Steven Madden Ltd (NASDAQ:SHOO) Q4 2020 Earnings Conference Call February 25, 2021 8:30 AM ET Company Participants Danielle McCoy - Director, Corporate Development & IR Edward Rosenfeld - Chairman & CEO Zine Mazouzi - CFO Conference Call Participants Erinn Murphy - Piper Sandler & Co. Camilo Lyon - BTIG Janine Stichter - Jefferies Laura Champine - Loop Capital Markets Samuel Poser - Williams Trading Tom Nikic - Wells Fargo Securities Susan Anderson - B. Riley Securities Kelly Crago - Citigroup Mauricio Sern ...

Steven Madden, Ltd. (NASDAQ:SHOO) Q3 2020 Earnings Conference Call October 27, 2020 8:30 AM ET Company Participants Danielle McCoy - IR Ed Rosenfeld - Chairman & CEO Conference Call Participants Paul Lejuez - Citi Camilo Lyon - BTIG Janine Stichter - Jefferies Matthew Degulis - KeyBanc Capital Will Gaertner - Susquehanna Jay Sole - UBS Laura Champine - Loop Capital Dana Telsey - Telsey Advisory Susan Anderson - B. Riley Securities Tom Nikic - Wells Fargo Chris Svezia - Wedbush Erinn Murphy - Piper Sandler O ...

Steven Madden, Ltd. (NASDAQ:SHOO) Q2 2020 Earnings Conference Call July 29, 2020 8:30 AM ET Company Participants Danielle McCoy - Investor Relations Ed Rosenfeld - Chief Executive Officer Conference Call Participants Paul Lejuez - Citi Jay Sole - UBS Matthew Degulis - KeyBanc Capital Markets Erinn Murphy - Piper Sandler Sam Poser - Susquehanna Camilo Lyon - BTIG Laura Champine - Loop Capital Susan Anderson - B. Riley FBR Janine Stichter - Jefferies Steve Marotta - CL King & Associates Tom Nikic - Wells Farg ...

Financial Data and Key Metrics Changes - Consolidated revenue decreased 13.6% to $359.2 million compared to $415.8 million in the prior year [32] - Diluted EPS decreased 62% [14] - Operating income totaled $14.2 million, or 4% of total revenue, compared to $45.1 million, or 10.8% of total revenue in the prior year [40] - Consolidated gross margin was 37.2%, down from 38.9% in the prior year, impacted by $11.7 million in inventory reserves due to COVID-19 [37] Business Segment Data and Key Metrics Changes - Wholesale revenue declined 13% to $302.7 million, with footwear down 15% to $235.1 million and accessories and apparel down 5.4% to $67.7 million [32][33] - Retail revenue decreased 15.8% to $52.9 million due to store closures, although e-commerce revenue was up mid-teens for the quarter [34] - E-commerce revenue saw a strong rebound, up approximately 75% for the quarter to date [18][26] Market Data and Key Metrics Changes - In April and May, wholesale revenue was trending down approximately 75% [17] - Retail segment revenue quarter-to-date was down nearly 60%, with most sales occurring in the e-commerce channel [18] - As of the call, approximately 50% of wholesale customer doors were open, with expectations for more openings in the coming weeks [97] Company Strategy and Development Direction - The company aims to maintain a strong financial position to navigate the crisis and position itself for future growth [11][21] - Focus on e-commerce growth initiatives, including increased investments in digital marketing and new features like try-before-you-buy [26] - The company plans to leverage its strong brand and inventory management to capture market share as the retail landscape changes [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the crisis and emerge stronger, citing a strong balance sheet and brand strength [20][21] - The company anticipates that consumer preferences will shift towards value-oriented products and mass merchants, which aligns with its private label business [24] - Management noted that while there are challenges, there are also opportunities for growth in e-commerce and digital channels [25][28] Other Important Information - The company suspended its quarterly cash dividend and share repurchases to preserve liquidity [12][42] - Inventory totaled $102.3 million, down 11.3% compared to the prior year [41] - The company withdrew its 2020 revenue and earnings guidance due to uncertainty related to COVID-19 [43] Q&A Session Summary Question: Update on current inventory position - The company acknowledged some excess inventory but believes it is in a better position than most vendors due to its inventory turnover rate [46] Question: How are fall orders unfolding? - Fall inventory deliveries are expected to be pushed back by about a month, with a focus on managing excess spring/summer inventory [49] Question: How to meet consumer needs with fewer social events? - The company plans to adapt its product offerings based on current trends and consumer preferences, leveraging its ability to respond quickly to market changes [55] Question: Traffic and conversion post-store openings - Initial sales were down about 60%, but there was improvement in the last two days, with some stores performing better than others [60] Question: Impact of reopening on labor and expenses - The company has managed to reopen stores with appropriate staffing levels while incurring additional expenses for safety measures [63] Question: Performance of private label business - The private label business initially saw a significant decrease in sales but has shown gradual improvement and is now in line with last year's performance [82] Question: E-commerce penetration and marketing strategy - E-commerce penetration was around 20% last year, expected to be significantly higher this year, with increased digital marketing investments [72][74] Question: Inventory management strategies - The company plans to use various strategies to move excess inventory, including promotions and off-price channels [109]

