Steve Madden reports fall in Q3 net sales

Thursday, 30 October 2014

REPORT_ Steve Madden in financial results for the third quarter ended September 30, 2014 said that company’s net sales were 392 million dollars compared to 394.8 million dollars in the same period of 2013. Gross margin was 34.7 percent compared to 35.4 percent in the same period last year.

Operating expenses as a percentage of sales were 20.9 percent compared to 19.4 percent of sales in the same period of 2013. Operating income totaled 59.3 million dollars, or 15.1 percent of net sales, compared with operating income of 68.1 million dollars, or 17.2 percent of net sales, in the same period of 2013. Net income was 39.2 million dollars, or 0.62 dollars per diluted share, compared to 44 million dollars, or 0.66 dollars per diluted share in the prior year's third quarter.

Commenting on the results, Edward Rosenfeld, Chairman and Chief Executive Officer, said, “As previously reported, business during the third quarter was softer than we anticipated, particularly in our retail segment, as we continue to be impacted by a lack of significant fashion footwear trends on which to capitalize. In August, we added a powerful contemporary footwear brand to our portfolio with the acquisition of Dolce Vita, and in September, we signed a definitive agreement to acquire our Mexican licensee, an important move in our continued international expansion.”

Net sales from the wholesale business were 343.3 million dollars in the third quarter compared to 345.9 million dollars in the third quarter of 2013. Excluding the results of Dolce Vita, wholesale net sales decreased 4.9 percent compared to the prior year period. Retail net sales were 48.7 million dollars compared to 48.9 million dollars in the third quarter of the prior year. The decrease in net sales was due to a same store sales decrease of 7.4 percent, offset by an increase in net sales resulting from the net opening of 11 new stores since the end of the third quarter last year.

During the third quarter, the company opened four outlet stores and acquired the Dolce Vita Internet store. The company also acquired, through a 50.1 percent interest in its South African joint venture, four Steve Madden stores in South Africa. Including the stores in South Africa, the company ended the quarter with 133 company-operated retail locations, including 28 outlets and four internet stores.

Factoring in the recent acquisition of Dolce Vita and current expectations for the remainder of the year, for fiscal year 2014, the company expects that net sales will increase 1percent to 2percent over net sales in 2013. Diluted EPS for fiscal year 2014 is expected to be in the range of 1.81 dollars to 1.86 dollars.