Steve Madden Stock Slips On Q2 Revenue Miss, Lowered Sales Outlook

Steve Madden stecy sandal
"The Stecy" sandal by Steve Madden.
Zappos.

Steve Madden’s shares remained in the red throughout early morning trading — down 5 percent as of 10:20 a.m. ET — on the heels of a softer-than-expected second-quarter earning release.

Chairman and CEO Ed Rosenfeld said the company saw “robust” gains in the wholesale divisions of its branded women’s business and Dolce Vita line, but a sluggish private-label shoe business and disappointing orders from some international distributors have posed challenges.

While our owned and joint-venture international businesses are on plan, we have seen a slowdown in orders and shipping to our distributors in Asia and the [United Arab Emirates],” Rosenfeld said during the call.

Madden’s chief also said that the company’s private-label business has struggled with initial orders; boot orders in particular are coming in below the firm’s expectations.

Steve Madden’s Q2 net income increased 0.7 percent in the quarter, to $24.7 million, or 42 cents per diluted share, from $24.5 million, or 40 cents per diluted share in the comparable period. Those results were in line with analysts’ forecasts.

Revenues, which gained 0.6 percent year-over-year, to $325.4 million, missed analysts’ expectations for revenues of $329.5 million.

As a result of ongoing softness in private-label footwear and international distribution, the firm reduced its full-year revenue outlook and now expects growth in the range of 0 percent to 1 percent over the previous year, compared with prior expectations for growth in the range of 2 percent to 4 percent.

Rosenfeld added: “However, our expectation for gross margin has increased, partly because of the sales mix — private label and international distributor are lower-margin businesses — and partly because of stronger-than-anticipated trends in businesses such as Steve Madden women’s and Dolce Vita wholesale footwear.”

The company continues to expect diluted EPS  in the range of $1.93 to $2.03.