Core Viewpoint - Steven Madden, Ltd. is set to release its second quarter 2025 earnings results on July 30, 2025, with a conference call scheduled for 8:30 a.m. Eastern Time to discuss the results [1]. Company Overview - Steven Madden, Ltd. is a prominent designer and marketer of fashion-forward footwear, accessories, and apparel, operating under various brands including Steve Madden, Kurt Geiger London, and Dolce Vita [4]. - The company engages in wholesale distribution through department stores, mass merchants, and online retailers, while also operating its own retail stores and e-commerce platforms [4]. - Additionally, Steven Madden licenses certain brands for marketing and sales in apparel, accessory, and home categories [4].

Core Insights - The article emphasizes the importance of taking proactive steps towards career advancement by starting a business rather than waiting for promotions that may not materialize [1]. Group 1 - The quote from Sallie Krawcheck suggests that individuals should focus on creating their own opportunities instead of relying on traditional career paths [1].

Summary of Key Points Core Viewpoint - Numerous companies are lowering their profit forecasts for 2025 due to the impact of tariffs and economic uncertainty, indicating a broader trend of caution across various industries. Group 1: Retail Sector - Abercrombie & Fitch lowered its full-year profit forecast for 2025, citing a $50 million hit from tariffs, including a 30% tariff on imports from China and a 10% tariff on other imports [1][2] - Macy's also reduced its earnings per share outlook for the year, attributing it to tariffs, moderation in consumer spending, and increased competition [3] - Target expects sales to decline throughout 2025, previously projecting a 1% growth, due to weaker spending linked to tariff uncertainties [3] Group 2: Consumer Goods and Food & Beverage - Diageo warned of a $150 million hit to annual profits in 2025 but plans to offset half of this impact through unspecified actions [4] - PepsiCo lowered its earnings forecast for 2025, facing higher supply chain costs due to tariffs and a volatile consumer environment [15] - Kraft Heinz also lowered its outlook, citing a volatile operating environment influenced by tariffs and inflation [13] Group 3: Automotive Industry - Ford expects tariffs to reduce its earnings before interest and taxes by about $1.5 billion in 2025 and has suspended its full-year guidance [8] - General Motors lowered its earnings forecast to between $10 billion and $12.5 billion, down from $13.7 billion to $15.7 billion, due to the impact of tariffs [12] - Toyota estimated a $1.25 billion profit loss in April and March due to U.S. tariffs, forecasting a nearly 21% dip in operating income through 2025 [5] Group 4: Technology and Electronics - AMD anticipates a $1.5 billion revenue loss in 2025 due to restrictions on chip shipments to China [7] - Apple expects a $900 million hit to its bottom line in the second quarter due to tariffs, complicating future predictions [10] - Logitech withdrew its outlook for the 2026 fiscal year due to ongoing tariff uncertainties [17] Group 5: Airlines and Transportation - JetBlue and Alaska Airlines both pulled their full-year guidance for 2025 due to macroeconomic uncertainty [13][17] - Delta Airlines withdrew its full-year guidance, citing broad macro uncertainty [18] - United Airlines issued a second guidance featuring significantly lower earnings for 2025, reflecting the unpredictable economic environment [17] Group 6: Miscellaneous - Steve Madden withdrew its financial guidance for 2025, facing heightened uncertainty from new tariffs [6] - Rivian lowered its targets for vehicle deliveries and capital spending for 2025 due to significant uncertainty in the global economic landscape [6] - Snap declined to issue guidance for its second quarter, citing uncertainty in macroeconomic conditions affecting advertising demand [14]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements detail the company's financial position, operations, and cash flows for Q1 2025, showing total assets of **$1.43 billion** and a **net income decrease to $40.4 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $144,762 | $189,924 | | Inventories | $238,641 | $257,625 | | Total current assets | $886,013 | $894,695 | | Total Assets | $1,427,201 | $1,411,771 | | Total current liabilities | $394,554 | $413,721 | | Total Liabilities | $523,525 | $535,774 | | Total stockholders' equity | $903,676 | $875,997 | Condensed Consolidated Statement of Income Highlights (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenue | $553,534 | $552,381 | | Gross profit | $226,267 | $224,815 | | Income from operations | $53,499 | $56,746 | | Net income attributable to Steven Madden, Ltd. | $40,423 | $43,934 | | Diluted net income per share | $0.57 | $0.60 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,832) | ($15,705) | | Net cash used in investing activities | ($1,005) | ($4,618) | | Net cash used in financing activities | ($25,902) | ($52,531) | | Net decrease in