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Why Is Steven Madden (SHOO) Up 2.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Steven Madden (SHOO - Free Report) . Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steven Madden due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Steven Madden Q1 Earnings Miss, Revenues Down Y/Y
Steven Madden reported mixed first-quarter 2023 results, wherein the top line beat the Zacks Consensus Estimate while the bottom line missed the same. However, both revenues and earnings declined year over year.
In the reported quarter, the company witnessed a challenging retail environment, conservative order patterns from wholesale customers and tough year-over-year comparisons. However, Steve Madden reduced its inventory levels and saw a strong gross margin performance in spite of a promotional retail backdrop.
Q1 Highlights
Steven Madden posted adjusted quarterly earnings of 50 cents per share that missed the Zacks Consensus Estimate by a couple of cents. The same decreased from 92 cents per share reported in the prior-year period.
Total revenues fell 17.1% year over year to $463.8 million. While net sales of $461.7 million decreased 17.2%, commission and licensing fee income of $2.1 million declined 12.5% from the year-ago period’s level. The top line came above the Zacks Consensus Estimate of $452 million.
Gross profit tumbled 14.4% year over year to $195.1 million. Nonetheless, the gross margin expanded 140 basis points (bps) to 42.1%. Gross profit as a percentage of wholesale revenues increased 180 bps to 37%, driven by higher margin in the Wholesale accessories/apparel business. However, gross profit as a percentage of direct-to-consumer revenues, decreased 310 bps to 59.2% owing to higher promotional activity.
Adjusted operating expenses jumped 10.4% year over year to $147.4 million. Also, as a percentage of revenues, adjusted operating expenses expanded 800 bps to 31.8%.
Steven Madden reported an adjusted operating income of $47.7 million, down from $94.4 million registered in the same quarter a year ago. The adjusted operating margin contracted 660 bps to 10.3%.
Segmental Performance
Revenues for the Wholesale business decreased 19.3% year over year to $362.1 million. We note that Wholesale footwear revenues fell 18.6% year over year, while Wholesale accessories/apparel revenues were down 22%.
Direct-to-consumer revenues dipped 8.1% to $99.6 million, driven by a decrease in the brick-and-mortar business and e-commerce unit.
Other Financial Aspects
Steven Madden ended the reported quarter with cash and cash equivalents of $210 million, short-term investments of $13.7 million and stockholders’ equity of $821 million, excluding non-controlling interest of $16.7 million. Management incurred capital expenditures of $3.8 million in the first quarter of 2023.
In the reported quarter, SHOO repurchased $38.5 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. Moreover, the company’s board has approved a raise in its share repurchase authorization of $189.9 million, with the total authorization up to $250 million. It has also approved a quarterly cash dividend of 21 cents per share, payable Jun 23, 2023, to stockholders of record as on Jun 12.
Guidance
Steven Madden continues to project revenues to decline 6.5-8% from the last year’s level. SHOO envisions earnings per share (EPS) of $2.39-$2.49 and adjusted EPS of $2.40-$2.50 for the year.
In 2022, Steven Madden reported revenues of $2.1 billion and adjusted EPS of $2.80.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -11.16% due to these changes.
VGM Scores
Currently, Steven Madden has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Steven Madden has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Steven Madden belongs to the Zacks Shoes and Retail Apparel industry. Another stock from the same industry, Skechers (SKX - Free Report) , has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Skechers reported revenues of $2 billion in the last reported quarter, representing a year-over-year change of +10%. EPS of $1.02 for the same period compares with $0.77 a year ago.
For the current quarter, Skechers is expected to post earnings of $0.51 per share, indicating a change of -12.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Skechers has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Steven Madden (SHOO) Up 2.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Steven Madden (SHOO - Free Report) . Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steven Madden due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Steven Madden Q1 Earnings Miss, Revenues Down Y/Y
Steven Madden reported mixed first-quarter 2023 results, wherein the top line beat the Zacks Consensus Estimate while the bottom line missed the same. However, both revenues and earnings declined year over year.
In the reported quarter, the company witnessed a challenging retail environment, conservative order patterns from wholesale customers and tough year-over-year comparisons. However, Steve Madden reduced its inventory levels and saw a strong gross margin performance in spite of a promotional retail backdrop.
Q1 Highlights
Steven Madden posted adjusted quarterly earnings of 50 cents per share that missed the Zacks Consensus Estimate by a couple of cents. The same decreased from 92 cents per share reported in the prior-year period.
Total revenues fell 17.1% year over year to $463.8 million. While net sales of $461.7 million decreased 17.2%, commission and licensing fee income of $2.1 million declined 12.5% from the year-ago period’s level. The top line came above the Zacks Consensus Estimate of $452 million.
Gross profit tumbled 14.4% year over year to $195.1 million. Nonetheless, the gross margin expanded 140 basis points (bps) to 42.1%. Gross profit as a percentage of wholesale revenues increased 180 bps to 37%, driven by higher margin in the Wholesale accessories/apparel business. However, gross profit as a percentage of direct-to-consumer revenues, decreased 310 bps to 59.2% owing to higher promotional activity.
Adjusted operating expenses jumped 10.4% year over year to $147.4 million. Also, as a percentage of revenues, adjusted operating expenses expanded 800 bps to 31.8%.
Steven Madden reported an adjusted operating income of $47.7 million, down from $94.4 million registered in the same quarter a year ago. The adjusted operating margin contracted 660 bps to 10.3%.
Segmental Performance
Revenues for the Wholesale business decreased 19.3% year over year to $362.1 million. We note that Wholesale footwear revenues fell 18.6% year over year, while Wholesale accessories/apparel revenues were down 22%.
Direct-to-consumer revenues dipped 8.1% to $99.6 million, driven by a decrease in the brick-and-mortar business and e-commerce unit.
Other Financial Aspects
Steven Madden ended the reported quarter with cash and cash equivalents of $210 million, short-term investments of $13.7 million and stockholders’ equity of $821 million, excluding non-controlling interest of $16.7 million. Management incurred capital expenditures of $3.8 million in the first quarter of 2023.
In the reported quarter, SHOO repurchased $38.5 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. Moreover, the company’s board has approved a raise in its share repurchase authorization of $189.9 million, with the total authorization up to $250 million. It has also approved a quarterly cash dividend of 21 cents per share, payable Jun 23, 2023, to stockholders of record as on Jun 12.
Guidance
Steven Madden continues to project revenues to decline 6.5-8% from the last year’s level. SHOO envisions earnings per share (EPS) of $2.39-$2.49 and adjusted EPS of $2.40-$2.50 for the year.
In 2022, Steven Madden reported revenues of $2.1 billion and adjusted EPS of $2.80.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -11.16% due to these changes.
VGM Scores
Currently, Steven Madden has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Steven Madden has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Steven Madden belongs to the Zacks Shoes and Retail Apparel industry. Another stock from the same industry, Skechers (SKX - Free Report) , has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Skechers reported revenues of $2 billion in the last reported quarter, representing a year-over-year change of +10%. EPS of $1.02 for the same period compares with $0.77 a year ago.
For the current quarter, Skechers is expected to post earnings of $0.51 per share, indicating a change of -12.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Skechers has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.