Opined Edward Rosenfeld, Chairman and Chief Executive Officer, “We were pleased to deliver solid overall financial results in the first quarter in a difficult environment. While a lack of fashion footwear trends and the soft overall retail climate continued to challenge our retail segment, our wholesale business was outstanding. Wholesale net sales increased 13.3 percent, led by strong growth across all Steve Madden brands. We also added a luxury brand to our portfolio in the quarter with our acquisition of majority ownership in the Brian Atwood intellectual property.”
Net sales from the wholesale business grew 13.3 percent including double-digit percentage gains in the Steve Madden Women’s, Steve Madden Men’s and Madden Girl wholesale footwear divisions. Gross margin in the wholesale business was 32.6 percent compared to 32.3 percent in last year’s first quarter, driven by improvement in both branded and private label wholesale footwear margins. Retail net sales decreased 12.1 percent. The increase in net sales resulting from the net opening of 13 new stores since the end of the first quarter last year was more than offset by a same store sales decrease of 17.2 percent for the first quarter of 2014.
During the first quarter, the Long Island, New York-based company opened one full-price store and three outlet stores and closed two full-price stores. The company ended the quarter with 123 company-operated retail locations, including 20 outlets and four Internet stores.
For fiscal year 2014, the company continues to expect that net sales will increase 5 percent to 7 percent over net sales in 2013. Diluted EPS for fiscal year 2014 is expected to be in the range of 2.05 dollars to 2.15 dollars, unchanged from previous guidance.