cash and cash equivalents | ($45,162) | ($73,139) | [Note 3 – Joint Ventures and Acquisitions](index=8&type=section&id=Note%203%20%E2%80%93%20Joint%20Ventures%20and%20Acquisitions) The company expanded its distribution in Q1 2025 by forming a new joint venture in Australia and gaining control of its Malaysia joint venture, alongside a March 2024 hosiery business acquisition - In January 2025, the Company formed a joint venture in Australia by acquiring a **50.1% controlling interest** in SM Fashion Australia Pty Ltd. for a capital contribution of **$1,899**, resulting in **$1,393 of goodwill**[21](index=21&type=chunk) - In January 2025, the Company increased its equity interest in its Malaysia joint venture to **51.0% for $5**, gaining a controlling financial interest and consolidating its results, which resulted in **goodwill of $1,829**[22](index=22&type=chunk) - In March 2024, the Company acquired the Steve Madden and Betsey Johnson hosiery business from Gina Group LLC for **$4,259 in cash**, including inventories, reacquired rights, and goodwill[23](index=23&type=chunk) [Note 7 – Share Repurchase Program](index=12&type=section&id=Note%207%20%E2%80%93%20Share%20Repurchase%20Program) No shares were repurchased under the Share Repurchase Program in Q1 2025, with **$85.3 million** remaining available, though shares were withheld for employee tax obligations - No shares were repurchased under the Share Repurchase Program during the three months ended March 31, 2025[37](index=37&type=chunk) - During the three months ended March 31, 2024, the company repurchased **773,000 shares** for approximately **$32.6 million**[37](index=37&type=chunk) - As of March 31, 2025, approximately **$85.31 million** remained available for future repurchases under the program[37](index=37&type=chunk) - In Q1 2025, **201,000 shares** were withheld to satisfy employee tax-withholding requirements on vested restricted stock, at an aggregate price of approximately **$7.8 million**[38](index=38&type=chunk) [Note 14 – Operating Segment Information](index=20&type=section&id=Note%2014%20%E2%80%93%20Operating%20Segment%20Information) In Q1 2025, Wholesale Footwear led revenue and operating income, while Wholesale Accessories/Apparel saw increased operating income, and Direct-to-Consumer reported a wider operating loss Segment Revenue (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Wholesale Footwear | $296,145 | $295,660 | | Wholesale Accessories/Apparel | $143,173 | $142,576 | | Direct-to-Consumer | $112,064 | $112,331 | | Licensing | $2,152 | $1,814 | | **Total** | **$553,534** | **$552,381** | Segment Income/(Loss) from Operations (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Wholesale Footwear | $63,088 | $63,115 | | Wholesale Accessories/Apparel | $22,412 | $18,171 | | Direct-to-Consumer | ($6,228) | ($2,225) | | Licensing | $1,825 | $1,314 | - Total revenue from international operations increased to **$102.8 million** in Q1 2025 from **$97.6 million** in Q1 2024[72](index=72&type=chunk) [Note 18 – Subsequent Event](index=25&type=section&id=Note%2018%20%E2%80%93%20Subsequent%20Event) Post-quarter, on May 6, 2025, the company acquired Kurt Geiger for approximately **£289 million**, funded by a new **$300 million** term loan and **$250 million** revolving credit facility - On May 6, 2025, the Company completed the acquisition of Kurt Geiger for an enterprise value of approximately **£289 million**[90](index=90&type=chunk)[92](index=92&type=chunk) - The acquisition was funded with borrowings under a new Amended and Restated Credit Agreement and cash on hand[94](index=94&type=chunk)[95](index=95&type=chunk) - The new credit agreement provides for a **$300 million** term loan facility and a **$250 million** revolving credit facility, maturing on May 6, 2030[95](index=95&type=chunk)[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, noting a **0.2% revenue increase** to **$553.5 million**, improved gross margin, but decreased operating income and diluted EPS due to higher expenses and macroeconomic challenges - Key strategic initiatives include winning with product, investing in marketing, expanding internationally, growing non-footwear categories, and expanding the direct-to-consumer business led by digital[114](index=114&type=chunk) Q1 2025 Key Financial Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $553,534 | $552,381 | +0.2% | | Net Income (attributable to SHOO) | $40,423 | $43,934 | -8.0% | | Diluted EPS | $0.57 | $0.60 | -5.0% | - The company is navigating macroeconomic challenges including new tariffs across key sourcing jurisdictions, elevated inflation, high interest rates, and geopolitical instability[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - On May 6, 2025, the company acquired Kurt Geiger and entered into a new credit agreement with a **$300 million** term loan and a **$250 million** revolving credit facility to fund the transaction[109](index=109&type=chunk)[147](index=147&type=chunk)[150](index=150&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 saw a **0.2% consolidated revenue