1 n t i 1 t ablokhin Steven Madden, Ltd. (NASDAQ:SHOO), the shoe company operating under the Steve Madden, Dolce Vita, and other brands, reported the company's Q2 results in July. More recently, in August, the company also announced business transactions with UCG, where Steven Madden sells its GREATS business but becomes a shareholder of UCG. In my previous article on the stock, "Steven Madden: Growing Profitably With Increased Marketing And 2023 Acquisition," I initiated Steven Madden at a Hold rating as t ...

The Consumer Discretionary group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Steven Madden (SHOO) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out. Steven Madden is one of 280 companies in the Consumer Discretionary group. The Consumer Discretionary group currently sits at #10 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in o ...

Core Viewpoint - Steven Madden reported better-than-expected Q2 2024 earnings and revenues, surpassing estimates and showing year-over-year growth [2][3]. Financial Performance - Adjusted quarterly earnings were 57 cents per share, beating the Zacks Consensus Estimate of 51 cents, and increased by 21.3% from 47 cents in the prior year [3]. - Total revenues rose 17.6% year over year to $523.6 million, exceeding the consensus estimate of $507 million [3]. - Adjusted gross profit increased 14.4% year over year to $217.3 million, with an adjusted gross margin contracting by 110 basis points to 41.5% [4]. - Adjusted operating expenses rose 12% year over year to $162.8 million, but as a percentage of revenues, they declined by 150 basis points to 31.1% [5]. - Adjusted operating income was $54.5 million, up 22.4% from the same quarter a year ago, with an adjusted operating margin increasing by 40 basis points to 10.4% [5]. Segment Performance - Wholesale revenues improved by 22.5% year over year to $385.3 million, with wholesale accessories/apparel revenues growing by 86% [6]. - Direct-to-consumer (DTC) revenues increased by 6.4% year over year to $136.4 million [6]. Company Outlook - For 2024, the company anticipates an 11-13% increase in revenues compared to 2023, with adjusted earnings projected at $2.55-$2.65 per share [9]. - The company ended Q2 with cash and cash equivalents of $180.5 million and stockholders' equity of $808.3 million [8]. Market Position - Steven Madden has a Zacks Rank 2 (Buy) and an aggregate VGM Score of B, indicating potential for above-average returns in the coming months [12][11].

Core Insights - Steven Madden, Ltd. (SHOO) has seen a significant stock price increase of 31.1% over the past year, outperforming the Zacks Shoes and Retail Apparel industry's decline of 11.9% [1] - The company's strategic focus on direct-to-consumer growth, digital capabilities, and product diversification has contributed to its success, with a notable revenue increase in various segments [5][6] Financial Performance - The wholesale business reported a 22.5% year-over-year revenue increase to $385.3 million in the second quarter, with wholesale accessories and apparel revenues surging by 86% [6] - The direct-to-consumer segment also showed resilience, with revenues growing 6.4% year over year to $136.4 million, driven by strong product assortments and disciplined inventory management [7] - International revenues grew 13% year over year in the second quarter, with expectations for EMEA revenues to grow more than 20% in 2024 [8] Valuation and Technical Indicators - Steven Madden's shares are trading at a forward 12-month price-to-sales ratio of 1.39, below the five-year median of 1.41 and the industry's average of 2.23, indicating attractive valuation [4] - The stock is trading above both its 50-day and 100-day moving averages, suggesting strong upward momentum and price stability [3] Strategic Initiatives - The acquisition of Almost Famous has enhanced the company's apparel offerings, contributing to its growth trajectory [5] - The company is focused on expanding its international footprint, viewing it as a critical long-term growth opportunity [8] Future Outlook - The company anticipates 2024 revenues to increase in the range of 11-13% from 2023, with adjusted earnings per share projected between $2.55 and $2.65 [11] - Analysts project 2024 sales and EPS at $2.22 billion and $2.62, respectively, indicating year-over-year growth of 12.3% and 6.9% [12]

