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01/11 03:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Financial performance is relatively flat with slight revenue increases and margin improvements, but higher operating expenses and a decline in net income. The Q&A reveals concerns about production shifts from China and tariff impacts, with management providing vague responses on inventory and margin recovery timelines. The dividend remains stable, but share repurchase activity is low. Given the market cap of $3.1 billion, the stock is likely to experience a neutral reaction, with minor fluctuations due to the lack of strong positive or negative catalysts.
Consolidated Revenue $553.5 million, a 0.2% increase compared to Q1 2024. The increase was partially offset by the movement of $13 million of shipments from January 2025 to December 2024.
Wholesale Revenue $439.3 million, up 0.2% compared to Q1 2024. Gains in the branded business were offset by declines in private label.
Wholesale Footwear Revenue $296.1 million, a 0.2% increase from Q1 2024.
Wholesale Accessories and Apparel Revenue $143.2 million, up 0.4% compared to Q1 2024.
Direct-to-Consumer Revenue $112.1 million, a decline of 0.2% compared to Q1 2024, with a modest increase in digital offset by a decline in brick-and-mortar.
Licensing Royalty Income $2.2 million, compared to $1.8 million in Q1 2024.
Consolidated Gross Margin 40.9%, a 20-basis point increase from 40.7% in Q1 2024, despite a negative impact from tariffs.
Wholesale Gross Margin 35.7%, compared to 35.1% in Q1 2024, with increases in both wholesale footwear and accessories.
Direct-to-Consumer Gross Margin 60.1%, down from 61.9% in Q1 2024, driven by increased promotional activity.
Operating Expenses $170.5 million or 30.8% of revenue, compared to $164.1 million or 29.7% of revenue in Q1 2024.
Operating Income $56.1 million or 10.1% of revenue, compared to $61 million or 11% of revenue in Q1 2024.
Effective Tax Rate 24%, compared to 23.6% in Q1 2024.
Net Income $42.4 million or $0.60 per diluted share, compared to $47 million or $0.65 per diluted share in Q1 2024.
Cash and Cash Equivalents $147.2 million as of March 31, 2025.
Inventory $238.6 million, compared to $202 million in Q1 2024, driven by longer lead times and accelerated shipments.
CapEx $9.8 million in Q1 2025.
Quarterly Cash Dividend $0.21 per share, payable on June 20, 2025.
New Product Launch: The product teams created on-trend spring assortments that resonated with consumers, supported by a global marketing campaign, House of Steve.
Market Expansion: The acquisition of Kurt Geiger, which had revenue of £400 million, is aimed at expanding in international markets and accessories categories.
Operational Efficiency: A reduction in force was completed, resulting in over $12 million in annual savings.
Production Shift: The company sharply accelerated its shift of production out of China, reducing the percentage of U.S. imports from China from 71% in 2024 to mid-teens for fall 2025.
Strategic Shift: The company is selectively raising prices to consumers and wholesale customers, monitoring demand elasticity.
Acquisition: The acquisition of Kurt Geiger is expected to enhance the growth profile of the company, aiming to make it a $1 billion brand.
Tariffs Impact: The company faces meaningful headwinds and heightened uncertainty due to the impact of new tariffs on goods imported into the United States, which were implemented in early April 2025.
Supply Chain Challenges: The company is experiencing longer lead times caused by disruptions, including those from the Suez Canal, and is diversifying production out of China to mitigate risks.
Production Shift: The company is sharply accelerating its shift of production out of China, aiming to reduce reliance from 71% in 2024 to mid-teens for fall 2025 and mid-single digits by spring 2026.
Price Adjustments: The company has begun selectively raising prices to consumers and wholesale customers, monitoring demand elasticity to assess the impact.
Operational Efficiency: The company completed a reduction in force, resulting in over $12 million in annual savings, as part of efforts to find expense savings and operational efficiencies.
Withdrawal of Financial Guidance: Due to uncertainty related to the impact of new tariffs, the company has withdrawn its 2025 financial guidance.
Production Shift: The company sharply accelerated its shift of production out of China, expecting to reduce the percentage of U.S. imports from China to the mid-teens for fall 2025 and to the mid-single digits by spring 2026.
Acquisition of Kurt Geiger: The acquisition of Kurt Geiger was completed, with an enterprise value of £289 million, aimed at enhancing growth in international markets and accessories categories.
Cost Savings Initiatives: A reduction in force was completed, resulting in over $12 million in annual savings.
Marketing Investment: Increased investment in a full funnel marketing strategy, including a global campaign featuring social media influencers.
Revenue Guidance: Due to uncertainty related to new tariffs, the company has withdrawn its 2025 financial guidance.
CapEx: CapEx for Q1 2025 was $9.8 million.
Dividend: A quarterly cash dividend of $0.21 per share was approved, payable on June 20, 2025.
Net Income: Net income for Q1 2025 was $42.4 million, or $0.60 per diluted share.
Quarterly Cash Dividend: The Board of Directors approved a quarterly cash dividend of $0.21 per share, payable on June 20, 2025, to stockholders of record as of the close of business on June 9, 2025.
Share Repurchase: The company did not repurchase any shares of its common stock in the open market during the first quarter, but spent $7.8 million on repurchases of shares through the net settlement of employee stock awards.
The earnings call indicates strong financial performance with positive growth in the direct-to-consumer segment and international expansion. Kurt Geiger's integration is expected to drive growth, and the strategic plan shows promising diversification and pricing strategies. Despite some margin pressures, the company is optimistic about recovery and long-term growth. The market's positive reception of price increases and reduced promotional days suggests strong demand. Overall, these factors combined with the company's market cap suggest a positive stock price movement, likely in the 2% to 8% range.
The earnings call summary presents mixed signals: strong basic financial performance and a positive shareholder return plan with a dividend. However, concerns arise from the withdrawal of revenue guidance due to tariff uncertainties and the impact of tariffs on operations. Product development and market strategy show promise with international growth and the Kurt Geiger acquisition, yet challenges remain with sourcing shifts and wholesale disruptions. The Q&A section highlights analysts' concerns about tariffs and unclear management responses, leading to a balanced sentiment. Given the market cap, a neutral stock price movement is expected over the next two weeks.
The earnings call presents a mixed picture. Financial performance is relatively flat with slight revenue increases and margin improvements, but higher operating expenses and a decline in net income. The Q&A reveals concerns about production shifts from China and tariff impacts, with management providing vague responses on inventory and margin recovery timelines. The dividend remains stable, but share repurchase activity is low. Given the market cap of $3.1 billion, the stock is likely to experience a neutral reaction, with minor fluctuations due to the lack of strong positive or negative catalysts.
The earnings call indicates strong financial performance with a 13% revenue increase and raised revenue guidance, particularly in wholesale accessories. Despite a slight decline in gross margin, the company is expanding its sourcing base to mitigate tariff risks. The share repurchase program and dividend maintain shareholder value. Positive trends in the handbag and footwear segments, alongside successful marketing efforts, bolster the outlook. Given the company's $3.1 billion market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
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