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.