Madden Raises Guidance

Madden Raises Guidance
Inside the Steve Madden store on 34th Street in New York
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After a strong first quarter, Steven Madden Ltd. raised its full-year forecast.

For the quarter ended March 31, the Long Island City, N.Y.-based firm earned $21.9 million, or 50 cents a share, up 22.5 percent from $17.9 million, or 42 cents, in the same period a year ago.

Revenue totaled $266 million, an increase of 60.5 percent from last year, buoyed in part by a comparable store sales increase of 11.9 percent.

Analysts were looking for EPS of 50 cents on revenue of $249.9 million, as polled by Yahoo Finance.

The firm said wholesale business surged 70.4 percent to $228.9 million, driven by double-digit organic growth in both wholesale footwear and accessories, as well as the impact from the acquisitions of Topline, Cejon and SM Canada.

Retail revenue grew 17.6 percent to $37 million.

Gross margin, however, slumped to 36.1 percent, from 41.7 percent a year ago, likely causing the firm’s stock to slip 5 percent in Thursday morning trading.

The decline was due to shifts in contribution to revenue, as a result of the acquisition of Topline and the growth in the Adesso Madden private label business, which increased more than 90 percent year over year. But retail gross margin increased to 60.1 percent, from 58.1 percent, reflecting improvement in both full-price and outlet stores, the firm said.

Edward Rosenfeld, Steven Madden’s chairman and CEO, said in a statement, “We were particularly pleased with our core Steve Madden brand, which recorded strong growth across categories, channels and geographies. The ongoing momentum in our flagship brand, combined with the growth we are seeing from our newer brands and businesses, gives us confidence that we can continue to drive sales and earnings gains in 2012 and beyond.”

At the end of the period, the firm held $62 million in cash and cash equivalents, and no debt.

For fiscal 2012, the company expects net sales to increase 24 percent to 26 percent over 2011 levels, up from a previous guidance of a 21 percent to 23 percent increase. EPS is now expected to come in between $2.62 and $2.72, also up from previous guidance of between $2.60 and $2.70.

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