Company Announcements

Steve Madden Announces Fourth Quarter and Full Year 2023 Results

Source: GlobeNewswire
Steve Madden Announces Fourth Quarter and Full Year 2023 Results

LONG ISLAND CITY, N.Y., Feb. 28, 2024 (GLOBE NEWSWIRE) -- Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel, today announced financial results for the fourth quarter and full year ended December 31, 2023 and provided its 2024 outlook.

Amounts referred to as “Adjusted” are non-GAAP measures that exclude the items defined as “Non-GAAP Adjustments” in the “Non-GAAP Reconciliation” section.

Fourth Quarter 2023 Results

  • Revenue increased 10.4% to $519.7 million compared to $470.6 million in the same period of 2022.
  • Gross profit as a percentage of revenue was 41.3% compared to 42.2% in the same period of 2022. Adjusted gross profit as a percentage of revenue was 41.7% in the fourth quarter of 2023.
  • Operating expenses as a percentage of revenue were 32.4% compared to 33.8% in the same period of 2022. Adjusted operating expenses as a percentage of revenue were 31.5% compared to 33.2% in the same period of 2022.
  • Income from operations totaled $39.9 million, or 7.7% of revenue, compared to $39.8 million, or 8.4% of revenue, in the same period of 2022. Adjusted income from operations totaled $53.0 million, or 10.2% of revenue, compared to $42.2 million, or 9.0% of revenue, in the same period of 2022.
  • Net income attributable to Steven Madden, Ltd. was $35.9 million, or $0.49 per diluted share, compared to $31.8 million, or $0.42 per diluted share, in the same period of 2022. Adjusted net income attributable to Steven Madden, Ltd. was $45.0 million, or $0.61 per diluted share, compared to $33.7 million, or $0.44 per diluted share, in the same period of 2022.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased to have delivered fourth quarter results that exceeded expectations on both the top and bottom lines.   We saw organic revenue growth in both the wholesale and direct-to-consumer channels, supplemented by the contribution from the newly acquired Almost Famous, and also drove strong improvement in Adjusted operating margin compared to the same period in the prior year.

“As we look ahead, while the operating environment remains choppy, we believe the on-trend product assortments created by Steve and his team have us well-positioned for 2024.   Looking out further, we are confident that the combination of our strong brands and proven business model will enable us to drive sustainable revenue and earnings growth for years to come.”

Fourth Quarter 2023 Channel Results

Revenue for the wholesale business was $354.8 million, a 14.9% increase compared to the fourth quarter of 2022. Wholesale footwear revenue decreased 0.4%, and wholesale accessories/apparel revenue increased 56.5%. Gross profit as a percentage of wholesale revenue increased to 31.7% compared to 30.5% in the fourth quarter of 2022 driven by increases in both the wholesale footwear and wholesale accessories/apparel businesses.

Direct-to-consumer revenue was $162.3 million, a 1.9% increase compared to the fourth quarter of 2022 driven by an increase in the brick-and-mortar business. Gross profit as a percentage of direct-to-consumer revenue was 62.7% compared to 64.0% in the fourth quarter of 2022 driven by an increase in promotional activity.

The Company ended the quarter with 255 Company-operated brick-and-mortar retail stores and five e-commerce websites, as well as 25 Company-operated concessions in international markets.

Full Year Ended December 31, 2023

For the full year ended December 31, 2023, revenue decreased 6.6% to $2.0 billion compared to $2.1 billion in 2022.

Net income attributable to Steven Madden, Ltd. was $171.6 million, or $2.30 per diluted share, for the year ended December 31, 2023 compared to net income of $216.1 million, or $2.77 per diluted share, for the year ended December 31, 2022. On an Adjusted basis, net income attributable to Steve Madden, Ltd. was $182.7 million, or $2.45 per diluted share, for the year ended December 31, 2023 compared to net income of $218.3 million, or $2.80 per diluted share, for the year ended December 31, 2022.

Balance Sheet and Cash Flow Highlights

As of December 31, 2023, cash, cash equivalents and short-term investments totaled $219.8 million. Inventory totaled $229.0 million as of the same date, approximately flat to the prior year.

During the fourth quarter and full year of 2023, the Company spent approximately $38 million and $142 million, respectively, 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 March 22, 2024 to stockholders of record as of the close of business on March 8, 2024.

2024 Outlook

For 2024, the Company expects revenue will increase 11% to 13% compared to 2023. The Company expects diluted EPS will be in the range of $2.55 to $2.65.