Financial Data and Key Metrics Changes - Total revenue for Q4 2019 increased by 0.7% to $419.6 million compared to $416.8 million in Q4 2018 [26] - Full year 2019 total revenue increased by 6.5% to $1.8 billion from $1.7 billion in 2018 [33] - Diluted EPS for Q4 2019 was $0.39, down from $0.42 in Q4 2018, while full year diluted EPS increased to $1.95 from $1.83 [32][33] - Consolidated gross margin was 37.8%, slightly down from 38.1% in the prior year [30] Business Line Data and Key Metrics Changes - Wholesale segment revenue declined by 1.1% to $313.8 million, with wholesale footwear revenue approximately flat at $233.4 million [26][30] - Retail segment revenue increased by 8.7% to $101.4 million, with same-store sales up 6.7% [28] - The wholesale handbag business grew by 28%, marking the third consecutive year of double-digit growth [10] Market Data and Key Metrics Changes - International revenue for the Steve Madden brand increased by high-single digits in 2019, with strong performance in Europe [12] - The company ended Q4 with 227 Company-operated retail stores, including 68 outlets and eight e-commerce stores [28] Company Strategy and Development Direction - The company aims to enhance the Steve Madden brand, expand e-commerce, and grow international markets, particularly in Europe [20] - Focus on positioning new acquisitions, GREATS and BB Dakota, for profitable growth [20] - Plans to increase marketing investment significantly in 2020 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the near-term outlook due to headwinds from the coronavirus outbreak, tariffs, and the termination of the Kate Spade footwear license [21] - Estimated adverse impact on EPS in 2020 of approximately $0.35 compared to 2019 [22] - Management remains optimistic about the long-term growth opportunities despite short-term challenges [23] Other Important Information - The company repurchased approximately 3 million shares for $102 million in 2019 and raised the quarterly dividend by 7% [17] - The effective tax rate for Q4 was 6.3%, down from 9.2% in the prior year [32] Q&A Session Summary Question: Can you parse out the negative mid-single-digit impact in the first half? - Management indicated that the headwinds from coronavirus and tariffs account for about a $0.20 EPS headwind in the first half, with a total forecast of $0.22 for the year [45][46] Question: What is the current state of the North American wholesale climate? - Management noted a soft start to the year for many wholesale customers, particularly in the footwear category, but positive early selling for sandals and open dress shoes [48] Question: Can you elaborate on the coronavirus impact? - The primary impact is related to supply chain disruptions, with approximately 90% of Chinese factories open but operating at reduced productivity [53][54] Question: How did the Steve Madden Women's wholesale business perform in Q4? - The business was down in Q4 due to a shift in boot deliveries from Q4 to Q3, but overall for the year, it grew by 7% [58][60] Question: What percentage of total product is made in China? - Currently, about 73% of total products are made in China, down from 88% in 2019 [75][76] Question: How are you seeing price increases in wholesale and retail? - Price increases are expected to be in the low to mid-single digits, with some reduction in prices due to tariff adjustments [106]

