The Long Island City, N.Y.-based company reported a fourth-quarter earnings rise last week, making it one of the few strong footwear performers.
“It was one of the best-selling brands at retail in the fourth quarter,” said Jeff Van Sinderen, an analyst at B. Riley & Co. “They have good fashion and good quality at a good price point. That was the name of the game.”
Net income for the quarter ended Dec. 31 rose 53 percent to $7.2 million, or 40 cents a diluted share, compared with $4.7 million, or 23 cents, during the same period a year ago. Fourth-quarter sales rose almost 16 percent, thanks to strength in the women’s wholesale business.
Still, in a conference call last Tuesday, Chairman and CEO Ed Rosenfeld was conservative about the company’s 2009 forecast.
“While we are pleased with our recent performance and very excited about all the developments in our company in 2008, we recognize that we are operating in a challenging environment and will carefully control inventory, operating expenses and capital expenditures as we focus on driving the strong cash flow in 2009,” Rosenfeld said on the call. The firm expects fiscal 2009 sales to be down 6 percent to 8 percent, with earnings per share between $1.40 and $1.55.
“I think they’re just being conservative, and that’s the right thing to do,” Van Sinderen said. “It’s really hard to have visibility for any of these companies given the macro environment. And in a very bad environment for retailers, Steve Madden has been pretty good at delivering what they promised.”
Sam Poser, an analyst with Sterne Agee & Leach, agreed, lauding the company’s ability to hit fashion trends.
“From a trend perspective, the suede, slouch flat-bottom boots and demi-wedge leather boots continued to be stalwarts,” Poser wrote in a report.
The company reported that net income for fiscal 2008 fell to $28 million, or $1.51 a share, from $35.7 million, or $1.68 a share, last year, which included a one-time, $4.9 million pre-tax charge related to the resignation of Jamieson Karson, the company’s former CEO. Annual sales were up 6 percent to $457 million.