Steve Madden Q4 net sales up 12.8 percent

Tuesday, 26 February 2013
Steve Madden, a New York-based designer and marketer of fashion footwear and accessories, announced that for the fourth quarter of 2012 its net sales increased 12.8 percent. Retail comparable store sales increased 5.9 percent. Gross margin improved to 39.3 percent compared to 35.5 percent in the fourth quarter of 2011. Net income was 33.0 million dollars, or 0.74 dollars per diluted share.

On an after-tax basis, the benefit positively impacted net income in the fourth quarter by 0.6 million dollar, or 0.01 dollar per diluted share. Net income in the fourth quarter of 2011 was 23.8 million dollars, or 0.55 dollar per diluted share.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented on the results saying, “We are pleased to have delivered strong results in the fourth quarter, capping off an outstanding year for the Company. Our flagship Steve Madden brand was the key driver in the quarter, with robust growth across categories, channels and geographies. The strength in our flagship brand, combined with the opportunities we have with our newer brands, gives us confidence that we can continue to drive sales and earnings growth as we move ahead.”

Fourth quarter net sales increased 12.8 percent to 315.5 million dollars compared to 279.8 million dollars in the same period of 2011. Net sales from the wholesale business grew 9.4percent to 247.2 million dollars compared to 225.9 million dollars in the fourth quarter of 2011, driven by strong growth in the Steve Madden footwear and handbag divisions, as well as the benefit from the acquisition of SM Canada. Retail net sales rose 27.0 percent to 68.3 million dollars compared to 53.8 million dollars in the fourth quarter of the prior year. Same store sales increased 5.9 percent following a 15.9 percent increase in the prior year’s fourth quarter.

Gross margin increased to 39.3percent in the fourth quarter of 2012 compared to 35.5percent in the same period last year. Gross margin in the wholesale business expanded to 32.6 percent compared to 28.9percent in the prior year's fourth quarter, with improvements in both the wholesale footwear and wholesale accessories businesses. Retail gross margin increased to 63.7 percent in the fourth quarter of 2012 compared to 63.1percent in the fourth quarter of 2011, driven by the benefit from the acquisition of the higher-margin SM Canada retail business.

Fourth quarter net income was 33.0 million dollars, or 0.74 dollars per diluted share. Net income included the aforementioned benefit related to a greater-than-anticipated recovery in the bankruptcy process of a note receivable, which, on an after-tax basis, positively impacted net income by 0.6 million dollars, or 0.01 dollars per diluted share. Net income in the fourth quarter of 2011 was 23.8 million dollars, or 0.55 dollars per diluted share.

For the Full Year Ended December 31, 2012, net sales increased 26.7 percent to 1.2 billion dollars from 968.5 million dollars in the comparable period last year. Net income was 119.6 million dollars, or 2.71 dollars per diluted share, for the year ended December 31, 2012. Net income included a 2.5 million dollars charge for settlement of a class action lawsuit related to unauthorized text messaging and a 0.8 million dollars net charge for impairment of a note receivable from the Company’s former licensee for Betsey Johnson retail and apparel, in addition to a 5.1 million dollars impairment charge and a 0.9 million dollars charge for bad debt, both related to the bankruptcy of Bakers Footwear Group. Net income for fiscal 2012 was 119.4 million dollars, or 2.70 dollars per diluted share. Net income for fiscal 2011 was 97.3 million dollars, or 2.25 dollars per diluted share. At the end of the year, cash, cash equivalents and marketable securities totalled 266.3 million dollars.

For fiscal year 2013, the Company expects that net sales will increase 6 – 8percent from 2012. Diluted EPS is expected to be in the range of 2.95 dollars – 3.05 dollars.