Steven Madden, Ltd. (NASDAQ:SHOO) Q3 2019 Earnings Conference Call October 29, 2019 8:30 AM ET Company Participants Danielle McCoy - IR Ed Rosenfeld - Chairman and CEO Conference Call Participants Sam Poser - Susquehanna Matt Degulis - KeyBanc Capital Markets Janine Stichter - Jefferies Paul Lejuez - Citigroup Susan Anderson - B. Riley FBR Erinn Murphy - Piper Jaffray Chris Svezia - Wedbush Steve Marotta - CL King & Associates Laura Champine - Loop Capital Operator Ladies and gentlemen, thank you for standi ...

Steven Madden, Ltd. (NASDAQ:SHOO) Q2 2019 Results Conference Call July 30, 2019 8:30 AM ET Operator Company Participants | --- | |---------------------------------------------------------------------| | | | Danielle McCoy - Investor Relations Ed Rosenfeld - Chairman and CEO | | Conference Call Participants | | Erinn Murphy - Piper Jaffray | | Matt Degulis - KeyBanc Capital Markets | | Luke Hatton - B. Riley FBR | | Janine Stichter - Jefferies | | Sam Poser - Susquehanna | | Laura Champine - Loop Capital | | ...

Financial Data and Key Metrics Changes - The company reported a net sales growth of 5.6% to $410.9 million compared to $389 million in the prior year [16] - Diluted EPS increased by 15% to $0.42 per share from $0.36 per share in the first quarter of 2018 [22] - Consolidated gross margin improved by 200 basis points to 38.2% from 36.2% in the prior year [20] Business Line Data and Key Metrics Changes - Wholesale footwear net sales increased by 0.6% to $276.6 million, driven by strong growth in the core Steve Madden brand and the addition of Anne Klein [16] - Wholesale accessories saw a significant net sales growth of 27.5% to $71.5 million, with standout performances from Steve Madden handbags and private label handbags [17] - Retail segment net sales increased by 8.6% to $62.8 million, with comparable store sales rising by 6.3% [18] Market Data and Key Metrics Changes - The company experienced strong performance in e-commerce, marking the fourth consecutive quarter of sequential acceleration in sales and profitability [12] - International markets are expected to see double-digit percentage sales growth, driven by gains in SM Europe, SM Mexico, and a new joint venture in Israel [13] Company Strategy and Development Direction - The company is focused on leveraging its flagship brand's momentum and expanding newer brands like Anne Klein and Blondo [12] - There is an ongoing evaluation of opportunities to add to the brand portfolio through acquisition or licensing, particularly in the accessible luxury tier of the footwear market [15] - The company plans to continue enhancing its e-commerce capabilities and digital marketing strategies to drive further growth [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a choppy retail environment but expressed confidence in the company's positioning due to strong product performance and market share gains [12] - The company raised its 2019 net sales and EPS guidance, expecting net sales growth of 5% to 7% and diluted EPS in the range of $1.78 to $1.86 [26] - Management noted that while the loss of the Kate Spade footwear license is not expected to significantly impact profitability, they are optimistic about the potential for new brand additions [14][80] Other Important Information - The company ended the quarter with $221.6 million in cash and marketable securities and no debt [23] - Inventory increased by 22.1% to $115.3 million, with a significant portion attributed to replenishment programs [23] - The Board of Directors approved a quarterly cash dividend of $0.14 per share, payable on June 28, 2019 [25] Q&A Session Summary Question: Strength of the Steve Madden business at wholesale level - Management confirmed strong performance in the U.S. wholesale footwear business, with double-digit growth driven by effective product assortments [30][31] Question: E-commerce initiatives and their impact - Management highlighted the importance of the transition to Shopify, free 2-day shipping, and Afterpay in driving e-commerce growth [35] Question: Gross margin progression and Payless impact - Management expects modest gross margin improvement for the full year, with some benefits from not recognizing sales to Payless [37] Question: Private label business and margin comparison - Management indicated that the private label business is expected to grow, with better margins than the lost Payless business [41] Question: Performance of full-priced vs outlet stores - Full-priced stores were reported to be weaker than outlet stores [91] Question: Update on the China business - The joint venture in China has not met expectations and is currently not profitable, with management evaluating alternatives [92] Question: Sustainability of sneaker category growth - Management does not see signs of slowdown in the sneaker category and remains optimistic about its importance for the brand [94] Question: E-commerce sustainability and future initiatives - Management believes they are in the early stages of benefiting from digital initiatives, with more growth expected in e-commerce [96]

