Steven Madden — Nov 7, 2024 release
Fiscal 2024 third-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001493152-24-043910
Showing in the filing
Adjusted diluted net income per share
“$2.62” – “$2.67”
Period
FY2024
Measure
Company-defined measure
Source
Guidance table
All guidance in this release · 8
Quarterly cash dividend
“$0.21 per share”
Quarterly cash dividend payment
“payable on December 27, 2024 to stockholders of record as of the close of business on December 13, 2024”
Revenue for FY2024
“will increase 13% to 14% compared to 2023”
Revenue increase vs. 2023 for FY2024
“increase 13% to 14%”
Diluted EPS for FY2024
“will be in the range of $2.36 to $2.41”
Adjusted diluted EPS for FY2024
“will be in the range of $2.62 to $2.67”
GAAP diluted net income per share for FY2024
“$2.36” – “$2.41”
Adjusted diluted net income per share for FY2024
“$2.62” – “$2.67”
Exhibit 99.1 · full document
99.1
Steve
Madden Announces Third Quarter 2024 Results
LONG
ISLAND CITY, N.Y., November 7, 2024 – Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear,
accessories and apparel, today announced financial results for the third quarter ended September 30, 2024.
Amounts
referred to as “Adjusted” are non-GAAP measures that exclude the items defined as “Non-GAAP Adjustments” in the
“Non-GAAP Reconciliation” section.
Third
Quarter 2024 Results
● Revenue
increased 13.0% to $624.7 million, compared to $552.7 million in the same period of 2023.
● Gross
profit as a percentage of revenue was 41.5%, compared to 42.1% in the same period of 2023.
Adjusted gross profit as a percentage of revenue was 41.6% in the third quarter of 2024.
● Operating
expenses as a percentage of revenue were 28.6%, compared to 27.1% in the same period of 2023.
Adjusted operating expenses as a percentage of revenue were 27.9%, compared to 27.0% in the
same period of 2023.
● Income
from operations totaled $74.6 million, or 11.9% of revenue, compared to $82.7 million, or
15.0% of revenue, in the same period of 2023. Adjusted income from operations totaled $85.4
million, or 13.7% of revenue, compared to $83.4 million, or 15.1% of revenue, in the same
period of 2023.
● Net
income attributable to Steven Madden, Ltd. was $55.3 million, or $0.77 per diluted share,
compared to $64.4 million, or $0.87 per diluted share, in the same period of 2023. Adjusted
net income attributable to Steven Madden, Ltd. was $64.8 million, or $0.91 per diluted share,
compared to $65.1 million, or $0.88 per diluted share, in the same period of 2023.
Edward
Rosenfeld, Chairman and Chief Executive Officer, commented, “We delivered strong results in the third quarter, with revenue and
Adjusted earnings exceeding expectations. This performance was driven by outstanding growth in the accessories and apparel categories
– including another quarter of exceptional performance in Steve Madden handbags and a strong contribution from newly acquired Almost
Famous – and robust top line gains in international markets and direct-to-consumer channels, demonstrating our team’s strong
execution of our key strategic initiatives. Based on these results, we are raising our guidance for 2024 revenue and Adjusted earnings.”
Third
Quarter 2024 Channel Results
Revenue
for the wholesale business was $495.7 million, a 14.4% increase compared to the third quarter of 2023. Excluding the newly acquired Almost
Famous, wholesale revenue increased 4.8%. Wholesale footwear revenue decreased 2.2%. Wholesale accessories/apparel revenue increased
54.2%, or 21.6% excluding Almost Famous. Gross profit as a percentage of wholesale revenue was 35.5%, compared to 35.9% in the third
quarter of 2023, driven by the impact of Almost Famous.
Direct-to-consumer
revenue was $125.5 million, a 7.8% increase compared to the third quarter of 2023. Gross profit as a percentage of direct-to-consumer
revenue increased to 64.0%, compared to 63.7% in the third quarter of 2023, driven by reduced promotional activity.
The
Company ended the quarter with 282 brick-and-mortar retail stores and five e-commerce websites, as well as 67 company-operated concessions
in international markets.
Balance
Sheet and Cash Flow Highlights
As
of September 30, 2024, cash, cash equivalents and short-term investments totaled $150.5 million. Inventory totaled $268.7 million, compared
to $205.7 million at the end of the third quarter of 2023.
During
the third quarter of 2024, the Company spent $20.2 million on repurchases of its common stock, which includes shares acquired through
the net settlement of employees’ stock awards.