increase**, with wholesale segments showing growth and margin expansion, while Direct-to-Consumer experienced a wider operating loss due to lower gross margin and higher expenses - Consolidated gross margin increased to **40.9%** from **40.7%**, driven by margin expansion in both wholesale segments[124](index=124&type=chunk) - Operating expenses increased to **32.0% of revenue** from **29.8%**, due to investments in marketing, higher IT expenses, acquisition costs (**$3.2 million**), severance (**$2.4 million**), and legal settlements (**$1.2 million**)[125](index=125&type=chunk) - Wholesale Accessories/Apparel operating income grew to **$22.4 million** from **$18.2 million**, aided by a **$4.5 million** benefit from a change in valuation of contingent payment liabilities[135](index=135&type=chunk)[136](index=136&type=chunk) - Direct-to-Consumer operating loss widened to **$6.2 million** from **$2.2 million**, driven by lower gross margin and higher operating expenses, including marketing and occupancy costs[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained **$147.2 million** in cash with no debt, and subsequently funded the Kurt Geiger acquisition via a new **$300 million** term loan and **$250 million** revolving credit facility - Cash, cash equivalents, and short-term investments totaled **$147.2 million** at March 31, 2025, down from **$203.4 million** at December 31, 2024[143](index=143&type=chunk) - Cash used in operating activities was **$18.8 million** for the quarter, an increase from **$15.7 million** in the prior-year period, primarily due to a decline in net income[152](index=152&type=chunk) - Cash used in financing activities was **$25.9 million**, mainly for dividends (**$15.2 million**) and net settlements of stock awards (**$7.8 million**)[154](index=154&type=chunk) - Subsequent to quarter-end, the company entered into a new credit agreement with a **$300 million** term loan and a **$250 million** revolving facility to finance the Kurt Geiger acquisition[150](index=150&type=chunk)[157](index=157&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from interest rates, foreign currency, and inflation, with minimal interest rate exposure and **$282.1 million** in forward exchange contracts to mitigate currency risk - Interest rate risk is low as the company had no cash borrowings under its credit facility as of March 31, 2025[162](index=162&type=chunk) - The company uses forward foreign exchange contracts to mitigate currency risk on inventory purchases, with a notional amount of **$282.1 million** as of March 31, 2025[164](index=164&type=chunk)[165](index=165&type=chunk) - The company is exposed to translation risk from its foreign subsidiaries and joint ventures, as their financial results are translated into U.S. dollars for reporting[166](index=166&type=chunk) - Inflationary factors can reduce consumer spending and increase costs; the company attempts to mitigate these impacts through price adjustments, cost negotiations, and operational efficiencies[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated disclosure controls and procedures and concluded they were effective as of March 31, 2025[169](index=169&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[170](index=170&type=chunk) [PART II – OTHER INFORMATION](index=39&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal proceedings, which management does not expect to materially impact its financial condition or results - The company is involved in various legal matters including contractual disputes, employment matters, and intellectual property infringement[173](index=173&type=chunk) - Management does not expect these legal proceedings to have a material impact on the company's financial condition or results[173](index=173&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) A material risk factor is the potential imposition of additional tariffs on imported goods, which could significantly increase costs, reduce margins, and lower consumer demand - A key risk is the imposition of additional tariffs on products imported to the U.S. and retaliatory trade actions, which could materially increase costs and reduce margins[175](index=175&type=chunk) - A substantial amount of products are sourced from China, Vietnam, Cambodia, and other Asian countries impacted by reciprocal tariffs[175](index=175&type=chunk) - The company is analyzing mitigation strategies like diversifying sourcing, negotiating with suppliers, and adjusting pricing, but their success is not guaranteed[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, no shares were repurchased under the Share Repurchase Program, but **201,000 shares** worth **$7.8 million** were withheld for employee tax obligations, with **$85.3 million** remaining for future repurchases Issuer Purchases of Equity Securities (Q1 2025, in thousands) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 121,000 | $41.95 | 0 | $85,310,000 | | Feb 2025 | 16,000 | $37.57 | 0 | $85,310,000 | | Mar 2025 | 64,000 | $32.49 | 0 | $85,310,000 | | **Total** | **201,000** | **$38.58** | **0** | **$85,310,000** | - No shares were repurchased under the Share Repurchase Program in Q1 2025. The **201,000 shares** purchased represent shares withheld to satisfy employee tax obligations on vested stock awards[180](index=180&type=chunk) [Item 5. Other Information](index=40&type=section&id=ITEM%205.