Steven Madden (SHOO) Gains on Diversification & Market Expansion

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]