Steve Madden Posts Sales, Earnings Beat in Q1 as Wholesale Channel Improves
Steve Madden on Wednesday reported sales and earnings for the first quarter of 2024 that beat expectations.
Revenues in the first quarter were $552.4 million, up 19.1 percent compared to the same quarter in 2023. Adjusted net income was $47 million, or 65 cents per diluted share, compared to $37.6 million and 50 cents per diluted share the prior year. Sales and profits were ahead of what analysts surveyed by Yahoo were looking for: $526.16 million in revenues and 56 cents in EPS.
Chairman and chief executive officer Edward Rosenfeld said in a statement that the results represented a “strong start to 2024.”
“We also demonstrated tangible progress on our key strategic initiatives, with double-digit percentage revenue growth in international markets, non-footwear categories and direct-to-consumer channels as well as a return to year-over-year revenue growth in the U.S. wholesale footwear business,” Rosenfeld said. “Looking ahead, we are confident that the continued execution of our strategy will enable us to drive sustainable revenue and earnings growth and create significant value for our stakeholders over the long term.”
The wholesale channel, which was heavily challenged throughout 2023, continued to improve for the company in Q1, with revenues in that channel up 21 percent to $438.2 million. Wholesale footwear revenue was up 4.7 percent and wholesale accessories and apparel revenues increased 78.6 percent. However, gross profit as a percentage of wholesale revenue declined to 35.1 percent from 37 percent the prior year due to a shift towards its private label footwear business and the impact of the newly acquired Almost Famous, which Steve Madden snapped up in October for $52 million to bolster its apparel business.
Last week, Williams Trading analyst Sam Poser predicted in a note that while wholesale trends have improved for the footwear company, its larger accounts have still been cautious with their buys in the first quarter, which may have affected sales in the period. The analyst noted that cold weather led to slower than planned sandal sales in the period, and that the primary driver of fiscal 2024 wholesale footwear growth is expected to come from the mass channel.
Meanwhile, direct-to-consumer revenue in Q1 increased 12.8 percent to $112.3 million, driven by growth in brick-and-mortar and e-commerce.
The brand reaffirmed its 2024 outlook from the prior quarter and said it still expects revenues to increase 11 to 13 percent compared to the prior year. Diluted EPS is still expected to be in the range of $2.55 to $2.65.