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or other trading arrangements during Q1 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading plan or other non-Rule 10b5-1 trading arrangement during Q1 2025[181](index=181&type=chunk) [Item 6. Exhibits](index=41&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Kurt Geiger acquisition deed, CEO/CFO certifications, and iXBRL data files - Lists exhibits filed with the Form 10-Q, including CEO/CFO certifications (**31.1, 31.2, 32.1, 32.2**) and iXBRL data files (**101, 104**)[182](index=182&type=chunk)

Core Viewpoint - Steven Madden Ltd (SHOO) reported a significant earnings beat but withdrew its full-year guidance due to tariff-related uncertainties [1][2] Company Performance - Analyst Dana Telsey maintained a Market Perform rating with a price target of $24 [1] - Shares of Steven Madden rose by 2% to $23.90 at the time of publication [3] Strategic Initiatives - The company completed the acquisition of Kurt Geiger, enhancing its product offerings towards higher-end handbags [1] - Management withdrew its 2025 guidance due to uncertainties associated with tariffs, particularly given the company's sourcing exposure to China [2] Tariff Mitigation Strategy - Steven Madden plans a three-pronged tariff mitigation strategy, which includes: - Moving production out of China [4] - Negotiating with suppliers for price concessions [4] - Taking price on products [4] - These changes are expected to position the company for long-term growth [2]

Core Insights - Steven Madden, Ltd. (SHOO) reported first-quarter 2025 results with total revenues increasing but earnings decreasing compared to the previous year [1][4] - The company experienced strong execution of strategic initiatives despite challenges from new tariffs on U.S. imports [2] - SHOO has withdrawn its 2025 financial guidance amid macroeconomic uncertainty [3] Financial Performance - Adjusted quarterly earnings were 60 cents per share, surpassing the Zacks Consensus Estimate of 46 cents, but down 7.7% from 65 cents in the prior-year period [4] - Total revenues rose 0.2% year over year to $553.5 million, missing the consensus estimate of $562 million [4] - Adjusted gross profit increased 0.7% year over year to $226.5 million, but also missed the estimate of $226.9 million [5] Segment Performance - The wholesale business generated revenues of $439.3 million, a 0.2% increase from the first quarter of 2024, but below the estimate of $440.9 million [7] - Direct-to-consumer (DTC) revenues decreased 0.2% to $112.1 million, falling short of the expected $121.4 million [8] Strategic Initiatives - The acquisition of Kurt Geiger for approximately £289 million is seen as a key growth driver, aligning with SHOO's strategic goals in international expansion and DTC channels [2][12] - The company ended the quarter with cash and cash equivalents of $144.8 million and did not repurchase any shares in the open market [10] Dividend Announcement - SHOO announced a cash dividend of 21 cents per share, payable on June 20, 2025, to shareholders of record as of June 9 [11]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $553.5 million, a 0.2% increase compared to Q1 2024 [15] - Net income attributable to Steve Madden Limited for the quarter was $42.4 million, or $0.60 per diluted share, compared to $47 million, or $0.65 per diluted share in Q1 2024 [18] - Operating income for the quarter was $56.1 million, or 10.1% of revenue, compared to $61 million, or 11% of revenue in the comparable period in the prior year [17] Business Line Data and Key Metrics Changes - Wholesale revenue was $439.3 million, up 0.2% compared to Q1 2024, with wholesale footwear revenue at $296.1 million, a 0.2% increase [15] - Direct to consumer segment revenue declined 0.2% to $112.1 million, with a modest increase in digital business offset by a decline in brick and mortar [16] - Licensing royalty income was $2.2 million in the quarter, compared to $1.8 million in Q1 2024 [16] Market Data and Key Metrics Changes - The company expects to reduce production sourced from China to the mid-teens for fall 2025 and to the mid-single digits by spring 2026 [9] - The effective tax rate for the quarter was 24%, compared to 23.6% in Q1 2024 [18] Company Strategy and Development Direction - The acquisition of Kurt Geiger was highlighted as a significant investment, with an enterprise value of £289 million [11] - The company is focusing on shifting production out of China to countries like Vietnam, Cambodia, Mexico, and Brazil to mitigate tariff impacts [9][26] - The company plans to continue investing in marketing and strategic initiatives to position for long-term growth despite short-term challenges [10] Management Comments on Operating Environment