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01/11 11:04
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Consolidated Revenue $559 million, a 6.8% increase compared to Q2 2024. Excluding the newly acquired Kurt Geiger, consolidated revenue decreased 10%. The increase was driven by the acquisition of Kurt Geiger, while the decline excluding Kurt Geiger was due to order cancellations, lost orders from delivery delays, and other tariff-related disruptions.
Wholesale Revenue $360.6 million, down 6.4% compared to Q2 2024. Excluding Kurt Geiger, wholesale revenue decreased 12.8%. The decline was attributed to order cancellations, lost orders due to delivery delays or pricing, and shipments moved to the following quarter.
Wholesale Footwear Revenue $220.1 million, a 7.1% decrease from Q2 2024 or down 11.7% excluding Kurt Geiger. The decline was due to order cancellations and delivery delays caused by tariffs.
Wholesale Accessories and Apparel Revenue $140.4 million, down 5.3% compared to Q2 2024 or down 14.6% excluding Kurt Geiger. The decline was attributed to order cancellations, delivery delays, and other tariff-related disruptions.
Direct-to-Consumer (DTC) Revenue $195.5 million, a 43.3% increase compared to Q2 2024. Excluding Kurt Geiger, DTC revenue decreased 3%. The increase was driven by the acquisition of Kurt Geiger, while the decline excluding Kurt Geiger was due to canceled and delayed deliveries and a systems migration.
Licensing Royalty Income $2.9 million, compared to $1.8 million in Q2 2024. The increase was not attributed to specific reasons in the transcript.
Consolidated Gross Margin 41.9% in Q2 2025 compared to 41.5% in Q2 2024. The impact of tariffs, net of supplier discounts, resulted in 230 basis points of pressure, offset by a greater mix of higher-margin DTC business due to the acquisition of Kurt Geiger.
Wholesale Gross Margin 31% compared to 33.1% in Q2 2024. The decline was primarily due to pressure from tariffs.
Direct-to-Consumer Gross Margin 61.3% compared to 64.3% in Q2 2024. The decline was due to the addition of Kurt Geiger, which had lower DTC margins, and pressure from tariffs.
Operating Expenses $211.6 million or 37.9% of revenue in Q2 2025 compared to $162.8 million or 31.1% of revenue in Q2 2024. The increase was not attributed to specific reasons in the transcript.
Operating Income $22.6 million or 4% of revenue in Q2 2025 compared to $54.5 million or 10.4% of revenue in Q2 2024. The decline was due to the impact of tariffs and increased operating expenses.
Net Income $13.9 million or $0.20 per diluted share in Q2 2025 compared to $41.2 million or $0.57 per diluted share in Q2 2024. The decline was due to the impact of tariffs and increased operating expenses.
Inventory $437 million compared to $241.6 million in Q2 2024. Excluding Kurt Geiger, inventory increased 1%. The increase was not attributed to specific reasons in the transcript.
New fashion offerings: Positive consumer response to new fashion offerings, particularly in the dress shoe and boot categories across both DTC and wholesale channels.
Kurt Geiger acquisition: Integration of Kurt Geiger is progressing smoothly, with strong momentum in the Kurt Geiger London brand.
International market expansion: Expanding Kurt Geiger in international markets through the Steve Madden network and growing Steve Madden in the U.K. through the Kurt Geiger platform.
Sourcing diversification: Reduced reliance on China for U.S. imports from 71% in 2024 to an expected 30% for fall 2025.
Tariff impact mitigation: Implemented supplier discounts, price increases, and shifted production to manage tariff-related disruptions.
Marketing strategy: Rebalancing marketing spend across the funnel, increasing investment in YouTube, Pinterest, and Snapchat to target Gen Z and millennials.
Revenue synergies: Focus on revenue synergies from Kurt Geiger acquisition, including cost savings in freight and logistics.
Tariffs on goods imported into the United States: The company faced significant challenges due to new tariffs, leading to increased landed costs, reduced gross margins, order cancellations, shipment delays, and lost sales. This has caused substantial pressure on both revenue and earnings.
Sourcing and supply chain disruptions: Efforts to diversify sourcing out of China were impacted by the need to temporarily revert some production back to China to ensure on-time delivery, product quality, and reasonable pricing. This has created operational challenges and risks.
Wholesale customer behavior: Wholesale customers canceled orders and reduced open-to-buys, further impacting revenue and operational stability.
Direct-to-consumer (DTC) segment challenges: The DTC segment faced revenue declines due to canceled and delayed deliveries caused by tariff-related disruptions and a systems migration completed during the quarter.
Integration of Kurt Geiger acquisition: While the integration of Kurt Geiger is progressing, there are inherent risks in achieving revenue synergies, cost savings, and operational alignment, which could impact financial performance if not managed effectively.
Economic uncertainties and demand elasticity: The company is monitoring consumer acceptance of price increases and demand elasticity, which could impact sales if consumers react negatively to higher prices.
Sourcing Diversification: For fall 2025, the company expects to source approximately 30% of U.S. imports from China, down from 71% for the full year 2024, due to tariff impacts and efforts to diversify sourcing.
Pricing Strategy: The company is selectively raising prices for wholesale customers and consumers, monitoring demand elasticity, and has observed positive consumer acceptance, particularly for new fashion items.
Marketing and Brand Strategy: The company is increasing investment in top and mid-funnel marketing tactics, diversifying spend across channels like YouTube, Pinterest, and Snapchat, and focusing on Gen Z and millennial consumers to drive brand awareness and consideration.
Kurt Geiger Acquisition: The integration of Kurt Geiger is expected to drive long-term growth through international market expansion, cost savings in logistics, and leveraging the Steve Madden network for revenue synergies.
Direct-to-Consumer Segment: The company anticipates continued growth in the direct-to-consumer segment, supported by the integration of Kurt Geiger and a shift towards higher-margin business.
Quarterly Cash Dividend: The company's Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend will be payable on September 23, 2025, to stockholders of record as of the close of business on September 12, 2025.
Share Repurchase: During the second quarter, the company did not repurchase any shares of its common stock in the open market.
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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