Financial Data and Key Metrics Changes - The company reported a 13% increase in net sales for Q4 2018, with diluted EPS rising by 31% compared to the prior year [9] - For the full year 2018, net sales grew by 7% to $1.65 billion, and net income increased by 22% to $157.7 million [10][44] - Consolidated gross margin decreased by 100 basis points to 37.1% in Q4 2018 compared to 38.1% in the prior year [40] Business Line Data and Key Metrics Changes - In the wholesale footwear segment, net sales increased by 7.4% to $233.9 million, driven by growth in Steve Madden Women's and Blondo [36][37] - The wholesale accessories segment saw a significant increase of 37.9% in net sales to $83.4 million, benefiting from strong growth in Steve Madden handbags and private label handbags [38][22] - Retail segment net sales increased by 7.9% to $93 million, with same-store sales rising by 4% [39] Market Data and Key Metrics Changes - International net sales increased by 22% in 2018, with strong growth in owned markets like Canada and Mexico, and over 40% growth in the SM Europe joint venture [14][101] - The company transitioned another key market, Israel, from a distributor model to a joint venture, aiming to expand its presence and productivity in that market [15][16] Company Strategy and Development Direction - The company aims to continue growing its international business and sees it as a top priority for 2019 and beyond [16] - New brand additions like Anne Klein and Blondo are expected to drive growth, with Anne Klein projected to achieve $80 million to $90 million in net sales in its first year [20][21] - The company is focusing on enhancing its e-commerce capabilities and has migrated its sites to the Shopify Plus platform to improve operational efficiency [26][110] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying strength of the business despite facing headwinds from the Payless bankruptcy and a higher tax rate [30][35] - The company anticipates a net sales growth of 4% to 6% for 2019, with diluted EPS guidance reflecting a negative impact from the Payless bankruptcy and higher tax rates [49] - Management noted that while the Payless bankruptcy poses challenges, they are well-positioned to capture market share from competitors [55][66] Other Important Information - The company repurchased approximately 3.4 million shares for $106 million in 2018 and initiated a quarterly cash dividend of $0.14 per share [28][48] - The company is managing tariff impacts by moving production out of China and negotiating price concessions with factory partners [94] Q&A Session Summary Question: Impact of Payless bankruptcy on business - Management acknowledged the negative headwinds from losing Payless as a customer but is actively engaging with Walmart and Target to capture market share [55][56] Question: Retail store count increase - The increase in store count was primarily due to the consummation of the Israel joint venture, adding 14 stores [77] Question: International growth expectations - International growth is expected to moderate but remain a double-digit grower, with strong performance anticipated from the SM Europe joint venture and the new Israel joint venture [100] Question: E-commerce growth and initiatives - The e-commerce business is accelerating, with significant improvements expected from the transition to Shopify Plus and new marketing initiatives [110] Question: Tariff impact on EPS - Management indicated that the impact of the 10% tariff has been largely mitigated, but a potential increase to 25% would pose a different challenge [95]