• Steve Madden Announces Third Quarter 2023 Results

    المصدر: Nasdaq GlobeNewswire / 08 نوفمبر 2023 05:59:00   America/Chicago

    LONG ISLAND CITY, N.Y., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel, today announced financial results for the third quarter ended September 30, 2023.

    Amounts referred to as “Adjusted” are non-GAAP measures that exclude the items defined as “Non-GAAP Adjustments” in the “Non-GAAP Reconciliation” section.

    Third Quarter 2023 Results

    • Revenue decreased 0.7% to $552.7 million compared to $556.6 million in the same period of 2022.
    • Gross profit as a percentage of revenue was 42.1% compared to 41.2% in the same period of 2022.
    • Operating expenses as a percentage of revenue were 27.1%, which is the same percentage as in the same period of 2022. Adjusted operating expenses as a percentage of revenue were 27.0%, also the same percentage as in the same period of 2022.
    • Income from operations totaled $82.7 million, or 15.0% of revenue, compared to $78.8 million, or 14.1% of revenue, in the same period of 2022. Adjusted income from operations totaled $83.4 million, or 15.1% of revenue, compared to $79.0 million, or 14.2% of revenue, in the same period of 2022.
    • Net income attributable to Steven Madden, Ltd. was $64.4 million, or $0.87 per diluted share, compared to $61.3 million, or $0.79 per diluted share, in the same period of 2022. Adjusted net income attributable to Steven Madden, Ltd. was $65.1 million, or $0.88 per diluted share, compared to $61.5 million, or $0.79 per diluted share, in the same period of 2022.

    Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased to return to year-over-year earnings growth in the third quarter, demonstrating the strength and durability of our business model in challenging operating environments. Our team prudently managed inventory and expenses – which enabled us to drive operating margin improvement in both wholesale and direct-to-consumer channels – while continuing to invest in our long-term growth initiatives. While softer trends across the industry since September have left us incrementally more cautious on the near-term outlook, we remain confident that our core strengths – our people, brands and business model – will enable us to deliver sustainable revenue and earnings growth over the long term.”

    Third Quarter 2023 Channel Results

    Revenue for the wholesale business was $433.5 million, a 0.3% decrease compared to the third quarter of 2022. Wholesale footwear revenue decreased 7.5%, while wholesale accessories/apparel revenue increased 22.7%. Gross profit as a percentage of wholesale revenue increased to 35.9% compared to 35.3% in the third quarter of 2022 driven by margin improvement in the wholesale accessories/apparel segment.

    Direct-to-consumer revenue was $116.4 million, a 1.8% decrease compared to the third quarter of 2022 driven by a decline in the e-commerce business. Gross profit as a percentage of direct-to-consumer revenue improved to 63.7% compared to 61.2% in the third quarter of 2022 driven by lower freight expenses and reduced promotional activity.

    The Company ended the quarter with 251 brick-and-mortar retail stores and five e-commerce websites, as well as 22 company-operated concessions in international markets.

    Balance Sheet and Cash Flow Highlights

    As of September 30, 2023, cash, cash equivalents and short-term investments totaled $206.4 million. Inventory totaled $205.7 million, a 15.8% decrease compared to the third quarter of 2022.

    During the third quarter of 2023, the Company spent $40.0 million on repurchases of its common stock, which includes shares acquired through the net settlement of employees’ stock awards.

    Quarterly Cash Dividend

    The Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on December 29, 2023 to stockholders of record as of the close of business on December 15, 2023.

    Updated 2023 Outlook

    The Company is updating its fiscal 2023 guidance. For fiscal 2023, the Company now expects revenue will decrease approximately 7% compared to 2022. The Company now expects diluted EPS will be approximately $2.35. The Company now expects Adjusted diluted EPS will be approximately $2.40.