and Future Outlook - Management acknowledged meaningful headwinds and uncertainty due to new tariffs on goods imported into the U.S. [8] - The company is confident in its ability to navigate current disruptions and return to profitable growth in the future [12] - Management noted that consumer demand remains stable but is being monitored closely due to recent declines in consumer confidence [69] Other Important Information - The company withdrew its 2025 financial guidance due to uncertainty related to new tariffs [20] - The company ended the quarter with $147.2 million in cash and no debt [18] Q&A Session Summary Question: How is the company handling orders from China? - The company is taking the majority of production that was far along in the process and negotiating price concessions to mitigate damage [24] Question: What countries is the company moving production to? - Production is being moved to countries like Cambodia, Vietnam, Mexico, and Brazil, with a focus on improving speed and reducing tariff risks [26] Question: What is the impact of tariffs on margins? - The company is accepting lower margins when moving production to other countries and is experiencing price pressure due to increased demand [31] Question: How is the company managing inventory levels? - Inventory is up 18%, primarily due to longer lead times and the decision to accelerate certain shipments ahead of tariff announcements [19][46] Question: What is the outlook for the handbag category? - The company expects continued pressure in the handbag category due to excess inventory and tariff disruptions [91] Question: What are the expectations for the Kirk Geiger acquisition? - The company is looking at a more conservative revenue expectation for both the existing business and Kirk Geiger due to current market conditions [102]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $553.5 million, a 0.2% increase compared to Q1 2024 [13] - Net income attributable to the company was $42.4 million or $0.60 per diluted share, down from $47 million or $0.65 per diluted share in Q1 2024 [17] - Operating income for the quarter was $56.1 million or 10.1% of revenue, compared to $61 million or 11% of revenue in the prior year [16] Business Line Data and Key Metrics Changes - Wholesale revenue was $439.3 million, up 0.2% compared to Q1 2024, with wholesale footwear revenue at $296.1 million, also a 0.2% increase [13][14] - Direct to consumer segment revenue declined 0.2% to $112.1 million, with a modest increase in digital sales offset by a decline in brick-and-mortar [15] - Licensing royalty income increased to $2.2 million from $1.8 million in Q1 2024 [15] Market Data and Key Metrics Changes - The company sourced 71% of US imports from China in 2024, expected to drop to mid-teens for fall 2025 and mid-single digits by spring 2026 [8] - Inventory was $238.6 million, significantly higher than $200 million in Q1 2024, driven by longer lead times and accelerated shipments [18] Company Strategy and Development Direction - The acquisition of Kurt Geiger was highlighted as a significant investment, with an enterprise value of £289 million and expected to enhance growth in international markets and accessories [10] - The company is shifting production out of China to countries like Vietnam, Cambodia, Mexico, and Brazil to mitigate tariff impacts and improve operational efficiency [7][26] - The company plans to selectively raise prices to offset increased costs, with an average increase around 10% [50] Management Comments on Operating Environment and Future Outlook - Management acknowledged meaningful headwinds due to new tariffs but expressed confidence in the company's agility and strong balance sheet to navigate challenges [11] - The company is withdrawing its 2025 financial guidance due to uncertainty related to tariffs [19] - Management noted that consumer demand remains stable but is being monitored closely due to declining consumer confidence [68] Other Important Information - The company completed a reduction in force resulting in over $12 million in annual savings [9] - The effective tax rate for the quarter was 24%, slightly up from 23.6% in Q1 2024 [17] Q&A Session Summary Question: How is the company handling orders from China? - The company is taking most production that is far along but has negotiated price concessions to mitigate damage and keep goods flowing [24] Question: What is the impact of moving production to other countries? - The company is replacing production in other countries and expects to see a revenue impact due to cancellations and delayed deliveries [28] Question: How are gross margins expected to trend? - Gross margins were better than anticipated in Q1, but significant impacts from tariffs are expected in Q2 [38] Question: What is the strategy for mitigating tariffs? - The company is moving production out of China, negotiating factory cost concessions, and raising prices [101] Question: What are the expectations for the Kirk Geiger acquisition? - The company expects a more conservative revenue outlook for both