Steve Madden (Nasdaq:SHOO), a leading designer and marketer of
fashion footwear and accessories for women, men and children, today
announced financial results for the third quarter ended September
30, 2014.
For the Third Quarter 2014:
- Net sales were $392.0 million compared
to $394.8 million in the same period of 2013.
- Gross margin was 34.7% as compared to
35.4% in the same period last year.
- Operating expenses as a percentage of
sales were 20.9% compared to 19.4% of sales in the same period of
2013.
- Operating income totaled $59.3 million,
or 15.1% of net sales, compared with operating income of $68.1
million, or 17.2% of net sales, in the same period of 2013.
- Net income was $39.2 million, or $0.62
per diluted share, compared to $44.0 million, or $0.66 per diluted
share in the prior year's third quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, “As previously reported, business during the third
quarter was softer than we anticipated, particularly in our retail
segment, as we continue to be impacted by a lack of significant
fashion footwear trends on which to capitalize. While near-term
business trends are challenging, we are excited about the steps we
took in the quarter to position the Company for long-term growth.
In August, we added a powerful contemporary footwear brand to our
portfolio with the acquisition of Dolce Vita, and in September, we
signed a definitive agreement to acquire our Mexican licensee, an
important move in our continued international expansion.”
Third Quarter 2014 Segment Results
Net sales from the wholesale business were $343.3 million in the
third quarter compared to $345.9 million in the third quarter of
2013. Excluding the results of Dolce Vita, wholesale net sales
decreased 4.9% compared to the prior year period. Gross margin in
the wholesale business decreased to 31.3% compared to 31.9% in last
year’s third quarter, due to the impact from Dolce Vita as well as
increased markdown allowances.
Retail net sales were $48.7 million compared to $48.9 million in
the third quarter of the prior year. The decrease in net sales was
due to a same store sales decrease of 7.4%, offset by an increase
in net sales resulting from the net opening of 11 new stores since
the end of the third quarter last year. Increased promotional
activity resulted in retail gross margin of 58.9% in the third
quarter of 2014 compared to 60.2% in the third quarter of 2013.
During the third quarter, the Company opened four outlet stores
and acquired the Dolce Vita Internet store. The Company also
acquired, through a 50.1% interest in its South African joint
venture, four Steve Madden stores in South Africa. Including the
stores in South Africa, the Company ended the quarter with 133
company-operated retail locations, including 28 outlets and four
Internet stores.
The effective tax rate for the quarter of 35.0% compares to
36.5% in the third quarter of the prior year.
Balance Sheet and Cash Flow
During the quarter, the Company repurchased approximately 1.1
million shares of the Company’s common stock for $36.1 million.
As of September 30, 2014, cash, cash equivalents, and current
and non-current marketable securities totaled $189.5 million.
Company Outlook
As previously announced, factoring in the recent acquisition of
Dolce Vita and current expectations for the remainder of the year,
for fiscal year 2014, the Company expects that net sales will
increase 1% to 2% over net sales in 2013. Diluted EPS for fiscal
year 2014 is expected to be in the range of $1.81 to $1.86.
Conference Call Information
As previously announced, interested stockholders are invited to
listen to the third quarter earnings conference call scheduled for
today, Thursday, October 30, 2014, at 8:30 a.m. Eastern Time. The
call will be broadcast live over the Internet and can be accessed
by logging onto http://www.stevemadden.com. An online archive of
the broadcast will be available within one hour of the conclusion
of the call and will be accessible for a period of 30 days
following the call. Additionally, a replay of the call can be
accessed by dialing 1-877-870-5176 (U.S.) and 1-858-384-5517
(international), passcode 1215219, and will be available until
November 30, 2014.
About Steve Madden
Steve Madden designs, sources and markets fashion-forward
footwear and accessories for women, men and children. In addition
to marketing products under its owned brands including Steve
Madden®, Steven by Steve Madden®, Madden Girl®, Freebird by
Steven®, Stevies®, Betsey Johnson®, Dolce Vita®, DV by Dolce Vita®,
Brian Atwood®, B Brian Atwood®, Report Signature®, Report®, Big
Buddha®, Wild Pair®, Cejon® and Mad Love®, the Company is the
licensee of various brands, including Olsenboye® for footwear,
handbags and belts and Superga® and l.e.i.® for footwear. The
Company also designs and sources products under private label brand
names for various retailers. The Company's wholesale distribution
includes department stores, specialty stores, luxury retailers,
national chains and mass merchants. The Company also operates 133
retail stores (including the Company's four Internet stores). The
Company licenses certain of its brands to third parties for the
marketing and sale of certain products, including for
ready-to-wear, outerwear, intimate apparel, eyewear, hosiery,
jewelry, fragrance, luggage and bedding and bath products.
