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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Consolidated Revenue $624.7 million, a 13% increase compared to Q3 2023. Excluding Almost Famous, revenue grew 5.5%.
Wholesale Revenue $495.7 million, up 14.4% compared to Q3 2023. Excluding Almost Famous, wholesale revenue increased 4.8%.
Wholesale Footwear Revenue $299.3 million, a 2.2% decrease from Q3 2023, with growth in private label offset by a decline in branded business.
Wholesale Accessories and Apparel Revenue $196.4 million, up 54.2% compared to Q3 2023 or 21.6% excluding Almost Famous, driven by strong growth in Steve Madden handbags.
Direct-to-Consumer Revenue $125.5 million, a 7.8% increase compared to Q3 2023, with stronger performance in e-commerce.
Licensing Royalty Income $3.5 million, compared to $2.9 million in Q3 2023.
Consolidated Gross Margin 41.6%, down from 42.1% in Q3 2023 due to the impact of Almost Famous. Excluding Almost Famous, gross margin increased 50 basis points.
Wholesale Gross Margin 35.5%, compared to 35.9% in Q3 2023, impacted by Almost Famous. Excluding Almost Famous, gross margin increased 30 basis points.
Direct-to-Consumer Gross Margin 64%, up 30 basis points from Q3 2023, driven by reduced promotional activity.
Operating Income $85.4 million or 13.7% of revenue, up from $83.4 million or 15.1% of revenue in Q3 2023.
Effective Tax Rate 23.8%, compared to 22.8% in Q3 2023.
Net Income $64.8 million or $0.91 per diluted share, compared to $65.1 million or $0.88 per diluted share in Q3 2023.
Cash and Cash Equivalents $150.5 million as of September 30, 2024.
Inventory $268.7 million, compared to $205.7 million in the prior year, primarily due to increased transit times.
CapEx $2.4 million in Q3 2024.
Stock Repurchases $20.2 million in Q3 2024, bringing year-to-date total to $95.8 million.
Quarterly Cash Dividend $0.21 per share, payable on December 27, 2024.
New Product Launches: The launch of Madden Girl apparel at Kohl's for the back-to-school season was very successful with sell-through performance that outpaced the overall department.
Handbag Revenue Growth: Steve Madden handbag business revenue increased 27% in the quarter on top of 52% growth in the same period in the prior year.
Apparel Revenue Growth: Steve Madden apparel revenue is on pace to grow more than 20% in 2024.
International Revenue Growth: International revenue grew 11% in the third quarter compared to the same period in the prior year.
EMEA Region Growth: EMEA revenue is expected to be up more than 20% in 2024.
Joint Venture Expansion: Expect to end the year with 33 stores in the Middle East, up from 27 at the start of the year.
Direct-to-Consumer Revenue Growth: DTC revenue grew 8% in the third quarter, including a 5% increase on a comp basis.
E-commerce Growth: E-commerce business grew revenue by 10% in the quarter.
Inventory Increase: Inventory at the end of the quarter was $268.7 million compared to $205.7 million in the prior year.
Corporate Social Responsibility: Published the 2023 Sustainability Report outlining progress on sustainability goals.
Guidance Update: Raising guidance for 2024 revenue and earnings based on strong third quarter results.
Competitive Pressures: The company is facing challenges in the wholesale branded business as many customers are pushing back deliveries and taking a cautious approach to orders.
Supply Chain Challenges: Increased transit times have resulted in higher inventory levels, with an average increase of approximately 10 days compared to last year for transporting goods from their countries of origin to warehouses.
Economic Factors: The retail market remains challenging, particularly in Europe, where the company is outperforming competition but still navigating a difficult environment.
Regulatory Issues: No specific regulatory issues were mentioned, but the company acknowledges risks associated with forward-looking statements and potential changes in regulations.
Key Business Drivers: 1. Expanding international markets: International revenue grew 11% in Q3, with EMEA expected to be up more than 20% in 2024. 2. Growing business outside footwear: Accessories and apparel revenue rose 48%, with handbags increasing 27%. 3. Expanding direct-to-consumer business: DTC revenue grew 8%, with e-commerce up 10%. 4. Strengthening U.S. wholesale footwear business: Revenue declined 4% due to cautious order approaches.
Sustainability Initiatives: Published 2023 Sustainability Report outlining progress on corporate social responsibility objectives.
Revenue Guidance: Expecting 2024 revenue to increase by 13% to 14% compared to 2023.
Earnings Per Share Guidance: Expecting diluted EPS to be in the range of $2.62 to $2.67 for 2024.
CapEx: CapEx in Q3 was $2.4 million.
Cash Dividend: Quarterly cash dividend of $0.21 per share approved, payable on December 27, 2024.
Quarterly Cash Dividend: The company's Board of Directors approved a quarterly cash dividend of $0.21 per share, payable on December 27, 2024, to stockholders of record as of the close of business on December 13, 2024.
Share Repurchase Program: During the third quarter, the company spent $20.2 million on repurchases of its common stock, bringing the year-to-date total to $95.8 million.
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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