Steve Madden Q2 sales down, lowers full year guidance

Thursday, 31 July 2014

REPORT_ Steve Madden, announcing its financial results for the second quarter ended June 30, 2014 said that its net sales were 295.7 million dollars compared to 297.6 million dollars in the same period of 2013. Gross margin was 36.2 percent as compared to 37.2 percent in the same period last year. Given the decrease in financial results, company has lowered its full year outlook.

Elaborating on the results, Edward Rosenfeld, Chairman and Chief Executive Officer, said, “The second quarter proved difficult for Steve Madden, as we continued to face a challenging retail environment, weak mall traffic, and a women’s footwear market with few significant fashion trends. In our wholesale segment, our branded footwear business grew sales in the mid-single digits range, led by our Steve Madden Men’s, Steve Madden Women’s, and Steven lines, while our private label footwear business experienced a sales decrease, as expected, due primarily to a temporary reduction in sales with one customer during the quarter. Based on current trends we are lowering our guidance for the full year.”

Net sales from the wholesale business were 249.8 million dollars in the second quarter compared to 251.4 million dollars in the second quarter of 2013, including rise in the branded footwear business and growth in wholesale accessories, offset by a decrease in private label footwear. Gross margin in the wholesale business was 31.3 percent compared to 32.1 percent in last year’s second quarter, due primarily to increased markdown allowances.

Retail net sales were 45.9 million dollars compared to 46.2 million dollars in the second quarter of the prior year. The decrease in net sales was due to a same store sales decrease of 8.5 percent partially offset by an increase in net sales resulting from the net opening of 11 new stores since the end of the second quarter last year. During the second quarter, the company opened four outlet stores and closed two full-price stores and one Internet store. The company ended the quarter with 124 company-operated retail locations, including 24 outlets and three Internet stores.

Based on second quarter results and updated expectation for the second half of the year, for fiscal year 2014, the company now expects that net sales to increase 2 percent to 4 percent over net sales in 2013. Diluted EPS for fiscal year 2014 is now expected to be in the range of 2 dollars to 2.10 dollars.