In the first quarter of 2024, Steven Madden, Ltd. (Nasdaq: SHOO) demonstrated remarkable Q1 performance, characterized by significant growth in both revenues and earnings compared to the previous year.
Key Strategic Achievements
The company made substantial strides in crucial strategic areas, witnessing double-digit revenue expansion in international markets, non-footwear product categories, and direct-to-consumer sales channels. Additionally, there was a notable rebound in year-over-year revenue within the U.S. wholesale footwear sector.
Steven Madden anticipates that its ongoing strategic initiatives will sustain the growth trajectory in both revenue and earnings, creating substantial long-term value for its stakeholders.
Financial Highlights
- Adjusted earnings per share increased by 30% to 65 cents, compared to 50 cents in the prior-year period.
- Total revenues surged by 19.1% year over year to $552.4 million. Net revenues grew by 19.2% to $550.6 million, while commission and licensing fee income decreased by 13.5% to $1.8 million compared to the previous year.
Gross Profit Analysis
Adjusted gross profit rose by 15.3% year over year to $225 million, with adjusted gross margin contracting by 130 basis points to 40.7%. Despite a decrease in gross profit as a percentage of wholesale revenues, there was an increase in gross profit as a percentage of direct-to-consumer revenues.
Operating Expenses and Income
Adjusted operating expenses increased by 11.3% year over year to $164.1 million but declined as a percentage of revenues. Steven Madden reported an adjusted operating income of $61 million, up by 27.8% from the same quarter a year ago, with the adjusted operating margin increasing by 80 basis points.
Segmental Performance
- Wholesale business revenues improved by 21% year over year to $438.2 million, with significant growth in both footwear and accessories/apparel categories.
- Direct-to-consumer revenues increased by 12.8% to $112.3 million, driven by growth in brick-and-mortar and e-commerce sales channels.
Financial Position
Steven Madden ended the first quarter with strong financial metrics, including cash and cash equivalents of $131.5 million, short-term investments of $11.6 million, and stockholders’ equity of $825.2 million.
Shareholder Returns
SHOO repurchased $37.3 million of its common stock in the reported quarter, with approximately $143 million remaining on the share repurchase authorization. Additionally, management approved a quarterly cash dividend of 21 cents per share, payable on June 21, 2024, to stockholders of record as of June 10.
Future Expectations
For 2024, Steven Madden anticipates an 11-13% increase in revenues compared to 2023, with adjusted earnings projected to be between $2.55 and $2.65 per share. This compares to earnings of $2.30 per share reported in 2023.
Should You Purchase or Not?
This positive performance and strategic focus suggest that SHOO could be a promising investment if it aligns with your financial goals and risk profile. However, consider consulting with a financial advisor to better understand its position within the broader market context and your investment strategy.