Conference Call Information

Interested stockholders are invited to listen to the conference call scheduled for today, February 28, 2024 at 8:30 a.m. Eastern Time, which will include a discussion of the Company's fourth quarter and fiscal year end 2023 earnings results and fiscal year 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/d488xfs5 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®, Blondo® and GREATS®, Steve Madden licenses footwear and handbag 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. Steve Madden also 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 retention and hiring 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 STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
 
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
 (Unaudited) (Unaudited) (Unaudited)  
Net sales$517,054  $468,152  $1,971,474  $2,111,296 
Commission and licensing fee income 2,660   2,491   10,108   10,713 
Total revenue 519,714   470,643   1,981,582   2,122,009 
Cost of sales 304,887   271,946   1,149,168   1,248,173 
Gross profit 214,827   198,697   832,414   873,836 
Operating expenses 168,374   158,940   612,672   592,192 
Impairment of intangibles 6,520      6,520    
Income from operations 39,933   39,757   213,222   281,644 
Interest and other income, net 1,494   570   7,392   676 
Income before provision for income taxes 41,427   40,327   220,614   282,320 
Provision for income taxes 4,420   8,375   46,639   65,103 
Net income 37,007   31,952   173,975   217,217 
Less: net income attributable to noncontrolling interest 1,126   161   2,421   1,156 
Net income attributable to Steven Madden, Ltd.$35,881  $31,791  $171,554  $216,061 
        
Basic income per share$0.50  $0.43  $2.34  $2.84 
        
Diluted income per share$0.49  $0.42  $2.30  $2.77 
        
Basic weighted average common shares outstanding 72,321   74,710   73,337   76,021 
        
Diluted weighted average common shares outstanding 73,491   76,575   74,565   78,069 
        
Cash dividends declared per common share$0.21  $0.21  $0.84  $0.84 
                


STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
 
 As of
 December 31, 2023 December 31, 2022
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$204,640  $274,713 
Short-term investments 15,173   15,085 
Accounts receivable, net of allowances 40,246   37,937 
Factor accounts receivable 320,723   248,228 
Inventories 228,990   228,752 
Prepaid expenses and other current assets 29,009   22,989 
Income tax receivable and prepaid income taxes 16,051   15,853 
Total current assets 854,832   843,557 
Note receivable - related party    401 
Property and equipment, net 47,199   40,664 
Operating lease right-of-use asset 122,783   90,264 
Deferred tax assets 609   1,755 
Deposits and other 16,250   12,070 
Goodwill 180,003   168,085 
Intangibles, net 126,267   101,192 
Total Assets$1,347,943  $1,257,988 
LIABILITIES   
Current liabilities:   
Accounts payable$161,140  $130,542 
Accrued expenses 154,751   138,523 
Operating leases - current portion 40,342   29,499 
Income taxes payable 5,998   9,403 
Contingent payment liability - current portion 3,325   1,153 
Accrued incentive compensation 12,068   11,788 
Total current liabilities 377,624   320,908 
Contingent payment liability - long-term portion 9,975    
Operating leases - long-term portion 98,536   79,128 
Deferred tax liabilities 8,606   3,923 
Other liabilities 5,170   10,166 
Total Liabilities 499,911   414,125 
STOCKHOLDERS’ EQUITY   
Total Steven Madden, Ltd. stockholders’ equity 829,598   831,553 
Noncontrolling interest 18,434   12,310 
Total stockholders’ equity 848,032   843,863 
Total Liabilities and Stockholders’ Equity$1,347,943  $1,257,988 
        


STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
 
 Twelve Months Ended
 December 31, 2023 December 31, 2022
 (Unaudited)  
Cash flows from operating activities:   
Net income$173,975  $217,217 
Adjustments to reconcile net income to net cash provided by operating activities   
Stock-based compensation 24,148   24,396 
Depreciation and amortization 15,501   20,576 
Loss on disposal of fixed assets 204   11 
Impairment of intangibles 6,520    
Deferred taxes 6,105   3,601 
Accrued interest on note receivable – related party (8)  (16)
Note receivable – related party 409   409 
Change in valuation of contingent liability    (5,807)
Other operating activities (23)  (2,716)
Changes, net of acquisitions, in:   
Accounts receivable (1,308)  (9,683)
Factor accounts receivable (18,647)  116,141 
Inventories 25,303   29,071 
Prepaid expenses, income tax receivables, prepaid taxes, and other assets (1,060)  (4,205)
Accounts payable and accrued expenses 7,052   (108,788)
Accrued incentive compensation 280   (3,083)
Leases and other liabilities (8,061)  (8,902)
Payment of contingent consideration (1,153)  (339)
Net cash provided by operating activities 229,237   267,883 
    
Cash flows from investing activities:   
Capital expenditures (19,470)  (16,351)
Purchases of short-term investments (25,688)  (45,130)
Maturity/sale of short-term investments 25,872   73,998 
Acquisition of Almost Famous (75,271)   
Purchase of a trademark    (2,000)
Other investing activities (5,335)  (5,000)
Net cash (used in)/provided by investing activities (99,892)  5,517 
    
