Steve Madden reported fourth quarter net sales increased 15.4% to $161.0 million. Wholesale sales increased 17.7% while retail sales rose 10.1%, with comparable store sales up 14.1% for the fourth quarter.

Operating margin was 17.0% of sales in the fourth quarter of 2010, compared with operating margin of 15.0% in the same period of 2009.

Fourth quarter net income increased 30.0% to $17.6 million, or 62 cents per diluted share, compared to $13.6 million, or 49 cents per diluted share, in the prior year's fourth quarter.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “The fourth quarter marked a positive conclusion to an exciting and impressive year for our Company. Steve and his design team continued to deliver inspired, trend-right merchandise, enabling us to record double-digit sales growth in both our wholesale and retail divisions despite the tough comparisons from a year ago. The strong sales growth, combined with increased licensing royalty income and careful management of expenses, led to a 30% increase in net income for the quarter. As we look ahead, we will remain focused on maintaining momentum in our core business while continuing to diversify our business by developing our newer brands, expanding our international footprint and growing our accessories and licensing businesses.”

Fourth Quarter 2010 Results

Fourth quarter net sales were $161.0 million compared to $139.5 million reported in the comparable period of 2009. Net sales from the wholesale business were $115.8 million compared to $98.4 million in the fourth quarter of 2009, with particular strength in our international business as well as Madden Girl. New businesses, including Madden, Material Girl and Big Buddha, also contributed to the growth, as did the transition of two of the Company's mass merchant customers from a buying agency model to a wholesale model. Retail net sales grew 10.2% to $45.3 million compared to $41.1 million in the fourth quarter of the prior year despite a smaller store base. Same store sales for the fourth quarter of 2010 increased 14.1% following a 7.0% increase in last year's fourth quarter.

Gross margin was 43.2% in the fourth quarter of 2010, compared to 44.1% in the same period last year. Gross margin in the wholesale business was 35.7% as compared to 37.9% in the prior year's fourth quarter, due primarily to (i) the inclusion of mass merchant revenue in the net sales line; (ii) an increased mix of international sales; and (iii) lower margin in the Steven division. Retail gross margin increased to 62.5% from 58.7% in the comparable period of the prior year, benefitting from increased full-price selling and reduced discounting as compared to the fourth quarter of 2009.

Operating expenses as a percent of sales for the fourth quarter of 2010 were 29.1% versus 31.8% in the same period of the prior year, due to leverage on increased sales.

Operating income for the fourth quarter of 2010 increased to $27.3 million, or 17.0% of sales, compared with operating income of $21.0 million, or 15.0% of sales, in the same period of 2009.

Net income for the fourth quarter of 2010 increased 30.0% to $17.6 million, or $0.62 per diluted share, compared to $13.6 million, or $0.49 per diluted share, in the prior year's fourth quarter.

During the fourth quarter of 2010, the Company opened one full-price store and one outlet store.

Full Year 2010 Results

For the full year ended December 31, 2010, net sales increased 26.2% to $635.4 million compared to $503.6 million in fiscal 2009.

Net income totaled $75.7 million, or $2.68 per diluted share, for the year ended December 31, 2010, compared to $50.1 million, or $1.82 per diluted share, in fiscal 2009.

The Company opened 3 stores and closed 8 underperforming stores during 2010, ending the year with 84 retail locations, including the Internet store.

At the end of the year, cash, cash equivalents and marketable securities totaled $193.8 million.

Arvind Dharia, Chief Financial Officer, commented, “We are pleased to have ended 2010 with a healthy balance sheet which provides us with a strong financial foundation to support our future growth initiatives.”

Company Outlook

For the year ending December 31, 2011, the Company expects net sales to increase 20% – 22%. Excluding the transition of two businesses �€“ a mass merchant private label business and the Olsenboye footwear business �€“ from the commission income line to the net sales line on the income statement, the Company expects net sales to increase 10% – 12% during the year ending December 31, 2011. Diluted EPS is expected to be in the range of $3.00 to $3.10. Capital expenditures are planned to be approximately $10 million in 2011 as compared to $3.4 million in 2010. The Company plans to open 6 to 8 stores and to close between 5 and 7 locations in 2011.