Core Insights - Unified Commerce Group (UCG) has expanded its portfolio by acquiring substantially all assets of GREATS Inc., a premium sneaker brand, and making a strategic investment in Utah-based womenswear retailer Böhme [1][3][4] Company Overview - Unified Commerce Group was founded in 2019 to enable purpose-driven lifestyle brands to scale through shared services, focusing on data-driven customer insights and operational excellence [2][6] - GREATS is recognized as a pioneer in the direct-to-consumer footwear model and is known for its high-quality, fashionable sneakers [4][5] - Böhme, founded in 2006, has become a popular womenswear retailer in the Mountain West with 14 stores across several states and a successful online presence [7] Strategic Implications - The acquisition of GREATS marks the third brand in UCG's portfolio, joining Frank And Oak and Spiritual Gangster, enhancing UCG's operational support and strategic capabilities [2][4] - UCG's shared services platform, UCG Hub, now supports four brands, each with growing direct-to-consumer eCommerce businesses and a combined footprint of over 30 retail stores and more than 200 wholesale partners [4]

Core Insights - Steven Madden, Ltd. has established a strong foundation for success through strategic initiatives focused on diversification, digital growth, and international expansion [1] - The company has demonstrated solid financial performance in Q2 2024, indicating its ability to navigate challenges and seize growth opportunities [1] Financial Performance - The stock has outperformed the Zacks Shoes and Retail Apparel industry, with shares rising 21.4% compared to the industry's 27% decline over the past year [2] - The Zacks Consensus Estimate for 2024 sales is $2.22 billion, reflecting a year-over-year growth of 12.3%, while EPS is estimated at $2.62, indicating a growth of 6.9% [3] - For 2025, sales are projected at $2.33 billion, with an expected growth of 4.7%, and EPS is estimated at $2.93, implying an 11.7% growth [3] Business Segments - The wholesale business saw revenues increase by 22.5% year over year to $385.3 million in Q2, with wholesale accessories and apparel revenues surging by 86% [4] - Excluding the Almost Famous acquisition, wholesale revenues grew by 8.2%, with accessories and apparel revenues increasing by 29.8% [4] - The direct-to-consumer (DTC) segment also showed resilience, with revenues rising 6.4% year over year to $136.4 million, driven by strong product assortments and disciplined inventory management [5] International Expansion - Steven Madden is aggressively expanding its international footprint, with international revenues growing 13% year over year in Q2, particularly strong in the EMEA region [6] - The company anticipates EMEA revenues to grow more than 20% in 2024 [6] Future Outlook - For 2024, the company expects an 11-13% increase in revenues from 2023, with adjusted earnings projected between $2.55 and $2.65 per share, up from $2.30 in 2023 [6] - The recovery in the U.S. wholesale footwear business is seen as a positive sign for inventory normalization and improved relationships with key retail partners [6] Strategic Positioning - Steven Madden's strong performance in both wholesale and DTC businesses, along with successful acquisitions like Almost Famous, highlights its adaptability in a competitive market [7] - The company is well-positioned to capitalize on growth opportunities and enhance its market presence both domestically and internationally [7]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $523.6 million, a 17.6% increase compared to Q2 2023, with adjusted diluted EPS rising 23% [4][12] - Consolidated gross margin was 41.5%, down from 42.6% in the same period last year, while direct-to-consumer gross margin increased to 64.3%, up 60 basis points year-over-year [14][15] - Operating income for the quarter was $54.5 million, or 10.4% of revenue, up from $44.5 million or 10% of revenue in the prior year [15] Business Line Data and Key Metrics Changes - Accessories and apparel revenue rose 74%, or 27% excluding the newly acquired Almost Famous business, with handbag revenue increasing more than 30% [7][12] - Direct-to-consumer revenue grew 6%, including a 4% increase on a comparable basis, with brick-and-mortar comp growth at 7% and digital at 1% [8][13] - Wholesale revenue was $385.3 million, up 22.5% compared to Q2 2023, with wholesale accessories and apparel revenue up 86% [12] Market Data and Key Metrics Changes - International revenue grew 13% in Q2, with the EMEA region expected to see over 20% growth in 2024 [5][6] - The Americas region saw a rebound in Canada and continued strong momentum in Mexico, with expectations for double-digit revenue growth [6] Company Strategy and Development Direction - The company aims to expand its international business, grow outside of footwear, and strengthen its direct-to-consumer channels [5][9] - The strategy includes diversifying revenue sources, reducing reliance on U.S. wholesale footwear, which is expected to account for less than 40% of overall business in 2024 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting financial goals for 2024 despite a challenging operating environment, with expectations for revenue growth of 11% to 13% [10][16] - The company is prepared to adapt to potential tariff increases by diversifying sourcing away from China [38][39] Other Important Information - The company has no debt and ended the quarter with $192.2 million in cash and equivalents [16] - A quarterly cash dividend of $0.21 per share was approved, payable on September 23, 2024 [16] Q&A Session Summary Question: Changes to revenue growth guidance composition - Management confirmed no changes to the revenue growth guidance composition, maintaining expectations for low-to-mid singles in wholesale and high singles in direct-to-consumer [18] Question: Organic growth rate in accessories and apparel - Management indicated a slowdown in growth for accessories and apparel in the back half of the year due to tougher comparisons [19] Question: Breakdown of direct-to-consumer revenue growth - Management clarified that brick-and-mortar comp growth was 7%, while digital was 1%, with overall DTC revenue growth at 6.4% [22][23] Question: Inventory levels in the wholesale channel - Management noted that inventory levels in the channel are reasonably controlled, with cautious sales forecasts from major wholesale customers [28] Question: Freight costs and impact on margins - Management stated that freight costs are expected to impact gross margins by about 40 basis points, with a heavier impact anticipated in the fall [32] Question: Performance of Almost Famous acquisition - Management reported that Almost Famous is tracking well, with revenue and profitability exceeding initial expectations [46] Question: Growth drivers in EMEA - Management highlighted strong growth in Continental Europe and the Middle East, with fashion sneakers and handbags being key products [48] Question: Boot business outlook for Q4 - Management expressed caution regarding the boot category, with conservative planning from wholesale customers [52] Question: Anticipated improvement in branded footwear - Management expects the branded wholesale footwear business to improve in the back half of the year, particularly in Q4 [56]

