Key Takeways From The ICR Conference: Steve Madden, Shoe Carnival & Sequential

This week, analysts and industry leaders convened for the ICR Conference in Orlando, Fla., to exchange insights around current consumer and economic trends.

Several footwear companies generated buzz at the event, held from Jan. 11-13, and Footwear News has everything you need to know.

Steve Madden Ltd.

The fashion-footwear company spurred conversation when it announced its Q4 preliminary earnings data at the forum. Steve Madden said its fourth-quarter net sales totaled $344.2 million, up a modest 0.5 percent year-over-year, but below Wall Street’s forecast for revenues of $360.3 million.

While the announcement was below expectations — Madden also said it now expects diluted earnings per share to come in at the low end of its previously provided guidance range of $1.85 to $1.95 for FY15 — analysts continue to display confidence in the brand.

Canaccord Genuity Inc. analyst Camilo Lyon came away from a dinner meeting with the firm’s CFO reassured that the company managed its businesses “relatively better than most” during a tough economic time and that it is “poised to come out of this period stronger and with greater market share as retailers consolidate their vendor base further.”

“Not surprisingly, the Q4 shortfall was related to weakness in tall shafted boots and cold-weather accessories at wholesale. In fact, much of the footwear shortfall came from a large department store that cancelled its December buys and, to a lesser extent, a weaker men’s-replenishment business,” Lyon added.

Shoe Carnival Inc. & Nike Inc.

“Meetings with Shoe Carnival revealed it is planning [to up] athletic [product offerings] for spring and could escalate on Olympic product,” wrote Citi Research analyst Kate McShane. “Further, with a warm Q4, athletic product sold well, and inventories are very clean.”

Nike, McShane added, will have another big year as athletic accelerates and the brand allocates Olympic colorways to two family footwear chains for the first time.

“Skate/Canvas was also highlighted as a strong category [for Shoe Carnival],” McShane noted. “We think this commentary is a positive read through to Nike, Skechers, Foot Locker, Finish Line and Dick’s Sporting Goods all buy-rated.”

Shoe Carnival also pre-announced earnings at the conference on Monday. The company reiterated its earnings outlook for fiscal year 2015 and said its comps for the first two months of the fourth quarter advanced 2.9 percent.

Sequential Brands Group

Lyon also met with Sequential Brands CEO Yehuda Shmidman. There, the conversation centered on the firm’s plans for Martha Stewart, organic growth in the current retail environment and capital availability.

“Responding to the concerns arising from an uncertain retail environment, management reiterated the benefits of its licensing model, which provides significant visibility into future cash flows based on its guaranteed minimum revenues,” Lyon wrote.

Lyon added that he believes international growth, category expansion, product extensions and e-commerce initiatives will help the firm  sustain high-single-digit organic growth into the foreseeable future.

“Overall, we remain optimistic that Sequential will achieve — and more likely surpass — its new three-year plan of $250 million in licensing revenue and $175 million of adjusted EBITDA,” Lyon said.

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