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Steven Madden (SHOO) Gains on Innovation, International Growth
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Steven Madden, Ltd. (SHOO - Free Report) gains on innovation, and international growth underscores its resilience and strategic vision. The company's ability to adapt to changing market dynamics positions it as a formidable player. While near-term caution prevails, SHOO's commitment to operational discipline and its diversified approach instill confidence in its long-term prospects.
Diversification & Global Reach Signal Success
SHOO’s focus on developing trend-right products, combined with effective marketing and consumer engagement, highlights its commitment to innovation and relevance in the fashion industry. This approach has helped Steven Madden stay ahead in a highly competitive market. The strategic move to expand beyond its traditional stronghold of footwear into accessories and apparel demonstrates the company's successful diversification strategy.
The third quarter of 2023 witnessed a remarkable 27% increase in overall accessories and apparel revenues, with the Steve Madden handbag business leading the way with staggering 52% revenue growth.
Steven Madden's quest for growth extends far beyond its home turf, with a focus on expanding its footprint in the international markets. The company’s international revenue growth, especially in Europe, signifies successful market penetration and global appeal of its products. In the third quarter, international revenues grew 5% year over year, accounting for about 20% of the consolidated revenues. This expansion reflects the company's strategic focus on diversifying its market presence and capitalizing on international growth opportunities.
Image Source: Zacks Investment Research
Strategic Acquisition Bodes Well
Steven Madden made a significant stride in 2023, acquiring Almost Famous for $52 million in cash. Almost Famous had revenues of approximately $163 million in the 12 months ending Sep 30, 2023. The acquisition of Almost Famous is a strategic move to enhance Steven Madden's apparel platform.
Almost Famous complements the existing Steve Madden apparel business, which focuses on contemporary styling, and is primarily distributed in department stores and e-commerce retailers. The acquisition allows Steven Madden to implement a strategy similar to what has been successful in footwear and accessories, utilizing the Steve Madden brand portfolio to reach customers across all distribution tiers.
Additionally, the acquisition is seen as a significant opportunity for growth, both in terms of sales and margins. The company anticipates leveraging its capabilities to enhance the performance of Almost Famous over time. With an expected revenue contribution of $30-$35 million and an EPS impact of 1-2 cents for the current financial year, this acquisition aligns seamlessly with Steven Madden's forward-looking growth strategy.
Wrapping Up
Despite the positive strides, SHOO acknowledges the softening of the industry trends starting in September. This, coupled with the impacts of the Middle East crisis on its joint ventures in Israel and the Middle East, led to a more cautious stance. Nevertheless, the company is committed to curating a merchandise mix attuned to prevailing trends, fortifying customer relationships through strategic marketing, advancing digital commerce initiatives, extending its global footprint, and optimizing expense management.
These factors led to the Zacks Rank #3 (Hold) company’s shares climbing 34.5%, outperforming the industry's 7.4% rise over the last three months.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current fiscal-year sales indicates growth of 387.5% from the previous year’s reported figures. GPS has a trailing four-quarter average earnings surprise of 138%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a 60.5% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 13.3% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 21.9% and 11.7%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 26.3%.
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Steven Madden (SHOO) Gains on Innovation, International Growth
Steven Madden, Ltd. (SHOO - Free Report) gains on innovation, and international growth underscores its resilience and strategic vision. The company's ability to adapt to changing market dynamics positions it as a formidable player. While near-term caution prevails, SHOO's commitment to operational discipline and its diversified approach instill confidence in its long-term prospects.
Diversification & Global Reach Signal Success
SHOO’s focus on developing trend-right products, combined with effective marketing and consumer engagement, highlights its commitment to innovation and relevance in the fashion industry. This approach has helped Steven Madden stay ahead in a highly competitive market. The strategic move to expand beyond its traditional stronghold of footwear into accessories and apparel demonstrates the company's successful diversification strategy.
The third quarter of 2023 witnessed a remarkable 27% increase in overall accessories and apparel revenues, with the Steve Madden handbag business leading the way with staggering 52% revenue growth.
Steven Madden's quest for growth extends far beyond its home turf, with a focus on expanding its footprint in the international markets. The company’s international revenue growth, especially in Europe, signifies successful market penetration and global appeal of its products. In the third quarter, international revenues grew 5% year over year, accounting for about 20% of the consolidated revenues. This expansion reflects the company's strategic focus on diversifying its market presence and capitalizing on international growth opportunities.
Image Source: Zacks Investment Research
Strategic Acquisition Bodes Well
Steven Madden made a significant stride in 2023, acquiring Almost Famous for $52 million in cash. Almost Famous had revenues of approximately $163 million in the 12 months ending Sep 30, 2023. The acquisition of Almost Famous is a strategic move to enhance Steven Madden's apparel platform.
Almost Famous complements the existing Steve Madden apparel business, which focuses on contemporary styling, and is primarily distributed in department stores and e-commerce retailers. The acquisition allows Steven Madden to implement a strategy similar to what has been successful in footwear and accessories, utilizing the Steve Madden brand portfolio to reach customers across all distribution tiers.
Additionally, the acquisition is seen as a significant opportunity for growth, both in terms of sales and margins. The company anticipates leveraging its capabilities to enhance the performance of Almost Famous over time. With an expected revenue contribution of $30-$35 million and an EPS impact of 1-2 cents for the current financial year, this acquisition aligns seamlessly with Steven Madden's forward-looking growth strategy.
Wrapping Up
Despite the positive strides, SHOO acknowledges the softening of the industry trends starting in September. This, coupled with the impacts of the Middle East crisis on its joint ventures in Israel and the Middle East, led to a more cautious stance. Nevertheless, the company is committed to curating a merchandise mix attuned to prevailing trends, fortifying customer relationships through strategic marketing, advancing digital commerce initiatives, extending its global footprint, and optimizing expense management.
These factors led to the Zacks Rank #3 (Hold) company’s shares climbing 34.5%, outperforming the industry's 7.4% rise over the last three months.
3 Promising Stocks
A few better-ranked stocks are The Gap, Inc. (GPS - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current fiscal-year sales indicates growth of 387.5% from the previous year’s reported figures. GPS has a trailing four-quarter average earnings surprise of 138%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a 60.5% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 13.3% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 21.9% and 11.7%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 26.3%.