    Conference Call Information

    Interested stockholders are invited to listen to the conference call scheduled for today, November 8, 2023, at 8:30 a.m. Eastern Time, which will include a discussion of the Company's third quarter 2023 earnings results and 2023 outlook. The call will be webcast live on the Company’s website at https://investor.stevemadden.com. A webcast replay of the conference call will be available on the Company's website or via the following webcast link https://edge.media-server.com/mmc/p/oqycft6w
    beginning today at approximately 10:00 a.m. Eastern Time.

    About Steve Madden

    Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo® and GREATS®, Steve Madden licenses footwear and handbag categories for the Anne Klein® brand. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers and independent stores. Steve Madden also directly operates brick-and-mortar retail stores and e-commerce websites. Steve Madden also licenses certain of its brands to third parties for the marketing and sale of certain products in the apparel, accessory and home categories. For local store information and the latest boots, booties, fashion sneakers, dress shoes, sandals, and more, please visit www.stevemadden.com, www.dolcevita.com and our other branded websites.

    Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995

    This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, “estimate”, or “confident” and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations, and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:

    • geopolitical tensions in the regions in which we operate and any related challenging macroeconomic conditions globally that may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations and financial condition;
    • the Company’s ability to navigate shifting macro-economic environments, including but not limited to inflation and the potential for recessionary conditions;
    • the Company’s ability to accurately anticipate fashion trends and promptly respond to consumer demand;
    • the Company’s ability to compete effectively in a highly competitive market;
    • the Company’s ability to adapt its business model to rapid changes in the retail industry;
    • supply chain disruptions to product delivery systems and logistics, and the Company’s ability to properly manage inventory;
    • the Company’s reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as their ability to meet the Company’s quality standards;
    • the Company’s dependence on the retention and hiring of key personnel;
    • the Company’s ability to successfully implement growth strategies and integrate acquired businesses;
    • changes in trade policies and tariffs imposed by the United States government and the governments of other nations in which the Company manufactures and sells products;
    • the Company’s ability to adequately protect its trademarks and other intellectual property rights;
    • the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or a pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
    • legal, regulatory, political and economic risks that may affect the Company’s sales in international markets;
    • changes in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial results;
    • additional tax liabilities resulting from audits by various taxing authorities;
    • cybersecurity risks and costs of defending against, mitigating, and responding to data security threats and breaches impacting the Company;
    • the Company’s ability to achieve operating results that are consistent with prior financial guidance; and
    • other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

    The Company does not undertake, and disclaims, any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments, or otherwise.

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME

    (In thousands, except per share amounts)
    (Unaudited)

      Three Months Ended Nine Months Ended
      September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
             
    Net sales $549,846 $553,120 $1,454,420 $1,643,144
    Commission and licensing fee income  2,886  3,523  7,448  8,222
    Total revenue  552,732  556,643  1,461,868  1,651,366
    Cost of sales  320,107  327,167  844,281  976,227
    Gross profit  232,625  229,476  617,587  675,139
    Operating expenses  149,887  150,724  444,298  433,252
    Income from operations  82,738  78,752  173,289  241,887
    Interest and other income – net  1,922  1,340  5,898  106
    Income before provision for income taxes  84,660  80,092  179,187  241,993
    Provision for income taxes  19,552  18,335  42,219  56,728
    Net income  65,108  61,757  136,968  185,265
    Less: net income attributable to noncontrolling interest  695  460  1,295  995
    Net income attributable to Steven Madden, Ltd. $64,413 $61,297 $135,673 $184,270
             
    Basic net income per share $0.88 $0.81 $1.84 $2.41
             
    Diluted net income per share $0.87 $0.79 $1.81 $2.35
             
    Basic weighted average common shares outstanding  72,943  75,598  73,679  76,463
             
    Diluted weighted average common shares outstanding  74,071  77,396  74,917  78,579
             
    Cash dividends declared per common share $0.21 $0.21 $0.63 $0.63
                 

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED BALANCE SHEETS

    (In thousands)