Core Viewpoint - Steven Madden, Ltd. (SHOO) reported better-than-expected second-quarter 2024 results, with revenues and earnings surpassing estimates and increasing year over year [1][4]. Financial Performance - Adjusted quarterly earnings were 57 cents per share, beating the Zacks Consensus Estimate of 51 cents, and increased 21.3% from 47 cents in the prior-year period [4]. - Total revenues rose 17.6% year over year to $523.6 million, with net revenues of $521.7 million increasing 17.8%, surpassing the consensus estimate of $507 million [4]. - Adjusted gross profit increased 14.4% year over year to $217.3 million, while the adjusted gross margin contracted 110 basis points to 41.5% [5]. - Adjusted operating expenses rose 12% year over year to $162.8 million, but as a percentage of revenues, they declined 150 basis points to 31.1% [6]. Segment Performance - Wholesale business revenues improved 22.5% year over year to $385.3 million, with wholesale accessories/apparel revenues growing 86% [7]. - Direct-to-consumer (DTC) revenues increased 6.4% year over year to $136.4 million [8]. Cash and Shareholder Returns - The company ended the quarter with cash and cash equivalents of $180.5 million and stockholders' equity of $808.3 million [9]. - SHOO repurchased $38.2 million of its common stock and declared a quarterly cash dividend of 21 cents per share [10]. Outlook - For 2024, the company anticipates an 11-13% increase in revenues from 2023, with adjusted earnings projected at $2.55-$2.65 per share, compared to $2.30 per share in 2023 [11].

