Steven Madden(SHOO) - 2025 Q4 - Annual Report

Financial Performance - Total revenue for 2025 was $2,534,109, an increase of 11.0% compared to 2024, driven by the acquisition of the Kurt Geiger business[176]. - Net income attributable to Steven Madden, Ltd. was $44,661 in 2025, down from $169,390 in 2024, with an effective tax rate of 36.9% compared to 23.7% in 2024[176]. - Diluted earnings per share in 2025 was $0.63 on 71,181 diluted weighted average shares outstanding, compared to $2.35 on 71,963 shares in 2024[176]. - Gross profit in 2025 was $1,049,469, or 41.4% of total revenue, up from $936,932, or 41.0% in 2024, attributed to a higher-margin direct-to-consumer business[184]. - Operating expenses in 2025 rose to $967,978, or 38.2% of total revenue, compared to $698,936, or 30.6% in 2024, primarily due to the acquisition of Kurt Geiger[185]. - Income from operations in 2025 decreased to $80,771, or 3.2% of total revenue, down from $224,939, or 9.9% in 2024[187]. - Revenue from the Wholesale Footwear segment in 2025 was $1,035,190, or 40.9% of total revenue, down 2.3% from $1,059,440 in 2024[188]. - Revenue from the Wholesale Accessories/Apparel segment in 2025 was $640,662, or 25.3% of total revenue, a decrease of 3.3% from $662,673 in 2024[192]. - Revenue from the Direct-to-Consumer segment in 2025 was $845,666, accounting for 33.4% of total revenue, up 53.7% from $550,153 or 24.1% in 2024, driven by the acquisition of Kurt Geiger[196]. - Royalty income from the Licensing segment was $12,591, or 0.5% of total revenue in 2025, compared to $10,661, also 0.5% in 2024[200]. Store and E-commerce Presence - As of December 31, 2025, the company had 399 brick-and-mortar retail stores and seven e-commerce platforms, up from 291 stores and five platforms in 2024[177]. - The acquisition of Kurt Geiger added 31 full-price stores and 17 outlet stores, along with 72 concessions[177]. Cash and Equity - The company had $112,423 in cash and cash equivalents, with total stockholders' equity of $903,982 as of December 31, 2025[178]. - Cash provided by operating activities totaled $162,199 in 2025, down from $198,096 in 2024, primarily due to lower net income and unfavorable working capital changes[209]. - Cash used in investing activities was $400,919 in 2025, mainly for the acquisition of Kurt Geiger and capital expenditures[210]. Strategic Initiatives - Strategic initiatives include expanding international markets, enhancing direct-to-consumer digital business, and growing non-footwear categories[174][180]. - The company declared a quarterly cash dividend of $0.21 per share, totaling $60,962 in dividends paid for the year ended December 31, 2025[175]. Inventory and Receivables Management - Inventory turnover was 3.8 times for both 2025 and 2024; excluding Kurt Geiger, it was 5.0 times in 2025[178]. - Average collection days for accounts receivable improved to 54 days in 2025 from 72 days in 2024[178]. Risks and Challenges - The company is exposed to foreign exchange rate fluctuations, which may materially affect business and financial condition[112]. - The company relies on a combination of in-house IT infrastructure and third-party cloud service providers, making it vulnerable to cyber-attacks and system failures[115]. - The integration of artificial intelligence and machine learning introduces risks such as data loss and inventory imbalances, potentially impacting financial condition[118]. - The company’s revenue is partially dependent on licensing trademarks, with potential risks from licensee actions affecting brand integrity and revenue[123]. - Changes in economic conditions could adversely affect consumer confidence and discretionary spending, impacting financial condition and results of operations[124]. - Contingent payment liabilities from acquisitions may materially impact results of operations if financial projections are not met[235]. - The company is involved in various legal proceedings that could divert management resources and adversely affect operating results[125]. - The company may face additional tax liabilities due to audits by taxing authorities, which could materially impact operating results or cash flows[126]. - Changes in tax laws could increase tax liabilities and adversely affect after-tax profitability[127]. - Foreign tax authorities may introduce new tax laws or adjust existing regulations, further impacting tax liabilities and after-tax income[128]. Internal Controls and Compliance - The company must maintain effective internal control over financial reporting as required by the Sarbanes-Oxley Act, which involves ongoing evaluation and testing[129]. - The acquisition of Kurt Geiger in 2025 requires integration of financial reporting systems, posing risks until fully integrated into the company's internal control framework[130]. - Failure to maintain effective internal controls could lead to significant deficiencies, undermining investor confidence and potentially requiring restatement of financial statements[131].