Steven Madden, Ltd. reported earnings slid 28.9 percent in the second quarter ended June 30 as sales fell 16.8 percent on reduced wholesale revenues. Results were in line with expectations and the trendy footwear manufacturer maintained its outlook for the year.
Second Quarter 2023 Results
- Revenue decreased 16.8 percent to $445.3 million compared to $535.0 million in the same period of 2022.
- Gross profit as a percentage of revenue was 42.6 percent compared to 40.7 percent in the same period of 2022.
- Operating expenses as a percentage of revenue were 32.7 percent compared to 28.5 percent in the same period of 2022. Adjusted operating expenses as a percentage of revenue were 32.6 percent compared to 28.2 percent in the same period of 2022.
- Income from operations totaled $44.0 million, or 9.9 percent of revenue, compared to $65.2 million, or 12.2 percent of revenue, in the same period of 2022. Adjusted income from operations totaled $44.5 million, or 10.0 percent of revenue, compared to $67.0 million, or 12.5 percent of revenue, in the same period of 2022.
- Net income attributable to Steven Madden, Ltd. was $34.5 million, or $0.46 per diluted share, compared to $48.5 million, or $0.62 per diluted share, in the same period of 2022. Adjusted net income attributable to Steven Madden, Ltd. was $34.9 million, or $0.47 per diluted share, compared to $49.8 million, or $0.63 per diluted share, in the same period of 2022.
Edward Rosenfeld, chairman and chief executive officer, commented, “We were pleased to deliver earnings results in line with expectations for the second quarter despite the challenging operating environment. Our performance in the quarter reflects our disciplined control of inventory and expenses, even as we continue to invest in product innovation, consumer engagement and our long-term growth initiatives. While the retail environment remains choppy, we are confident that the power of our brands and the strength of our business model position us for sustainable growth and value creation over the long term.”
Second Quarter 2023 Channel Results
Revenue for the wholesale business was $314.6 million, a 20.8 percent decrease compared to the second quarter of 2022, including a 19.4 percent decrease in wholesale footwear revenue and a 24.6 percent decrease in wholesale accessories/apparel revenue. Gross profit as a percentage of wholesale revenue increased to 33.6 percent compared to 31.6 percent in the second quarter of 2022 driven by margin improvement in the wholesale accessories/apparel segment.
Direct-to-consumer revenue was $128.2 million, a 5.4 percent decrease compared to the second quarter of 2022 driven by declines in both the brick-and-mortar and e-commerce businesses. Gross profit as a percentage of direct-to-consumer revenue was 63.7 percent compared to 66.4 percent in the second quarter of 2022 driven by increased promotional activity.
The company ended the quarter with 242 brick-and-mortar retail stores and five e-commerce websites, as well as 22 company-operated concessions in international markets.
Balance Sheet and Cash Flow Highlights
As of June 30, 2023, cash, cash equivalents and short-term investments totaled $274.4 million. Inventory totaled $207.8 million, a 32.2 percent decrease compared to the second quarter of 2022.
During the second quarter of 2023, the company spent approximately $25.8 million 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 September 25, 2023 to stockholders of record as of the close of business on September 15, 2023.
2023 Outlook
For 2023, the company continues to expect revenue will decrease 6.5 percent to 8.0 percent compared to 2022. The company expects diluted EPS will be in the range of $2.38 to $2.48. The company continues to expect adjusted diluted EPS will be in the range of $2.40 to $2.50.
Photo courtesy Steve Madden