Steve Madden reported first-quarter sales increased 4.9 percent to $278.9 million compared to $266.0 million in the same period of 2012.
Retail comparable store sales increased 3.0 percent.
Gross margin expanded 70 basis points to 36.8 percent compared to 36.1 percent in the same period last year due primarily to an increased mix of retail, which has higher gross margins than the wholesale business.
Consolidated operating expenses as a percentage of sales were 25.3 percent compared to 24.5 percent in the same period of the prior year due to an increased mix of retail, which has higher operating expenses as a percentage of sales than the wholesale business.
Operating income totaled $36.4 million, or 13.1 percent of net sales, compared with operating income of $35.4 million, or 13.3 percent of net sales, in the same period of 2012.
Net income increased 7.0 percent to $23.4 million, or $0.52 per diluted share, compared to $21.9 million, or $0.50 per diluted share in the prior year’s first quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, We delivered solid sales and earnings results in the first quarter despite challenging weather conditions and retail traffic trends. These results are attributable to continued momentum in our accessories business, growth in our retail segment driven by both new stores and moderate comparable store sales growth, as well as expansion of our international business. Steve and his design team continue to deliver outstanding, on-trend product assortments that are enabling us to outperform the competition, and so despite the challenging environment, we are confident we can continue to advance on our growth objectives.
First Quarter 2013 Segment Results
Net sales from the wholesale business grew 2.2 percent to $233.9 million in the first quarter compared to $228.9 million in the first quarter of 2012, due to continued strong growth in the wholesale accessories business, partially offset by a modest decrease in the wholesale footwear business driven by a decline in our Topline division. Gross margin in the wholesale business was 32.3 percent, flat to last years first quarter.
Retail net sales rose 21.7 percent to $45.1 million compared to $37.0 million in the first quarter of the prior year. Same store sales increased 3.0 percent following an 11.9 percent increase in the prior years first quarter. Retail gross margin increased to 60.3 percent in the first quarter of 2013 compared to 60.1 percent in the first quarter of 2012, driven by an increased mix of sales from the higher-margin SM Canada retail business.
The Company opened one Steve Madden full-price store in the first quarter and ended the quarter with 110 company-operated retail locations, including 11 outlets and three Internet stores.
Balance Sheet and Cash Flow
During the quarter, the Company repurchased 252,214 shares of the Companys common stock for $11.1 million at an average price of $44.17 per share.
At the end of the first quarter, cash, cash equivalents, and current and non-current marketable securities totaled $277.9 million.
Company Outlook
The Company reaffirms fiscal year 2013 guidance that net sales will increase 6-8 percent from 2012. Diluted EPS is expected to be in the range of $2.95-$3.05.
In addition to marketing products under its owned brands including Steve Madden, Steven by Steve Madden, Madden Girl, Freebird by Steven, Stevies, Betsey Johnson, Betseyville, 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 Elizabeth and James, Superga, l.e.i. and GLO for footwear. The Company also operates 110 retail stores (including the Company’s three online stores).