Safe Harbor
This press release and oral statements made from time to time by
representatives of the Company contain certain “forward looking
statements” as that term is defined in the federal securities laws.
The events described in forward looking statements may not occur.
Generally these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of the
Company's plans or strategies, projected or anticipated benefits
from acquisitions to be made by the Company, or projections
involving anticipated revenues, earnings or other aspects of the
Company's operating results. The words "may," "will," "expect,"
"believe," "anticipate," "project," "plan," "intend," "estimate,"
and "continue," and their opposites and similar expressions are
intended to identify forward looking statements. The Company
cautions you that these statements concern current expectations
about the Company’s future results and condition and are not
guarantees of future performance or events and are subject to a
number of uncertainties, risks and other influences, many of which
are beyond the Company's control, that may influence the accuracy
of the statements and the projections upon which the statements are
based. Factors which may affect the Company's results include, but
are not limited to, the risks and uncertainties discussed in the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K filed with the Securities and
Exchange Commission. Any one or more of these uncertainties, risks
and other influences could materially affect the Company's results
of operations and financial condition and whether forward looking
statements made by the Company ultimately prove to be accurate and,
as such, the Company's actual results, performance and achievements
could differ materially from those expressed or implied in these
forward looking statements. The Company undertakes no obligation to
publicly update or revise any forward looking statements, whether
as a result of new information, future events or otherwise.
STEVEN MADDEN, LTD. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
2014 September 30, 2013
September 30, 2014 September 30,
2013 Net sales $ 391,992 $ 394,791 $ 992,331 $
971,341 Cost of sales 255,895 255,088 640,826
618,463 Gross profit 136,097 139,703 351,505 352,878
Commission and licensing fee income, net 5,103 4,937 11,461 13,002
Operating expenses 81,867 76,543 227,328
215,734 Income from operations 59,333 68,097 135,638 150,146
Interest and other income, net 1,132 1,308
3,218 3,213 Income before provision for income taxes 60,465
69,405 138,856 153,359 Provision for income taxes 21,163
25,323 47,385 56,242 Net income 39,302 44,082
91,471 97,117 Net income (loss) attributable to noncontrolling
interest 54 90 584 769 Net income
attributable to Steven Madden, Ltd. $ 39,248 $ 43,992 $ 90,887 $
96,348 Basic income per share $ 0.64 $ 0.68 $ 1.47 $
1.48 Diluted income per share $ 0.62 $ 0.66 $ 1.42 $ 1.44
Basic weighted average common shares outstanding 61,019 64,450
61,936 64,926 Diluted weighted average common shares outstanding
63,215 66,860 64,184 67,062
STEVEN MADDEN, LTD. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(In thousands)
As of
September 30, 2014
December 31, 2013 September 30,
2013 (Unaudited) (Unaudited) Cash and cash equivalents $
169,911 $ 180,275 $ 122,426 Marketable securities (current &
non current) 19,562 111,858 112,279 Accounts receivables, net
260,433 185,423 249,706 Inventories 103,151 73,696 99,668 Other
current assets 31,051 36,660 31,981 Property and equipment, net
63,092 56,606 54,197 Goodwill and intangibles, net 274,848 225,695
228,337 Other assets 12,484 10,028 8,547 Total
assets $ 934,532 $ 880,241 $ 907,141 Accounts payable $
118,817 $ 99,126 $ 127,800 Contingent payment liability (current
& non current) 29,558 34,795 39,699 Other current liabilities
73,724 44,682 55,056 Other long term liabilities 26,754 22,798
12,031 Total Steven Madden, Ltd. stockholders' equity 685,390
678,517 672,434 Noncontrolling interest 289 323
121 Total liabilities and stockholders' equity $ 934,532 $
880,241 $ 907,141
STEVEN MADDEN, LTD. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOW DATA
(In thousands)
(Unaudited)
Nine Months Ended
September 30, 2014
September 30, 2013 Net cash provided by
operating activities $ 75,699 $ 58,089
Investing
Activities
Purchases of property and equipment (12,605 ) (16,366 ) Purchases /
sales of marketable securities, net 94,873 (20,402 ) Acquisition,
net of cash acquired
(62,676 )
- Net cash provided by/(used in)
investing activities 19,592 (36,768 )
Financing
Activities
Common stock share repurchases for treasury (101,751 ) (69,465 )
Payment of contingent liability (8,475 ) (7,420 ) Proceeds from
exercise of stock options 2,940 4,935 Tax benefit from the exercise
of stock options 1,631 4,278 Net cash
used by financing activities (105,655 ) (67,672 ) Net
decrease in cash and cash equivalents (10,364 ) (46,351 )
Cash and cash equivalents - beginning of period 180,275 168,777
Cash and cash equivalents - end of period $ 169,911
$ 122,426
ICR, Inc.Investor RelationsJean Fontana/Megan
Crudele203-682-8200www.icrinc.com
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