Steve Madden’s fourth quarter 2022 revenue decreased 18.6 percent to $470.6 million in the period ended December 31, compared to $578.5 million in the prior-year comparable period.
Revenue for the wholesale business was $308.8 million, a 24.8 percent decrease compared to the fourth quarter of 2021 when wholesale revenue experienced outsized growth of 30.8 percent versus the pre-COVID fourth quarter of 2019. Wholesale footwear revenue decreased 25.5 percent compared to the fourth quarter of 2021 when wholesale footwear revenue increased 29.9 percent versus the pre-COVID fourth quarter of 2019. Wholesale accessories/apparel revenue decreased 22.8 percent compared to the fourth quarter of 2021 when wholesale accessories/apparel revenue increased 33.3 percent versus the pre-COVID fourth quarter of 2019.
DTC revenue was $159.3 million, a 3.2 percent decrease compared to the fourth quarter of 2021 driven by a decline in its brick-and-mortar business, partially offset by a modest increase in the e-commerce business. Gross profit as a percentage of DTC revenue increased to 64.0 percent compared to 63.5 percent in the fourth quarter of 2021 driven by a reduction in air freight expense.
Gross margins increased to 42.2 percent of sales in Q4, compared to 41.2 percent in the 2021 comp quarter. Wholesale gross margins declined to 30.5 percent of sales in the quarter, compared to 31.8 percentin the prior-year period as a result of increased closeouts compared to the prior year period, when closeout activity was unusually low.
Fourth quarter operating expenses as a percentage of revenue were 33.8 percent compared to 27.0 percent in the 2021 comp quarter. Adjusted operating expenses as a percentage of revenue were 33.2 percent compared to 26.2 percent in the fourth quarter of 2021.
Income from operations was $39.8 million, or 8.4 percent of revenue, compared to $79.4 million, or 13.7 percent of revenue, in the same period of 2021. Adjusted income from operations was $42.2 million, or 9.0 percent of revenue, compared to $86.9 million, or 15.0 percent of revenue, in the fourth quarter of 2021.
Net income attributable to Steven Madden, Ltd. was $31.8 million, or 42 cents per diluted share, compared to $66.0 million, or 81 cents per diluted share, in the 2021 comp quarter. Adjusted net income attributable to Steven Madden, Ltd. was $33.7 million, or 44 cents per diluted share, compared to $70.4 million, or 87 cents per diluted share, in the fourth quarter of 2021.
Full-year 2022 revenue increased 13.7 percent to $2.12 billion, compared to $1.87 billion in 2021. Gross margins increased to 41.2% of sales compared to 41.1 percent in 2021. Operating expenses as a percentage of revenue were 27.9 percent, flat to 2021. Adjusted operating expenses as a percentage of revenue were 27.9 percent compared to 27.1 percent in 2021.
Income from operations was $281.6 million, or 13.3 percent of revenue, in 2022, compared to $243.6 million, or 13.1 percent of revenue, in 2021. Adjusted income from operations was $282.6 million, or 13.3 percent of revenue, compared to $261.9 million, or 14.0 percent of revenue, in 2021.
Net income attributable to Steven Madden, Ltd. was $216.1 million, or $2.77 per diluted share, compared to $190.7 million, or $2.34 per diluted share, in 2021. Adjusted net income attributable to Steven Madden, Ltd. was $218.3 million, or $2.80 per diluted share, in 2022, compared to $203.7 million, or $2.50 per diluted share, in 2021.
The company ended the quarter with 232 company-operated brick-and-mortar retail stores and six e-commerce websites, as well as 20 company-operated concessions in international markets.
2023 Outlook
For 2023, the company expects revenue will decrease in a range of 6.5 percent to 8.0 percent compared to 2022. SHOO expects diluted EPS will be in the range of $2.40 to $2.50 a share.
Chairman and CEO Edward Rosenfeld commented, “We are pleased to have delivered earnings results in line with our expectations for the fourth quarter and full year 2022 despite an increasingly challenging backdrop. 2022 was a record year for the Company, with double-digit percentage growth in both revenue and earnings, reflecting the power of our brands, the strength of our business model and the successful execution of our strategic initiatives.
“Looking ahead, we are cautious on the near-term outlook due to the challenging operating environment and conservative initial Spring orders from our wholesale customers as they prioritize inventory control. That said, we have a proven ability to navigate difficult market conditions with our agile business model, which combines our test-and-react strategy and industry-leading speed-to-market capability. Looking out further, we are confident that our unique competitive advantages and the continued execution of our strategy will enable us to drive sustainable growth and value creation over the long term.”
