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Steven Madden (SHOO) Q1 Earnings Beat, Revenues Increase Y/Y
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Steven Madden, Ltd. (SHOO - Free Report) reported better-than-expected results in first-quarter 2024, with the top and bottom lines surpassing the Zacks Consensus Estimate. Also, revenues and earnings increased year over year.
The company made significant strides in key strategic areas, achieving double-digit revenue growth in the international markets, non-footwear categories, and direct-to-consumer channels, along with a revenue revival in the U.S. wholesale footwear business. The ongoing strategic efforts are expected to help sustain revenue and earnings growth, thereby generating substantial value for stakeholders over the long term.
Over the past six months, shares of this company have gained 13.6% against the industry’s 11.5% drop.
Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden posted adjusted quarterly earnings of 65 cents a share, which beat the Zacks Consensus Estimate of 56 cents. The same increased 30% from 50 cents in the prior-year period.
Total revenues rose 19.1% year over year to $552.4 million. Net revenues of $550.6 million went up 19.2%, and commission and licensing fee income of $1.8 million decreased 13.5% from the year-ago period. The top line beat the consensus estimate of $522 million.
Adjusted gross profit rose 15.3% year over year to $225 million. We note that the adjusted gross margin contracted 130 basis points (bps) to 40.7%.
Gross profit, as a percentage of wholesale revenues, decreased 190 bps to 35.1%, driven by the effects of Almost Famous and a shift in the wholesale footwear mix toward the private label business. However, gross profit, as a percentage of direct-to-consumer revenues, increased 270 bps to 61.9% due to reduced promotional activity.
This Zacks Rank #3 (Hold) company’s adjusted operating expenses increased 11.3% year over year to $164.1 million. However, as a percentage of revenues, adjusted operating expenses declined 210 bps year over year to 29.7%.
Steven Madden reported an adjusted operating income of $61 million, up 27.8% from the same quarter a year ago. The adjusted operating margin increased 80 bps to 11%.
Image Source: Zacks Investment Research
Segmental Performance
Revenues for the Wholesale business improved 21% year over year to $438.2 million. We note that Wholesale footwear revenues increased 4.7% year over year, while Wholesale accessories/apparel revenues grew 78.6%. Excluding the recent acquisition of Almost Famous, wholesale revenues rose 9.7% year over year, and wholesale accessories and apparel revenues grew 27.4%. Our model suggested total Wholesale revenues of $416.5 million for the first quarter, indicating 15% year-over-year growth.
DTC revenues increased 12.8% to $112.3 million, driven by an increase in the brick-and-mortar and e-commerce businesses. Our model suggested total DTC revenues of $108 million for the first quarter, implying 8.4% year-over-year growth.
SHOO ended the first quarter with 253 brick-and-mortar retail outlets, five e-commerce websites and 25 company-operated concessions across the international markets.
Other Financial Aspects
Steven Madden ended the first quarter with cash and cash equivalents of $131.5 million, short-term investments of $11.6 million, and stockholders’ equity of $825.2 million, excluding non-controlling interest of $18.4 million. Management incurred a capital expenditure of $4 million in the first quarter.
In the reported quarter, SHOO repurchased $37.3 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. At the end of the first quarter, there was approximately $143 million remaining under the share repurchase authorization. Moreover, management approved a quarterly cash dividend of 21 cents per share, payable Jun 21, 2024, to stockholders of record as of Jun 10.
Outlook
For 2024, the company anticipates an 11-13% increase in revenues from that reported in 2023, with adjusted earnings of $2.55-$2.65 per share. Notably, the company reported earnings of $2.30 per share in 2023.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 12.5% and 3.3% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank of 1. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 19.1% and 5.6% from the year-ago period’s reported figures.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company has a Zacks Rank of 2 (Buy) at present.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9% from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
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Steven Madden (SHOO) Q1 Earnings Beat, Revenues Increase Y/Y
Steven Madden, Ltd. (SHOO - Free Report) reported better-than-expected results in first-quarter 2024, with the top and bottom lines surpassing the Zacks Consensus Estimate. Also, revenues and earnings increased year over year.
