Despite Slow Retail Environment, Steve Madden Surpasses Expectations

Steve Madden sandals
Steve Madden Darryn sandals in black suede.
Zappos.

Steve Madden continues to outperform in a tepid retail environment.

The fashion footwear maker today reported third quarter results before the market open that topped expectations across the board.

The company said its net income during the quarter climbed 2 percent year-over-year, to $43.8 million, or 74 cents per diluted share, topping market watchers’ forecasts for diluted earnings per share of 70 cents.

Revenues decreased 1.2 percent year-over-year, to $408.4 million, but still beat estimates predicting revenues of $404.6 million.

As expected, the company’s wholesale sales slipped 2.9 percent in Q3, to $346.6 million, lapping tough compares year-over-year. (Net sales for the wholesale business in the third quarter of 2015 included $14.9 million related to the one-time Madden Girl cold-weather capsule collection that was not repeated in 2016.)

Retail net sales advanced 9.6 percent, to $61.8 million, while same-store sales rose 1.3 percent in the quarter.

Steve Madden chairman and CEO Ed Rosenfeld said he was pleased with the third quarter results, which exceeded the firm’s top and bottom line expectations.

Our core Steve Madden women’s footwear business achieved outstanding growth during the quarter, as did our Dolce Vita line,” Rosenfeld noted in a release. “In addition, we delivered strong gross margin expansion, as our on-trend merchandise assortment and disciplined inventory management resulted in higher initial mark-ups and reduced closeouts and markdown allowances.”

Rosenfeld added that despite a generally challenging retail environment and ongoing cautiousness in the wholesale channel, the firm’s third quarter win has led to a more upbeat full-year guidance.

Steve Madden narrowed its guidance range for diluted EPS and now expects EPS in the range of $1.98 to $2.03, or the high end of the previous range of $1.93 to $2.03. Updated guidance implies Q4 EPS of 49 cents to 54 cents, compared with consensus of 50 cents.

As of 9:30 a.m. ET today, the firm’s stock had gained 6.3 percent, to $35.51.