Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $124.5 million, up 10.4% from $112.8 million in the prior year quarter, driven by a $9.4 million increase in volume and a $3.5 million favorable impact from product mix [9] - Gross margin for Q3 2025 was 34.5%, down from 38.6% in the prior year quarter, negatively impacted by higher import costs [10] - Net income for Q3 2025 was $7.6 million, compared to $9.3 million in the prior year quarter, with a net income margin of 6.1% [12] - Adjusted EBITDA for Q3 2025 was $13.1 million, down from $14.7 million in the prior year quarter, with an adjusted EBITDA margin of 10.5% [12] Business Line Data and Key Metrics Changes - Sales to chain accounts and distributors increased by 13.7%, while online sales rose by 3.1% over the prior year quarter [9] - Sales to the retail channel decreased by 12.5%, reflecting overall retail sector softness [9] Market Data and Key Metrics Changes - The company experienced double-digit growth across all major markets, particularly in Texas and California [4] - Domestic sourcing increased to approximately 20% from about 15% in Q2 2025, while imports from Taiwan decreased to approximately 42% from 58% [4] Company Strategy and Development Direction - The company aims to scale its new paperback business to over $100 million in additional annual revenue over the next two to three years, driven by a shift from plastic to paper products among restaurant chains [6] - A stock repurchase program of up to $15 million was announced, reflecting confidence in future growth prospects [8][14] - The company is focused on maintaining disciplined pricing and enhancing operational efficiencies while integrating new customer accounts [7][8] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing trade volatility but expressed confidence in sustaining growth through effective pricing initiatives and sourcing diversification [4] - The anticipated growth from the new paperback category is expected to be supported by evolving regulations and a focus on customer experience [6] - For Q4 2025, the company expects net sales to increase by approximately 10%-14% over the prior year quarter, with gross margin projected to be within 33%-35% [14] Other Important Information - The company ended Q3 2025 with $91.1 million in working capital and maintained financial liquidity of $34.7 million [13] - The Board of Directors approved a quarterly dividend of $0.45 per share, payable on November 28, 2025 [14] Q&A Session Summary Question: Plans for scaling the paperback business - Management confirmed the aim to scale the paperback business to $100 million over the next two years, driven by chains moving away from plastic [17][19] Question: Confidence in gross margin recovery - Management indicated that while they are being conservative, there are signs of stabilization in currency exchange rates that could improve gross margins [20][22] Question: Capital allocation priorities - Management stated that they are considering stock buybacks while maintaining strong cash flow and are also looking at potential mergers and acquisitions [24][25] Question: Dividend versus buyback considerations - Management clarified that they do not have any debt on their books and are evaluating capital allocation strategies, including potential share repurchases [30][32] Question: Expected margins on new bag business - Management indicated that margins on the new bag business could vary, with higher volume products in the high teens and specialty bags potentially reaching high 50% margins [40]

Core Insights - The Trump administration's tariff policies have not significantly influenced U.S. fashion companies to increase domestic sourcing according to a 2025 Fashion Industry Benchmarking Study [1] Group 1: Tariff Impact - All 25 surveyed fashion companies expect higher tariff and trade barrier costs this year, with around 70% reporting delays or cancellations of sourcing orders due to tariff hikes [2] - Adjusting procurement networks is the most common strategy for mitigating tariff impacts, with over 80% of respondents planning to diversify their production footprint to other countries and regions [3] Group 2: Sourcing Preferences - Approximately 44% of respondents indicated plans to expand sourcing from the Western Hemisphere, while 17% aim to increase sourcing of 'Made in the USA' apparel and textiles [4] - About 40% of surveyed companies reported sourcing goods from the U.S., consistent with the previous year's report [4] Group 3: Challenges in Domestic Production - Higher tariffs disadvantage U.S.-based production as they increase costs of raw materials sourced from other countries, affecting the price competitiveness of domestically made apparel [5] - Despite interest in shifting production to the Western Hemisphere, significant challenges remain for U.S. fashion brands [5] Group 4: Sourcing Landscape - Asia remains the primary apparel sourcing base for U.S. fashion companies, although there is a trend to reduce sourcing from China to low single-digit percentages [6] - Countries such as Vietnam, Bangladesh, Cambodia, and Indonesia are becoming more attractive alternatives for sourcing [6] - U.S. domestic suppliers are perceived as lacking in product diversity, agility, flexibility, and vertical integration compared to key Asian suppliers, which are critical factors for navigating the current trade environment [7]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $559 million, a 6.8% increase compared to 2024. Excluding the newly acquired Kurt Geiger, consolidated revenue decreased by 10% [9] - Wholesale revenue was $360.6 million, down 6.4% compared to Q2 2024, and down 12.8% excluding Kurt Geiger [10] - Direct-to-consumer (DTC) segment revenue increased by 43.3% to $195.5 million, but decreased by 3% excluding Kurt Geiger [10] - Consolidated gross margin was 41.9%, compared to 41.5% in Q2 2024, with tariffs impacting gross margin by approximately 230 basis points [12] - Operating income for the quarter was $22.6 million, or 4% of revenue, compared to $54.5 million, or 10.4% of revenue in the prior year [13] - Net income attributable to Steve Madden Limited was $13.9 million, or $0.20 per diluted share, compared to $41.2 million, or $0.57 per diluted share in 2024 [13] Business Line Data and Key Metrics Changes - Wholesale footwear revenue was $220.1 million, a 7.1% decrease from Q2 2024, or down 11.7% excluding Kurt Geiger [10] - Wholesale accessories and apparel revenue was $140.4 million, down 5.3% compared to the prior year, or down 14.6% excluding Kurt Geiger [10] - The apparel business saw revenue growth, being one of the few segments that performed well during the quarter [38] Market Data and Key Metrics Changes - The company ended the quarter with 392 company-operated retail stores, including 98 outlets, and 130 company-operated concessions in international markets [11] - Licensing royalty income was $2.9 million in the quarter, compared to $1.8 million in 2024 [11] - International business, excluding Kurt Geiger, was up about 8% in revenue or about 10% in constant currency [88] Company Strategy and Development Direction - The company is focused on diversifying sourcing out of China due to tariff impacts, with plans to source approximately 30% of US imports from China for fall 2025, down from 71% in 2024 [5] - The integration of the newly acquired Kirk Geiger is progressing well, with strong momentum and potential for significant growth [8] - Marketing efforts are being amplified to deepen consumer connections, particularly targeting Gen Z and millennials through various channels [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the second quarter was challenging due to new tariffs, leading to order cancellations and lost sales [4] - The company expects continued impacts from tariff-related disruptions in Q3, but anticipates improvements in Q4 [20] - Management remains optimistic about long-term growth, citing strong brand positioning and a robust balance sheet [8] Other Important Information - The company did not repurchase any shares during the quarter and declared a quarterly cash dividend of $0.21 per share [14] - Due to ongoing uncertainties regarding tariffs, the company will not provide financial guidance for 2025 [15] Q&A Session Summary Question: Which wholesale channels saw significant order cancellations? - The mass and off-price channels experienced the most significant order cancellations, with approximately 95% of the wholesale revenue shortfall coming from these areas [18] Question: What is the expected gross margin pressure for Q3 and Q4? - Continued pressure on gross margins is expected in Q3, with hopes for improvement by Q4 [20] Question: How has consumer response been to price increases? - The company is seeing a positive consumer response to average price increases of about 10%, particularly in trending categories like dress shoes and summer boots [26] Question: What is the current margin profile for Kurt Geiger? - Kurt Geiger's EBIT margins were about 9.3% prior to acquisition, expected to decrease slightly this year due to tariff pressures [71] Question: How did the Nordstrom anniversary sale perform? - The Nordstrom anniversary event performed very well, indicating strong sell-through and optimism for future sales [93]

