Steve Madden reported second-quarter sales increased 31.8 percent to $209.2 million. Net income increased 20.1 percent to $23.8 million, or 55 cents per share, compared to $19.8 million, or 47 cents, a year ago.

Retail comparable store sales increased 11.6 percent for the second quarter. Steve Madden also increased its fiscal 2011 diluted EPS guidance to a range of $2.15 to $2.20.

Edward Rosenfeld, chairman and chief executive officer, commented, “Our second quarter results reflect solid execution across the Company. Our flagship Steve Madden brand led the way, as the trend-right merchandise created by Steve and his design team resulted in strong gains in the Steve Madden Women’s Wholesale, Retail and International divisions. In addition, we further enhanced our footwear and accessories offerings in the quarter with the acquisitions of Topline and Cejon, both completed in May. We believe that the continued momentum in our core business, combined with the expansion opportunities in our newer businesses, sets the stage for long term sales and earnings growth for the Company.”

Second Quarter 2011 Results

Second quarter net sales were $209.2 million compared to $158.7 million reported in the comparable period of 2010. Net sales from the wholesale business rose 35.6 percent to $175.2 million from $129.2 million in the second quarter of 2010. The growth was primarily driven by (i) strong gains in the Steve Madden Women’s and International businesses; (ii) the transition of the Company’s Target private label and Olsenboye footwear businesses from the buying agency model to the wholesale model; and (iii) net sales contributions from the recent acquisitions, Topline and Cejon, both completed in May. Retail net sales grew 15.3 percent to $34.0 million from $29.5 million in the second quarter of the prior year. Same store sales increased 11.6 percent following a 7.4 percent increase in the prior year’s second quarter. The Company opened 1 full-price store and 1 outlet store, acquired 1 Report store in the Topline acquisition, and closed 3 stores in the quarter.

Gross margin was 40.2 percent in the second quarter as compared to 43.4 percent in the comparable period of 2010. Gross margin in the wholesale business was 35.4 percent in the second quarter as compared to 38.7 percent in the prior year’s second quarter, with the decrease due to sales mix shifts as a result of the inclusion of the Company’s Target private label footwear business in net sales and the addition of the Topline business, which is largely private label and therefore carries a lower gross margin than the rest of our wholesale business. Excluding these businesses, gross margin in the wholesale business would have been moderately higher in the second quarter as compared to the second quarter of last year. Retail gross margin increased to 64.8 percent for the second quarter from 63.9 percent in the comparable period of the prior year as a result of more full-price selling and reduced discounting.

Operating expenses as a percent of sales were 24.5 percent for the second quarter compared to 26.5 percent in the same period of the prior year, due to leverage on increased sales.

Operating income for the second quarter was $37.2 million, or 17.8 percent of net sales, compared with operating income of $32.1 million, or 20.2 percent of net sales, in the same period of 2010.

Net income increased 20.1 percent to $23.8 million, or $0.55 per diluted share, in the second quarter compared to $19.8 million, or $0.47 per diluted share in the prior year’s second quarter, adjusted for a three-for-two stock split payable to shareholders of record on May 20, 2011.

The Company ended the quarter with 83 retail locations, including the Company’s Internet store.

Six-Month 2011 Results

For the first six months of 2011, net sales increased 29.2 percent to $374.9 million from $290.3 million in the comparable period last year.

Net income was $41.6 million, or $0.97 per diluted share, for the first six months of 2011 compared to $35.2 million or $0.83 per diluted share in the first six months of 2010, adjusted for a three-for-two stock split payable to shareholders of record on May 20, 2011.

At the end of the second quarter, cash, cash equivalents and marketable securities totaled $132.2 million.

Arvind Dharia, Chief Financial Officer, commented, “Our strong financial performance and prudent capital management has enabled us to make strategic investments while maintaining a strong balance sheet.”

Company Outlook

For fiscal 2011, the Company now expects net sales to increase 47 — 49 percent compared to 2010. Diluted EPS is now expected to be in the range of $2.15 — $2.20, compared to previous guidance of diluted EPS in the range of $2.03 — $2.10.

Steve Madden’s sells footwear under the following brands: Steve Madden,
Steven by Steve Madden, Madden Girl, Stevies, Betsey Johnson,
Betseyville, Report, Report Signature, R2 by Report and Big Buddha. It
is also the licensee of various brands, including Olsenboye for
footwear, handbags and belts, Elizabeth and James, Superga, l.e.i. and
GLO for footwear and Daisy Fuentes for handbags.