Steve Madden & Shoe Carnival Report Lackluster Sales During the Holidays

Holiday sales results rolled in Monday for footwear firms Steve Madden and Shoe Carnival Inc., and they continue to show weakness across retail during the period.

Steve Madden said its net sales for the fourth quarter — which included the November and December holiday period — were down 2.3 percent, to $336.4 million, missing the firm’s guidance for an increase of 1-2 percent. The decline was mostly driven by a 5.1 percent decrease in net sales in the wholesale division. Madden’s retail sales advanced 7.1 percent during the period, to $84.9 million, while retail comps increased 1.1 percent.

Despite the top-line miss and the stock’s 10 percent pullback over the past month, analysts remained generally upbeat on Steve Madden, citing the company’s “faster-fashion model and extremely on-trend assortment.”

“Based on our Q4 and Q1-to-date store checks, Steve Madden remains one of the best-selling fashion brands at U.S. wholesale currently, driven by a compellingly priced offering of key trends, including fashion sneakers, newer fabrications like velvet, cut-out styles and novelty,” Citi Research analyst Corinna Van der Ghinst wrote Monday.

Bolstering optimistic analysts, Steve Madden’s management — which attributed revenue declines to softness in cold-weather accessories and its decision to wind down its relationship with its Asia distributor — also said that it expects full-year diluted earnings per share at the high end of the company’s previously provided guidance range of $1.98 to $2.03.

Conversely, family-footwear retailer Shoe Carnival lowered its full-year sales and EPS guidance. FY16 sales are now expected to be in the range of $1.000 billion and $1.003 billion and EPS is now expected to range between $1.36 and $1.38. Previous guidance called for sales of $1.002 billion and $1.006 billion as well as EPS of $1.46 to $1.51.

The company said its combined comparable store sales for November and December declined 1.1 percent as an improvement in December sales was not enough to offset November’s weak sales.

“We promoted heavily in December, resulting in a projected gross margin decline of approximately 210 basis points for the fourth quarter,” Shoe Carnival president and CEO Cliff Sifford explained in a release Monday. “We have aggressively managed our inventories and expect our per-store inventories to be down mid-single digits at the end of the fiscal year.”

As of 11:10 a.m. ET today, Shoe Carnival’s shares had shed more than 6 percent, to $23.98. Shares for Madden were up nearly 4 percent, to $36.95.

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