Company Performance - Steven Madden reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, and up from $0.47 per share a year ago [3] - The company has surpassed consensus EPS estimates in all of the last four quarters [4] - The latest quarterly report showed an earnings surprise of 11.76%, with a previous quarter surprise of 16.07% [8] Revenue Insights - For the quarter ended June 2024, Steven Madden posted revenues of $523.55 million, surpassing the Zacks Consensus Estimate by 3.30%, compared to $442.84 million in the same quarter last year [15] - The upcoming quarterly earnings are expected to be $1.21 per share, reflecting a year-over-year change of +23.5% [7] - The current consensus EPS estimate for the next quarter is $0.92 on revenues of $608.14 million, and for the current fiscal year, it is $2.62 on revenues of $2.22 billion [11] Industry Context - The Shoes and Retail Apparel industry, where Steven Madden operates, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook [6] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [13]

Revenue and Growth - Revenue for the second quarter of 2024 increased 17.6% to $523.6 million, compared to $445.3 million in the same period of 2023[9] - Direct-to-consumer revenue was $136.4 million, a 6.4% increase compared to the second quarter of 2023[11] - The company expects revenue to increase by 11% to 13% for fiscal 2024 compared to 2023[14] - Total revenue for the three months ended June 30, 2024, was $523,553, up from $445,302 in the same period of 2023, reflecting a 17.6% growth[34] - The company’s net sales for the six months ended June 30, 2024, reached $1,072,276, compared to $904,574 for the same period in 2023, reflecting an 18.5% increase[34] Profitability - Gross profit as a percentage of revenue was 41.5%, down from 42.6% in the same period of 2023[9] - Net income attributable to Steven Madden, Ltd. was $35.4 million, or $0.49 per diluted share, compared to $34.5 million, or $0.46 per diluted share, in the same period of 2023[9] - Adjusted net income attributable to Steven Madden, Ltd. was $41.2 million, or $0.57 per diluted share, compared to $34.9 million, or $0.47 per diluted share, in the same period of 2023[9] - GAAP net income attributable to Steven Madden, Ltd. for the three months ended June 30, 2024, was $35,376, compared to $34,529 for the same period in 2023, representing a 2.5% increase[27] - Adjusted net income attributable to Steven Madden, Ltd. for the six months ended June 30, 2024, was $88,241, compared to $72,541 for the same period in 2023, showing a 21.5% increase[27] - GAAP diluted net income per share for the three months ended June 30, 2024, was $0.49, compared to $0.46 for the same period in 2023, a 6.5% increase[27] - Adjusted diluted net income per share for the six months ended June 30, 2024, was $1.22, up from $0.96 for the same period in 2023, representing a 27.1% increase[27] - The company expects GAAP diluted net income per share for 2024 to be between $2.43 and $2.53[27] Expenses and Costs - Operating expenses as a percentage of revenue were 31.3%, down from 32.7% in the same period of 2023[9] - GAAP operating expenses for the three months ended June 30, 2024, were $163,709, an increase from $145,830 in the same period of 2023, which is a 12.2% rise[24] - The company spent $38.2 million on repurchases of its common stock during the second quarter[12] Assets and Liabilities - Cash, cash equivalents, and short-term investments totaled $192.2 million as of June 30, 2024[5] - Total current assets increased to $860,108 thousand as of June 30, 2024, compared to $827,899 thousand a year ago, reflecting a growth of 3.9%[36] - Cash and cash equivalents decreased to $180,457 thousand from $258,056 thousand year-over-year, representing a decline of 30.1%[36] - Total liabilities rose to $542,708 thousand, up from $428,528 thousand a year ago, indicating an increase of 26.7%[36] - Accounts payable increased significantly to $189,772 thousand, compared to $130,417 thousand in the same period last year, marking a rise of 45.5%[36] - Total stockholders' equity decreased to $832,356 thousand from $841,717 thousand year-over-year, a decline of 1.4%[36] Tax and Valuation - The company reported a GAAP provision for income taxes of $11,276 thousand for the three months ended June 30, 2024, compared to $10,923 thousand for the same period in 2023, an increase of 3.2%[41] - Adjusted provision for income taxes was $13,075 thousand for the three months ended June 30, 2024, up from $11,039 thousand in the prior year, reflecting a growth of 18.5%[41] Other Financial Metrics - Goodwill increased to $183,374 thousand as of June 30, 2024, compared to $168,967 thousand a year ago, showing an increase of 8.5%[36] - Operating lease right-of-use asset rose to $143,480 thousand from $116,871 thousand year-over-year, an increase of 22.8%[36] - The company incurred $6.6 million pre-tax expense related to the change in valuation of a contingent consideration from the acquisition of Almost Famous[44]