Quarterly
Cash Dividend
The
Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on December 27, 2024
to stockholders of record as of the close of business on December 13, 2024.
Updated
2024 Outlook
For
fiscal 2024, the Company now expects revenue will increase 13% to 14% compared to 2023. The Company now expects diluted EPS will be in
the range of $2.36 to $2.41. The Company now expects Adjusted diluted EPS will be in the range of $2.62 to $2.67.
Conference
Call Information
Interested
stockholders are invited to listen to the conference call scheduled for today, November 7, 2024, at 8:30 a.m. Eastern Time, which will
include a discussion of the Company’s third quarter 2024 earnings results and 2024 outlook. The call will be webcast live on the
Company’s website at https://investor.stevemadden.com . A webcast replay of the conference call will be available on the
Company’s website or via the following webcast link https://edge.media-server.com/mmc/p/ktw3zrco beginning today at approximately
10:00 a.m. Eastern Time.
About
Steve Madden
Steve
Madden designs, sources and markets fashion-forward footwear, accessories and apparel. In addition to marketing products under its own
brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, and Blondo®, Steve Madden licenses footwear, handbags and
other accessory categories for the Anne Klein® brand. Steve Madden also designs and sources products under private label brand names
for various retailers. Steve Madden’s wholesale distribution includes department stores, mass merchants, off-price retailers, shoe
chains, online retailers, national chains, specialty retailers and independent stores. Steve Madden also directly operates brick-and-mortar
retail stores and e-commerce websites. In addition, Steve Madden licenses certain of its brands to third parties for the marketing and
sale of certain products in the apparel, accessory and home categories. For local store information and the latest boots, booties, fashion
sneakers, dress shoes, sandals, and more, please visit www.stevemadden.com , www.dolcevita.com and our other branded websites.
Safe
Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995
This
press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue
and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words
such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”,
“project”, “predict”, “plan”, “intend”, “estimate”, or “confident”
and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances
of future performance. Instead, they represent the Company’s current beliefs, expectations, and assumptions regarding anticipated
events and trends affecting its business and industry based on information available as of the time such statements are made. Investors
are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted
with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition
may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important
risk factors include:
● geopolitical
tensions in the regions in which we operate and any related challenging macroeconomic conditions
globally that may materially adversely affect our customers, vendors, and partners, and the
duration and extent to which these factors may impact our future business and operations,
results of operations and financial condition;
● the
Company’s ability to navigate shifting macro-economic environments, including but not
limited to inflation and the potential for recessionary conditions;
● the
Company’s ability to accurately anticipate fashion trends and promptly respond to consumer
demand;
● the
Company’s ability to compete effectively in a highly competitive market;
● the
Company’s ability to adapt its business model to rapid changes in the retail industry;
● supply
chain disruptions to product delivery systems and logistics, and the Company’s ability
to properly manage inventory;
● the
Company’s reliance on independent manufacturers to produce and deliver products in
a timely manner, especially when faced with adversities such as work stoppages, transportation
delays, public health emergencies, social unrest, changes in local economic conditions, and
political upheavals as well as their ability to meet the Company’s quality standards;
● the
Company’s dependence on the hiring and retention of key personnel;
● the
Company’s ability to successfully implement growth strategies and integrate acquired
businesses;
● changes
in trade policies and tariffs imposed by the United States government and the governments
of other nations in which the Company manufactures and sells products;
● the
Company’s ability to adequately protect its trademarks and other intellectual property
rights;
● the
Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen
events such as an epidemic or a pandemic, which may cause disruption to the Company’s
business operations for an indeterminable period of time;
● legal,
regulatory, political and economic risks that may affect the Company’s sales in international
markets;
● changes
in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial
results;
● additional
tax liabilities resulting from audits by various taxing authorities;
● cybersecurity
risks and costs of defending against, mitigating, and responding to data security threats
and breaches impacting the Company;
● the
Company’s ability to achieve operating results that are consistent with prior financial
guidance; and
● other
risks and uncertainties indicated from time to time in the Company’s filings with the
Securities and Exchange Commission.
The
Company does not undertake, and disclaims, any obligation to publicly update any forward-looking statement, including, without limitation,
any guidance regarding revenue or earnings, whether as a result of new information, future developments, or otherwise.
