Madden Reports Strong Q4, Bullish on Year Ahead

BOSTON — With fourth-quarter earnings that nearly doubled and easily beat analyst projections, Steven Madden Ltd. has impressed Wall Street yet again.

“We believe that our ability to deliver consistent performance even in a difficult environment speaks to our industry-leading design and operational capabilities. Steve [Madden] and his team remain on target with fashion trends — our core business — enabling us to maintain our position as a market share leader in this space,” Edward Rosenfeld, chairman and CEO of Steven Madden, said on the firm’s quarterly conference call held last Thursday.

The firm guided that full-year 2010 revenues should rise by 11 percent to 13 percent, with earnings per share in the $3.10-to-$3.30 range. Analysts were expecting sales of $533.9 million and EPS of $3.06 at press time.

Further, Rosenfeld said on the call that the company now expects to double EPS in the next five years.

Analyst Jeff Van Sinderen of B. Riley & Co. said Steven Madden is in “a really good position right now” to have a successful 2010. “They’re methodically going about expanding most segments of their business, whether it’s international or licensing,” he said. “And they will have other deals announced this year.”

That’s in addition to offering “compelling, exciting product at the right price point,” Van Sinderen said. “If you deliver great product to your customer, you’re going to have great profitability.”

Trendwise, Rosenfeld said, Steven Madden expects “another good boot year” in women’s. He added, “We got some very nice end-of-season tests on new boots, so we think it’s not going to be the same types of boots that necessarily sold well this [past] year.”

The firm reported last week net earnings of $13.6 million, or 73 cents a diluted share, compared with $7.2 million, or 40 cents, the prior year. Analysts had expected a profit of 66 cents in the latest quarter. Quarterly revenues increased to $139.5 million — ahead of estimates for $128.9 million — from $119.1 million last year.

Van Sinderen said the firm’s report was “significantly better than what I expected. …. Every metric improved, from gross margins to both retail and wholesale sales, and same-store sales were up. It was a very strong quarter.”

Steven Madden said quarterly comparable-store sales rose 7 percent, with total retail sales registering $41.1 million versus $40 million a year ago. With 89 stores at the end of the year, the firm operated seven fewer stores than a year ago.

By category, footwear sales rose 30 percent to $77.8 million and wholesale was up 24 percent at $98.4 million.

In the year, the company posted a profit of $50.1 million, or $2.73, from $28 million, or $1.51, last year. Annual revenues topped $500 million for the first time, at $503.6 million.

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