        As of  
      September 30, 2023 December 31, 2022 September 30, 2022
      (Unaudited)   (Unaudited)
    ASSETS      
    Current assets:      
    Cash and cash equivalents $191,804 $274,713 $139,194
    Short-term investments  14,641  15,085  9,051
    Accounts receivable, net of allowances  58,538  37,937  48,601
    Factor accounts receivable  342,871  248,228  341,141
    Inventories  205,693  228,752  244,315
    Prepaid expenses and other current assets  24,334  22,989  25,531
    Income tax receivable and prepaid income taxes  15,702  15,853  9,416
    Total current assets  853,583  843,557  817,249
    Note receivable – related party  100  401  499
    Property and equipment, net  44,920  40,664  36,861
    Operating lease right-of-use asset  113,058  90,264  90,407
    Deposits and other  10,567  12,070  3,655
    Deferred taxes  1,570  1,755  6,945
    Goodwill – net  168,612  168,085  167,652
    Intangibles – net  99,817  101,192  102,967
    Total Assets $1,292,227 $1,257,988 $1,226,235
    LIABILITIES      
    Current liabilities:      
    Accounts payable $140,623 $130,542 $99,173
    Accrued expenses  129,754  138,523  119,650
    Operating leases – current portion  36,521  29,499  30,234
    Income taxes payable  13,519  9,403  19,161
    Contingent payment liability  1,153  1,153  440
    Accrued incentive compensation  10,190  11,788  11,423
    Total current liabilities  331,760  320,908  280,081
    Operating leases – long-term portion  91,916  79,128  79,906
    Deferred tax liabilities  3,923  3,923  3,378
    Other liabilities  10,914  10,166  10,930
    Total Liabilities  438,513  414,125  374,295
           
    STOCKHOLDERS’ EQUITY      
    Total Steven Madden, Ltd. stockholders’ equity  837,038  831,553  842,303
    Noncontrolling interest  16,676  12,310  9,637
    Total stockholders’ equity  853,714  843,863  851,940
    Total Liabilities and Stockholders’ Equity $1,292,227 $1,257,988 $1,226,235
     

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In thousands)
    (Unaudited) 

      Nine Months Ended
      September 30, 2023 September 30, 2022
    Cash flows from operating activities:    
    Net income $136,968  $185,265 
    Adjustments to reconcile net income to net cash provided by operating activities:    
    Stock-based compensation  18,169   18,298 
    Depreciation and amortization  11,138   15,425 
    Loss on disposal of fixed assets  204   312 
    Impairment of lease right-of-use asset  95   — 
    Deferred taxes  —   (2,364)
    Accrued interest on note receivable - related party  (6)  (12)
    Notes receivable - related party  307   307 
    Change in valuation of contingent payment liabilities  —   (6,520)
    Other operating activities  417   — 
    Changes, net of acquisitions, in:    
    Accounts receivable  (20,601)  (25,623)
    Factor accounts receivable  (93,274)  23,841 
    Inventories  23,541   6,842 
    Prepaid expenses, income tax receivables, prepaid taxes, and other assets  (264)  120 
    Accounts payable and accrued expenses  4,991   (140,144)
    Accrued incentive compensation  (1,598)  (3,448)
    Leases and other liabilities  (2,331)  (5,213)
    Payment of contingent consideration  —   (339)
         
    Net cash provided by operating activities  77,756   66,747 
         
    Cash flows from investing activities:    
    Capital expenditures  (13,899)  (10,115)
    Purchase of a trademark  —   (2,000)
    Purchases of short-term investments  (15,979)  (38,951)
    Maturity/sale of short-term investments  16,335   73,726 
         
