Steven Madden Ltd. logged a mixed first quarter as the coronavirus outbreak stood in the way of a solid start to its fiscal year.
The New York-based shoe company today posted adjusted profits of $13 million, or earnings of 16 cents per share, compared to last year’s income of $35.1 million, or 42 cents per diluted share. Revenues for the three months ended March 31 decreased 13.6% to $359.2 million. Analysts had anticipated earnings of 20 cents per share and sales of $356.3 million.
“After a strong 2019, we got off to a good start to 2020, with revenue and earnings trending above plan through the first two months of the year and very positive consumer reaction to the spring product in our flagship Steve Madden brand,” chairman and CEO Edward Rosenfeld said in a statement. “Beginning in March, however, our business weakened materially due to the effects of the COVID-19 pandemic.”
The brand’s wholesale business fell 13% to $302.7 million, including a 15% dip in wholesale footwear and a 5.4% drop in wholesale accessories and apparel. The decline, said the company, was driven by “significant” order cancellations in March.
Retail revenues, on the other hand, sank 15.8% to $52.9 million as all of Steve Madden’s locations outside of China were shuttered to help prevent the spread of COVID-19.
“Our top priority has been protecting the safety and wellbeing of our employees and the broader community, followed by ensuring the long-term viability and strength of our business,” Rosenfeld added. “We entered this crisis with an exceptionally strong balance sheet, but we have nonetheless taken a number of precautionary but significant measures to preserve liquidity and enhance financial flexibility.”
Steve Madden has suspended share repurchases, halted its quarterly cash dividend and drawn down $50 million from its existing credit facility. It also joined many retailers two months ago in announcing furloughs and pay cuts, as well as reduced nonessential operating expenses, capital expenditures and planned inventory receipts.
“As we look ahead, we are confident that our strengths — including our brands, business model and balance sheet — will enable us to navigate this crisis and to thrive once conditions normalize,” Rosenfeld said.