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In
thousands, except per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Net sales
$ 621,170
$ 549,846
$ 1,693,446
$ 1,454,420
Licensing fee income
3,505
2,886
7,163
7,448
Total revenue
624,675
552,732
1,700,609
1,461,868
Cost of sales
365,131
320,107
999,121
844,281
Gross profit
259,544
232,625
701,488
617,587
Operating expenses
178,915
149,887
507,343
444,298
Change in valuation of contingent payment liability
(2,584 )
—
5,616
—
Impairment of intangibles
8,635
—
10,335
—
Income from operations
74,578
82,738
178,194
173,289
Interest and other income, net
1,400
1,922
4,309
5,898
Income before provision for income taxes
75,978
84,660
182,503
179,187
Provision for income taxes
19,390
19,552
44,404
42,219
Net income
56,588
65,108
138,099
136,968
Less: net income attributable to noncontrolling interest
1,310
695
3,510
1,295
Net income attributable to Steven Madden, Ltd.
$ 55,278
$ 64,413
$ 134,589
$ 135,673
Basic income per share
$ 0.78
$ 0.88
$ 1.88
$ 1.84
Diluted income per share
$ 0.77
$ 0.87
$ 1.87
$ 1.81
Basic weighted average common shares outstanding
70,806
72,943
71,516
73,679
Diluted weighted average common shares outstanding
71,569
74,071
72,135
74,917
Cash dividends declared per common share
$ 0.21
$ 0.21
$ 0.63
$ 0.63
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
As of
September 30, 2024
December 31, 2023
September 30, 2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$ 139,414
$ 204,640
$ 191,804
Short-term investments
11,064
15,173
14,641
Accounts receivable, net of allowances
56,297
40,246
58,538
Factor accounts receivable
426,408
320,723
342,871
Inventories
268,669
228,990
205,693
Prepaid expenses and other current assets
28,041
29,009
24,334
Income tax receivable and prepaid income taxes
14,950
16,051
15,702
Total current assets
944,843
854,832
853,583
Note receivable - related party
—
—
100
Property and equipment, net
52,906
47,199
44,920
Operating lease right-of-use asset
148,391
122,783
113,058
Deposits and other
20,166
16,250
10,567
Deferred tax assets
609
609
1,570
Goodwill
181,905
180,003
168,612
Intangibles, net
108,308
126,267
99,817
Total Assets
$ 1,457,128
$ 1,347,943
$ 1,292,227
LIABILITIES
Current liabilities:
Accounts payable
$ 225,586
$ 161,140
$ 140,623
Accrued expenses
150,067
154,751
129,754
Operating leases - current portion
43,812
40,342
36,521
Income taxes payable
12,435
5,998
13,519
Contingent payment liability - current portion
7,716
3,325
1,153
Accrued incentive compensation
13,347
12,068
10,190
Total current liabilities
452,963
377,624
331,760
Contingent payment liability - long-term portion
11,200
9,975
—
Operating leases - long-term portion
118,674
98,536
91,916
Deferred tax liabilities
8,777
8,606
3,923
Other liabilities
5,448
5,170
10,914
Total Liabilities
597,062
499,911
438,513
STOCKHOLDERS’ EQUITY
Total Steven Madden, Ltd. stockholders’ equity
833,923
829,598
837,038
Noncontrolling interest
26,143
18,434
16,676
Total stockholders’ equity
860,066
848,032
853,714
Total Liabilities and Stockholders’ Equity
$ 1,457,128
$ 1,347,943
$ 1,292,227
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
Nine Months Ended
September 30, 2024
September 30, 2023
Cash flows from operating activities:
Net income
$ 138,099
$ 136,968
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation
19,531
18,169
Depreciation and amortization
14,736
11,138
Loss on disposal of fixed assets
112
204
Impairment of intangibles
10,335
—
Loss on divestiture of business
3,199
—
Impairment of lease right-of-use asset
—
95
Accrued interest on note receivable - related party
—
(6 )
Notes receivable - related party
—
307
Change in valuation of contingent payment liability
5,616
—
Other operating activities
(48 )
417
Changes, net of acquisitions, in:
Accounts receivable
(15,794 )
(20,601 )
Factor accounts receivable
(108,276 )
(93,274 )
Inventories
(39,064 )
23,541
Prepaid expenses, income tax receivables, prepaid taxes, and other assets
(864 )
(264 )
Accounts payable and accrued expenses
66,853
4,991
Accrued incentive compensation
1,382
(1,598 )
Leases and other liabilities
(1,572 )
(2,331 )
Net cash provided by operating activities
94,245
77,756
Cash flows from investing activities:
Capital expenditures
(16,642 )
(13,899 )
Purchases of short-term investments
(12,840 )
(15,979 )
Maturity/sale of short-term investments
16,654
16,335
Acquisition of business
(4,259 )
—
Other investing activities
372
—
Net cash used in investing activities
(16,715 )
(13,543 )
Cash flows from financing activities:
Common stock repurchased and net settlements of stock awards
(95,788 )
(104,215 )
Proceeds from exercise of stock options
1,086
1,171
Investment of noncontrolling interest
—
4,582
Cash dividends paid on common stock
(45,880 )
(47,594 )
Distribution of noncontrolling interest
—
(1,102 )
Net cash used in financing activities
(140,582 )
(147,158 )
Effect of exchange rate changes on cash and cash equivalents
(2,174 )
36
Net decrease in cash and cash equivalents
(65,226 )
(82,909 )
Cash and cash equivalents – beginning of period
204,640
274,713
Cash and cash equivalents – end of period
$ 139,414
$ 191,804
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
NON-GAAP
RECONCILIATION
(In
thousands, except per share amounts)
(Unaudited)
The
Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company
conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s
performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP
financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance
with GAAP.
