) reported sturdy results for first-quarter 2022, wherein both the top and the bottom line improved year over year and surpassed the Zacks Consensus Estimate.

Quarterly results were backed by gains from its strategic efforts. Steven Madden continues witnessing sturdy consumer demand for its brands as well as a robust performance across the channels, product categories and geographies. The direct-to-consumer business sustains its momentum.

SHOO is focused on driving growth across its direct-to-consumer business, led by its digital capabilities; expanding categories apart from footwear, such as handbags and apparel; enhancing its presence in the international markets and reinforcing its core U.S. wholesale footwear business. Over the past six months, shares of this renowned fashion-footwear player have increased 7.1% against the industry’s 4.5% dip.

Q1 Highlights

Steven Madden delivered adjusted earnings of 92 cents a share, which beat the Zacks Consensus Estimate of 48 cents. Also, the bottom line grew significantly from adjusted earnings of 33 cents per share recorded in the year-earlier quarter. Higher sales and margins drove the bottom-line performance.

Total revenues jumped 55% year over year to $559.7 million. This takes into account net sales of $557.3 million, which increased 55.3% year over year, as well as commission and licensing fee income of $2.4 million that dropped 14.3% from the last-year level. The top line surpassed the Zacks Consensus Estimate of $463 million.

In the first quarter, Steven Madden’s branded handbag business grew more than 50% while apparel revenues were up more than 100%. SHOO’s international revenues surged above 60% year over year. Across the international markets, Steven Madden witnessed triple-digit percentage growth in Canada and Mexico as well as another solid quarter in Europe.

E-commerce revenues rose 57.5% year over year, reflecting solid performances in the Steve Madden, Dolce Vita and Betsey Johnson digital businesses. Brick-and-mortar revenues increased 64.1% year over year or 52% on a comp-store basis. The apparel business witnessed robust strength and grew triple digits from last-year levels.

Gross profit surged 63.8% year over year to $227.9 million while consolidated gross margin expanded 220 basis points (bps) to 40.7%. Wholesale gross margin increased 290 bps to 35.2% from the year-ago period’s level while direct-to-consumer gross margin contracted 120 bps to 62.3%.
 
Steven Madden reported an adjusted operating income of $94.4 million, up from $35.6 million registered in the same quarter a year ago. Adjusted operating margin expanded 700 bps to 16.9%.

Segmental Performances

Revenues for the Wholesale business increased 54.1% year over year to $449 million. Wholesale footwear revenues climbed 59.9% year over year while wholesale accessories and apparel revenues were up 37.1%.

Direct-to-consumer revenues surged 60.5% year over year to $108.3 million. SHOO ended the first quarter with 213 brick-and-mortar retail outlets, six e-commerce websites and 19 company-operated concessions across the international markets.

Other Financial Aspects

Steven Madden, which currently has a Zacks Rank #3 (Hold), ended the reported quarter with cash, cash equivalents and short-term investments of $180.2 million and shareholders’ equity of $835.2 million, excluding a non-controlling interest of $8.2 million. As of Mar 31, 2022, SHOO had inventories of $233.4 million, up 118.9% year over year.

CapEx came in at $3.6 million during the first quarter of 2022. Steven Madden used net cash from operating activities of $19.4 million at the end of the first quarter.

In the reported quarter, management repurchased 42.4 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. Moreover, SHOO’s board approved a quarterly cash dividend of 21 cents per share, payable Jun 24, 2022, to its stockholders of record as of Jun 13.

2022 View

Following the sturdy quarterly results, management raised its outlook for 2022. Management now projects revenues to rise 13-16% versus 2021, up from the prior growth range of 10-13%. Steven Madden envisions earnings per share in the bracket of $2.87-$2.97 while adjusted earnings are guided in the range of $2.90-$3.00. Earlier, management had predicted earnings per share of $2.66-$2.76 while adjusted earnings were projected in the band of $2.73-$2.83.

In 2021, SHOO delivered revenues of $1.87 billion and adjusted earnings per share of $2.50.

The Zacks Consensus Estimate for 2022 revenues and earnings stands at $2.10 billion and $2.82, respectively.

Eye These Solid Picks

A few better-ranked stocks in the Consumer Discretionary space are Oxford Industries (OXM Quick QuoteOXM - Free Report) , G-III Apparel (GIII Quick QuoteGIII - Free Report) and Gildan Activewear (GIL Quick QuoteGIL - Free Report) .

Oxford Industries currently sports a Zacks Rank # 1 (Strong Buy). OXM has a trailing four-quarter earnings surprise of 112.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Oxford Industries’ current financial year’s sales and EPS suggests growth of 10.2% and 13%, respectively, from the corresponding year-ago reported numbers.

G-III Apparel currently has a Zacks Rank of 1. GIII has a trailing four-quarter earnings surprise of 160.6%, on average.

The Zacks Consensus Estimate for G-III Apparel 's current financial-year sales suggests growth of 8.7% while the same for EPS indicates a rise of 5.2% from the respective year-ago reported figures.

Gildan Activewear has a Zacks Rank #2 (Buy) at present. GIL has an expected long-term earnings growth rate of 8%.

The Zacks Consensus Estimate for Gildan Activewear’s 2022 sales and EPS suggests growth of 8.9% and 3.3%, respectively, from the corresponding year-ago reported figures. GIL has a trailing four-quarter earnings surprise of 66.6%, on average.