    Net cash (used in)/provided by investing activities  (13,543)  22,660 
         
    Cash flows from financing activities:    
    Common stock repurchased and net settlements of stock awards  (104,215)  (112,105)
    Proceeds from exercise of stock options  1,171   415 
    Investment of noncontrolling interest  4,582   — 
    Cash dividends paid on common stock  (47,594)  (49,774)
    Payment of contingent consideration  —   (4,770)
    Distribution of noncontrolling interest  (1,102)  — 
    Net cash used in financing activities  (147,158)  (166,234)
    Effect of exchange rate changes on cash and cash equivalents  36   (3,478)
    Net decrease in cash and cash equivalents  (82,909)  (80,305)
    Cash and cash equivalents – beginning of period  274,713   219,499 
         
    Cash and cash equivalents – end of period $191,804  $139,194 
     

    STEVEN MADDEN, LTD. AND SUBSIDIARIES

    NON-GAAP RECONCILIATION

    (In thousands, except per share amounts)

    (Unaudited)

    The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business.   Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business.   The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.  

    Table 1 - Reconciliation of GAAP operating expenses to Adjusted operating expenses    
      Three Months Ended Nine Months Ended
      September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
             
    GAAP operating expenses $149,887  $150,724  $444,298  $433,252
    Non-GAAP Adjustments  (622)  (203)  (2,298)  1,551
    Adjusted operating expenses $149,265  $150,521  $442,000  $434,803


    Table 2 - Reconciliation of GAAP income from operations to Adjusted income from operations
      Three Months Ended Nine Months Ended
      September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
             
    GAAP income from operations $82,738 $78,752 $173,289 $241,887 
    Non-GAAP Adjustments  622  203  2,298  (1,551)
    Adjusted income from operations $83,360 $78,955 $175,587 $240,336 


    Table 3 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
      Three Months Ended Nine Months Ended
      September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
             
    GAAP provision for income taxes $19,552  $18,335 $42,219 $56,728 
    Non-GAAP Adjustments  (85)  47  309  (1,887)
    Adjusted provision for income taxes $19,467  $18,382 $42,528 $54,841 


    Table 4 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
      Three Months Ended Nine Months Ended
      September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
             
    GAAP net income attributable to Steven Madden, Ltd. $64,413 $61,297 $135,673 $184,270
    Non-GAAP Adjustments  707  155  1,989  335
    Adjusted net income attributable to Steven Madden, Ltd. $65,120 $61,452 $137,662 $184,605
             
    GAAP diluted net income per share $0.87 $0.79 $1.81 $2.35
             
    Adjusted diluted net income per share $0.88 $0.79 $1.84 $2.35


    Table 5 - Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in 2023 outlook
      2023 Outlook
       
    GAAP diluted net income per share $2.35
    Non-GAAP Adjustments  0.05
    Adjusted diluted net income per share $2.40

    Non-GAAP Adjustments include the items below.

    For the third quarter of 2023:

    • $2.7 million pre-tax ($2.3 million after-tax) expense in connection with the write-off of an investment in a subsidiary in Asia, included in operating expenses.
    • $2.2 million pre-tax ($1.6 million after-tax) benefit in connection with the dissolution of an entity in Asia, included in operating expenses.

    For the third quarter of 2022:

    • $1.8 million pre-tax ($1.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
    • $1.6 million pre-tax ($1.2 million after-tax) benefit in connection with the change in valuation of contingent consideration, included in operating expenses.

    For the 2023 outlook:

    • $2.7 million pre-tax ($2.3 million after-tax) expense in connection with the write-off of an investment in a subsidiary in Asia, included in operating expenses.
    • $2.2 million pre-tax ($1.6 million after-tax) benefit in connection with the dissolution of an entity in Asia, included in operating expenses.
    • $2.2 million pre-tax ($1.6 million after-tax) expense in connection with an acquisition and the formation of joint ventures, included in operating expenses.
    • $1.7 million pre-tax ($1.3 million after-tax) expense in connection with certain severances, termination benefits and a corporate office relocation, included in operating expenses.

    Contact

    Steven Madden, Ltd.
    VP of Corporate Development & Investor Relations
    Danielle McCoy
    718-308-2611
    InvestorRelations@stevemadden.com 


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