Cash flows from financing activities:   
Proceeds from exercise of stock options 1,205   602 
Investment of noncontrolling interest 4,486   2,500 
Distributions to noncontrolling interest earnings (1,102)  (294)
Sale of minority interest of a subsidiary    1,017 
Common stock repurchased and net settlements of stock awards (142,348)  (148,878)
Cash dividends paid on common stock (63,177)  (66,005)
Payment of contingent consideration    (4,770)
Net cash used in financing activities (200,936)  (215,828)
Effect of exchange rate changes on cash and cash equivalents 1,518   (2,358)
Net (decrease)/increase in cash and cash equivalents (70,073)  55,214 
Cash and cash equivalents – beginning of year 274,713   219,499 
Cash and cash equivalents – end of year$204,640  $274,713 
        

 

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 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. The following reconciles the Company’s reported results and outlook in accordance with GAAP with the non-GAAP information that the Company also presents. Additional information regarding Non-GAAP Adjustments is presented below.

 
Table 1 - Reconciliation of GAAP gross profit to Adjusted gross profit
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP gross profit$214,827  $198,697  $832,414  $873,836 
Non-GAAP Adjustments 2,023      2,023    
Adjusted gross profit$216,850  $198,697  $834,437  $873,836 
                


Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP operating expenses$168,374  $158,940  $612,672  $592,192 
Non-GAAP Adjustments (4,485)  (2,476)  (6,784)  (924)
Adjusted operating expenses$163,889  $156,464  $605,888  $591,268 
                


Table 3 - Reconciliation of GAAP income from operations to Adjusted income from operations
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP income from operations$39,933  $39,757  $213,222  $281,644 
Non-GAAP Adjustments 13,029   2,476   15,327   924 
Adjusted income from operations$52,962  $42,233  $228,549  $282,568 
                


Table 4 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP provision for income taxes$4,420  $8,375  $46,639  $65,103 
Non-GAAP Adjustments 3,391   579   3,700   (1,308)
Adjusted provision for income taxes$7,811  $8,954  $50,339  $63,795 
                


Table 5 - Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP net income attributable to noncontrolling interest$1,126  $161  $2,421  $1,156 
Non-GAAP Adjustments 498      498    
Adjusted net income attributable to noncontrolling interest$1,624  $161  $2,919  $1,156 
                


Table 6 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
 Three Months Ended Twelve Months Ended
 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP net income attributable to Steven Madden, Ltd.$35,881  $31,791  $171,554  $216,061 
Non-GAAP Adjustments 9,140   1,897   11,129   2,232 
Adjusted net income attributable to Steven Madden, Ltd.$45,021  $33,688  $182,683  $218,293 
        
GAAP diluted income per share$0.49  $0.42  $2.30  $2.77 
Adjusted diluted income per share$0.61  $0.44  $2.45  $2.80 
                

Non-GAAP Adjustments include the items below.

For the fourth quarter 2023:

  • $2.0 million pre-tax ($1.5 million after-tax) expense in connection with the purchase accounting fair value adjustment of inventory acquired in the Almost Famous acquisition, included in cost of goods sold.
  • $2.4 million pre-tax ($1.9 million after-tax) expense in connection with an acquisition and formation of joint ventures, included in operating expenses.
  • $2.0 million pre-tax ($1.5 million after-tax) expense in connection with certain severances, termination benefits and a corporate office relocation, included in operating expenses.
  • $6.5 million pre-tax ($5.0 million after-tax) expense in connection with a trademark impairment.
  • $0.3 million tax benefit in connection with deferred tax adjustments.
  • $0.5 million loss attributable to noncontrolling interest in connection with a trademark impairment.

For the fourth quarter 2022:

  • $1.8 million pre-tax ($1.3 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
  • $0.7 million pre-tax ($0.6 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.

For the full year 2023:

  • $2.0 million pre-tax ($1.5 million after-tax) expense in connection with the purchase accounting fair value adjustment of inventory acquired in the Almost Famous acquisition, included in cost of goods sold.
  • $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.
  • $2.4 million pre-tax ($1.9 million after-tax) expense in connection with an acquisition and formation of joint ventures, included in operating expenses.
  • $3.8 million pre-tax ($2.9 million after-tax) expense in connection with certain severances, termination benefits and a corporate office relocation, included in operating expenses.
  • $6.5 million pre-tax ($5.0 million after-tax) expense in connection with a trademark impairment.
  • $0.3 million tax benefit in connection with deferred tax adjustments.
  • $0.5 million loss attributable to noncontrolling interest in connection with a trademark impairment.

For the full year 2022:

  • $7.1 million pre-tax ($5.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
  • $5.8 million pre-tax ($4.4 million after-tax) benefit in connection with the change in valuation of contingent consideration, included in operating expenses.
  • $0.3 million pre-tax ($0.2 million after-tax) benefit in connection with the exit of a lease, included in operating expenses.
  • $1.5 million tax expense in connection with a deferred tax adjustment.

Contact

Steven Madden, Ltd.
VP of Corporate Development & Investor Relations
Danielle McCoy
718-308-2611
InvestorRelations@stevemadden.com