the existing business and Kirk Geiger due to current market conditions [102] Question: How is consumer behavior changing in response to price increases? - Consumer demand is holding steady, but management is cautious about potential impacts from rising prices [68]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $553.5 million, a 0.2% increase compared to Q1 2024 [13] - Net income attributable to Steve Madden Limited was $42.4 million, or $0.60 per diluted share, compared to $47 million, or $0.65 per diluted share in Q1 2024 [17] - Consolidated gross margin increased to 40.9% from 40.7% in the comparable period of 2024 [15] - Operating income for the quarter was $56.1 million, or 10.1% of revenue, down from $61 million, or 11% of revenue in the prior year [16] Business Line Data and Key Metrics Changes - Wholesale revenue was $439.3 million, up 0.2% compared to Q1 2024, with wholesale footwear revenue at $296.1 million, also a 0.2% increase [13] - Direct to consumer segment revenue declined 0.2% to $112.1 million, with a modest increase in digital sales offset by a decline in brick-and-mortar [14] - Licensing royalty income increased to $2.2 million from $1.8 million in Q1 2024 [14] Market Data and Key Metrics Changes - The company expects to reduce production sourced from China to the mid-teens for fall 2025 and to the mid-single digits by spring 2026 [7] - The company has begun selectively raising prices to consumers and wholesale customers, with an average increase around 10% [49] Company Strategy and Development Direction - The acquisition of Kurt Geiger was highlighted as a significant investment, with the brand showing strong momentum and alignment with the company's strategic initiatives [10] - The company is focusing on diversifying production out of China to mitigate tariff impacts and has successfully negotiated discounts on products from China [6][9] - The company aims to leverage its strong balance sheet and marketing investments to navigate current challenges and capture market share [9][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged meaningful headwinds due to new tariffs but expressed confidence in the company's ability to adapt and grow [6][11] - The company has withdrawn its 2025 financial guidance due to uncertainty related to tariffs [19] - Management noted that consumer demand remains stable but is being monitored closely due to declining consumer confidence [66] Other Important Information - The company completed a reduction in force that will result in over $12 million in annual savings [9] - Inventory increased to $238.6 million, driven by longer lead times and diversification efforts [18] Q&A Session Summary Question: How is the company handling orders from China? - The company is taking most production that is far along but has negotiated price concessions to mitigate damage [23] Question: What countries is the company moving production to? - Production is being shifted to countries like Cambodia, Vietnam, Mexico, and Brazil, with a focus on Mexico and Brazil for improved speed [26] Question: What is the impact of tariffs on margins? - The company is accepting lower margins when moving production to other countries and is experiencing price pressure due to increased demand [30] Question: How is the company managing inventory growth? - Inventory growth is primarily due to longer lead times and diversification efforts, with confidence in inventory health for Q2 [45] Question: What is the company's strategy regarding price increases? - The company is raising prices selectively, with an average increase around 10%, while monitoring demand elasticity [49] Question: What is the outlook for the handbag category? - The company expects continued pressure in the handbag category due to excess inventory in the channel [87] Question: How is the company addressing private label versus branded performance? - The branded business performed better in Q1, with a focus on growing the international business due to tariff impacts [80]

Company Performance - Steven Madden reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.65 per share a year ago, representing an earnings surprise of 30.43% [1] - The company posted revenues of $553.53 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.50%, and showing a slight increase from $552.38 million year-over-year [2] - Over the last four quarters, Steven Madden has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Steven Madden shares have declined approximately 52.7% since the beginning of the year, in contrast to the S&P 500's decline of 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $607.61 million, and for the current fiscal year, it is $2.06 on revenues of $2.66 billion [7] Industry Outlook - The Shoes and Retail Apparel industry, to which Steven Madden belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, indicating potential challenges ahead [8] - The outlook for the industry can significantly impact the performance of Steven Madden's stock, as empirical research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]