Steve Madden reported first quarter net sales increased 60.5 percent to $266.0 million. First quarter net income increased 22.5 percent to $21.9 million, or 50 cents per diluted share, compared to $17.9 million, or 42 cents, in the prior year's first quarter.
Retail comparable store sales increased 11.9 percent for the first quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “Our first quarter results reflect continued momentum throughout our business. We were particularly pleased with our core Steve Madden brand, which recorded strong growth across categories, channels and geographies. The ongoing momentum in our flagship brand, combined with the growth we are seeing from our newer brands and businesses, gives us confidence that we can continue to drive sales and earnings gains in 2012 and beyond.”
First Quarter 2012 Results
First quarter net sales totaled $266.0 million compared to $165.8 million in the comparable period of 2011, an increase of 60.5 percent. Net sales from the wholesale business were $228.9 million compared to $134.3 million in the first quarter of 2011, driven by double-digit organic growth in both wholesale footwear and wholesale accessories, as well as the impact from the acquisitions of Topline, Cejon and SM Canada. Retail net sales grew 17.6 percent to $37.0 million compared to $31.5 million in the first quarter of the prior year. Same store sales increased 11.9 percent following a 12.0 percent increase in the prior year’s first quarter.
Gross margin was 36.1 percent in the first quarter of 2012 as compared to 41.7 percent in the same period last year. Gross margin in the wholesale business was 32.3 percent compared to 37.9 percent in the prior year's first quarter. The decline was due to sales mix shifts as a result of the acquisition of Topline and the growth in the Adesso Madden private label business, which increased over 90 percent compared to the prior year’s first quarter. Excluding these mix shifts, wholesale gross margin was moderately higher compared to the same period in 2011. Retail gross margin increased to 60.1 percent, compared to 58.1 percent in the first quarter of 2011, reflecting improvement in both full-price and outlet stores.
Operating expenses as a percentage of sales were 24.5 percent compared to 27.9 percent in the same period of the prior year, due to leverage on higher sales and an increased mix of wholesale, which has lower operating expenses as a percentage of sales than the retail business.
Operating income for the first quarter increased to $35.4 million, or 13.3 percent of net sales, compared with operating income of $27.5 million, or 16.6 percent of net sales, in the same period of 2011.
Net income for the quarter increased 22.5 percent to $21.9 million, or $0.50 per diluted share, compared to $17.9 million, or $0.42 per diluted share in the first quarter of 2011.
The Company opened one full-price store and one outlet store, acquired seven stores in the SM Canada acquisition and closed four stores during the first quarter. The Company ended the quarter with 89 company-operated retail locations, including seven outlets and one Internet store.
At the end of the first quarter, cash, cash equivalents, and current and non-current marketable securities totaled $165.0 million.
Company Outlook
For fiscal 2012, the Company expects net sales to increase 24 26 percent from 2011, compared to previous guidance of a 21 23 percent increase. Diluted EPS is now expected to be in the range of $2.62 $2.72, compared to previous guidance of $2.60 $2.70.