Table
1 - Reconciliation of GAAP gross profit to Adjusted gross profit
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP gross profit
$ 259,544
$ 232,625
$ 701,488
$ 617,587
Non-GAAP Adjustments
59
—
393
—
Adjusted gross profit
$ 259,603
$ 232,625
$ 701,881
$ 617,587
Table
2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP operating expenses
$ 178,915
$ 149,887
$ 507,343
$ 444,298
Non-GAAP Adjustments
(4,680 )
(622 )
(6,301 )
(2,298 )
Adjusted operating expenses
$ 174,235
$ 149,265
$ 501,042
$ 442,000
Table 3 - Reconciliation of GAAP income from operations to Adjusted income from operations
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP income from operations
$ 74,578
$ 82,738
$ 178,194
$ 173,289
Non-GAAP Adjustments
10,790
622
22,645
2,298
Adjusted income from operations
$ 85,368
$ 83,360
$ 200,839
$ 175,587
Table 4 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP provision for income taxes
$ 19,390
$ 19,552
$ 44,404
$ 42,219
Non-GAAP Adjustments
1,238
(85 )
4,032
309
Adjusted provision for income taxes
$ 20,628
$ 19,467
$ 48,436
$ 42,528
Table 5 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP net income attributable to noncontrolling interest
$ 1,310
$ 695
$ 3,510
$ 1,295
Non-GAAP Adjustments
25
—
155
—
Adjusted net income attributable to noncontrolling interest
$ 1,335
$ 695
$ 3,665
$ 1,295
Table 6 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
GAAP net income attributable to Steven Madden, Ltd.
$ 55,278
$ 64,413
$ 134,589
$ 135,673
Non-GAAP Adjustments
9,527
707
18,459
1,989
Adjusted net income attributable to Steven Madden, Ltd.
$ 64,805
$ 65,120
$ 153,048
$ 137,662
GAAP diluted net income per share
$ 0.77
$ 0.87
$ 1.87
$ 1.81
Adjusted diluted net income per share
$ 0.91
$ 0.88
$ 2.12
$ 1.84
Table 7 - Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in 2024 outlook
Updated 2024 Outlook
Low End
High End
GAAP diluted net income per share
$ 2.36
$ 2.41
Non-GAAP Adjustments
0.26
0.26
Adjusted diluted net income per share
$ 2.62
$ 2.67
Non-GAAP
Adjustments include the items below.
For
the third quarter of 2024:
● $3.2
million pre-tax ($3.7 million after-tax) expense in connection with a divestiture of a business,
included in operating expenses.
● $1.5
million pre-tax ($1.1 million after-tax) expense in connection with an acquisition and formation
of joint ventures, included in operating expenses.
● $8.6
million pre-tax ($6.6 million after-tax) expense in connection with a trademark impairment.
● $2.6
million pre-tax ($2.0 million after-tax) benefit in connection with the change in valuation
of a contingent consideration in connection with the acquisition of Almost Famous.
For
the third quarter of 2023:
● $2.7
million pre-tax ($2.3 million after-tax) expense in connection with the write-off of an investment
in a subsidiary in Asia, included in operating expenses.
● $2.2
million pre-tax ($1.6 million after-tax) benefit in connection with the dissolution of an
entity in Asia, included in operating expenses.
Contact
Steven
Madden, Ltd.
VP
of Corporate Development & Investor Relations
Danielle
McCoy
718-308-2611
InvestorRelations@stevemadden.com
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.