The lack of fashion trends and slow foot traffic hurt Steve Madden Ltd.’s results in the second quarter, with the company posting a decline in earnings and sales for the period.
The company posted a decline in earnings to $28 million, or 44 cents a diluted share, compared to $29 million, or 43 cents, year-on-year.
Net sales for the second quarter narrowed to $295.7 million, from $297.6 million a year earlier.
The result missed the Street’s forecast for sales of $313.5 million and was 1 cent shy of consensus forecasts for earnings per share of 45 cents.
Steve Madden shares slipped 5.2 percent, or $1.79, to $32.36 on the back of the result.
Ed Rosenfeld, company chairman and CEO, said the quarter was marred by weak mall traffic, stagnant fashion trends in the women’s market and the soft U.S. retail environment.
Market watchers had expected the company’s wholesale division would report stronger sales for the period than its retail division, citing retailers’ trust of the brand over other junior labels as one of the key drivers of its robust track record.
On the wholesale division’s performance in the second quarter, Rosenfeld said, “Our branded footwear business grew sales in the mid-single-digits range, led by our Steve Madden Men’s, Steve Madden Women’s, and Steven lines, while our private-label footwear business experienced a sales decrease, as expected, due primarily to a temporary reduction in sales with one customer during the quarter.”
Steve Madden’s wholesale business reported sales of $249.8 million in the second quarter, down from $251.4 million a year earlier. This included a solid gain in the branded-footwear business and strong growth in wholesale accessories.
On the retail side, Rosenfeld said that the absence of robust fashion drivers and weak foot traffic negatively impacted its full-price stores, noting that the company’s outlet stores posted a modest comparable store sales increase for the period.
Based on the weaker-than-expected quarter, the company lowered its guidance for the full year. It now expects sales to increase by between 2 and 4 percent year-on-year on diluted EPS in the range of $2 to $2.10.