“It’s the same terrific execution as always,” said Steven Marotta, analyst at C.L. King & Associates. “As we move into the next year, you’ll see them open new retail doors.
They have sort of a five-point plan going on, focusing on [momentum in] the core Steve Madden business, accessories, international expansion [and acquiring] smaller growth brands.”
Camilo Lyon, analyst at Canaccord Genuity, agreed: “[The firm’s] third-quarter results demonstrate why they are the leader in fast-fashion footwear, with no signs of the fashion hits ebbing. We expect further outperformance.”
In a conference call with analysts, Madden Chairman and CEO Edward Rosenfeld said that notwithstanding an expected $1 million loss in sales from the damage caused by Hurricane Sandy last week, the quarter is shaping up to be another strong one for boots.
“Early in the season it was all about booties, but over the last couple of weeks, as the weather has turned, we’ve seen a nice pickup in the tall-shaft boot. We’re pleased about that as we head into the critical holiday selling season,” he said.
The executive also was upbeat on the Superga business, which he said should double in 2013 over 2012.
He added, “Retailers are very excited, [and] we’re getting expanding doors for spring — and in places such as Nordstrom and Bloomingdale’s, J.Crew and even Neiman Marcus.”
Other bright spots at the firm include the Steve Madden handbag division, which continues to be the fastest-growing area in the company, and gross margins, which are poised for more improvement in the fourth quarter.
For the period ended Sept. 30, the Long Island City, N.Y.-based firm earned a net income of $37.9 million, or 86 cents a share, an increase from $31.9 million, or 74 cents, in the same period a year ago. Total revenue grew 13.7 percent to $356.9 million.
The bottom line dipped slightly due to impairment and bad debt charges related to the bankruptcy of Bakers Footwear Group Inc., in which Madden had a 20 percent stake.
The charges negatively impacted net income by $3.7 million, or 8 cents. Otherwise, the firm would have beat analysts’ estimates for earnings per share of 90 cents on revenue of $353.9 million, as polled by Yahoo Finance.
The wholesale business advanced 12 percent to $311.5 million, driven by strong growth in the Steve Madden women’s division and a benefit from the acquisition of SM Canada. Retail sales rose 27.2 percent on the back of same-store sales that improved 8.6 percent.
Madden’s cash balance surged 84.9 percent year-over-year to $64.9 million. For the full year, the firm expects revenue to rise about 25 percent from 2011 levels, with EPS between $2.64 and $2.69. Madden shares hit an all-time high of $46.33