The company made significant strides in key strategic areas, achieving double-digit revenue growth in the international markets, non-footwear categories, and direct-to-consumer channels, along with a revenue revival in the U.S. wholesale footwear business. The ongoing strategic efforts are expected to help sustain revenue and earnings growth, thereby generating substantial value for stakeholders over the long term.
Over the past six months, shares of this company have gained 13.6% against the industry’s 11.5% drop.
Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden, Ltd. price-consensus-eps-surprise-chart | Steven Madden, Ltd. Quote
Q1 Highlights
Steven Madden posted adjusted quarterly earnings of 65 cents a share, which beat the Zacks Consensus Estimate of 56 cents. The same increased 30% from 50 cents in the prior-year period.
Total revenues rose 19.1% year over year to $552.4 million. Net revenues of $550.6 million went up 19.2%, and commission and licensing fee income of $1.8 million decreased 13.5% from the year-ago period. The top line beat the consensus estimate of $522 million.
Adjusted gross profit rose 15.3% year over year to $225 million. We note that the adjusted gross margin contracted 130 basis points (bps) to 40.7%.
Gross profit, as a percentage of wholesale revenues, decreased 190 bps to 35.1%, driven by the effects of Almost Famous and a shift in the wholesale footwear mix toward the private label business. However, gross profit, as a percentage of direct-to-consumer revenues, increased 270 bps to 61.9% due to reduced promotional activity.
This Zacks Rank #3 (Hold) company’s adjusted operating expenses increased 11.3% year over year to $164.1 million. However, as a percentage of revenues, adjusted operating expenses declined 210 bps year over year to 29.7%.
Steven Madden reported an adjusted operating income of $61 million, up 27.8% from the same quarter a year ago. The adjusted operating margin increased 80 bps to 11%.
Image Source: Zacks Investment Research
Segmental Performance
Revenues for the Wholesale business improved 21% year over year to $438.2 million. We note that Wholesale footwear revenues increased 4.7% year over year, while Wholesale accessories/apparel revenues grew 78.6%. Excluding the recent acquisition of Almost Famous, wholesale revenues rose 9.7% year over year, and wholesale accessories and apparel revenues grew 27.4%. Our model suggested total Wholesale revenues of $416.5 million for the first quarter, indicating 15% year-over-year growth.
DTC revenues increased 12.8% to $112.3 million, driven by an increase in the brick-and-mortar and e-commerce businesses. Our model suggested total DTC revenues of $108 million for the first quarter, implying 8.4% year-over-year growth.
SHOO ended the first quarter with 253 brick-and-mortar retail outlets, five e-commerce websites and 25 company-operated concessions across the international markets.
Other Financial Aspects
Steven Madden ended the first quarter with cash and cash equivalents of $131.5 million, short-term investments of $11.6 million, and stockholders’ equity of $825.2 million, excluding non-controlling interest of $18.4 million. Management incurred a capital expenditure of $4 million in the first quarter.
In the reported quarter, SHOO repurchased $37.3 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. At the end of the first quarter, there was approximately $143 million remaining under the share repurchase authorization. Moreover, management approved a quarterly cash dividend of 21 cents per share, payable Jun 21, 2024, to stockholders of record as of Jun 10.
Outlook
For 2024, the company anticipates an 11-13% increase in revenues from that reported in 2023, with adjusted earnings of $2.55-$2.65 per share. Notably, the company reported earnings of $2.30 per share in 2023.
Eye These Solid Picks
A few better-ranked stocks are American Eagle Outfitters Inc. (AEO - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and The Gap, Inc. (GPS - Free Report) .
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 12.5% and 3.3% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank of 1. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 19.1% and 5.6% from the year-ago period’s reported figures.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company has a Zacks Rank of 2 (Buy) at present.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.9% from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.