Financial Data and Key Metrics Changes - Net revenue for the first quarter of 2025 was $311 million, representing a 5.5% year-over-year increase, landing near the midpoint of guidance [35] - Demand comparable growth was 4.1%, driven by strong client engagement across retail and e-commerce channels [36] - Gross margin was $116 million, up 0.4% year-over-year, but as a percentage of net revenue, it decreased by 190 basis points to 37.1% due to higher occupancy costs and product costs [36] Business Line Data and Key Metrics Changes - Showroom growth contributed significantly to net revenue, with five total showroom projects completed in the first quarter, including one new traditional showroom and four strategic relocations [18][19] - The company expects to complete approximately 12 to 15 total showroom projects in 2025, raising the outlook from the previous estimate [19] Market Data and Key Metrics Changes - The U.S. represented approximately 36% of total receipts, with over 70% of upholstery business sourced domestically [10] - China accounted for about 13% of total product receipts in April, expected to decline to approximately 5% in Q3 and around 1% in Q4 [11] Company Strategy and Development Direction - The company is focused on long-term growth through strategic investments, showroom expansion, and enhancing the omnichannel client experience [24][32] - The management emphasizes a differentiated model based on high-quality design and premium client experience as a competitive advantage [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term volatility due to macroeconomic factors but expressed confidence in the company's resilience and long-term strategy [24][25] - The company is proactively managing tariffs through sourcing diversification and vendor relationships to mitigate potential impacts [39] Other Important Information - The company remains debt-free with $214 million in cash and cash equivalents, providing flexibility for strategic investments [6][37] - A new Chief Financial Officer, Michael Lee, will join the company on May 12, bringing extensive financial leadership experience [8] Q&A Session Summary Question: How will the company manage its holistic value proposition and protect margins during 2025? - Management plans to maintain margins and focus on long-term growth, leveraging strong U.S. production capabilities and vendor partnerships [44][47] Question: Are there any changes in consumer engagement trends since early April? - Management noted a temporary softness in sales due to macroeconomic factors but remains optimistic about long-term demand for home products [50][52] Question: Can you provide more perspective on the low end of the comps guidance? - The widening of guidance ranges accounts for potential continued volatility throughout the year [56] Question: How much of the $10 million tariff impact can be mitigated through strategic sourcing? - Management believes a portion can be mitigated through sourcing shifts and vendor concessions, with the impact expected to flow through in the second half of the year [60][63] Question: What is the strategy regarding showroom openings amid macro uncertainty? - Management plans to continue with showroom openings as they see long-term potential and are in a strong cash position [99] Question: How should gross margin be modeled for the rest of the year? - Management expects slight deleverage but not as pronounced as in Q1, with product margin expected to be slightly up year-over-year [102]

Financial Data and Key Metrics Changes - Net revenue for Q1 2025 was $311 million, representing a 5.5% year-over-year increase, landing near the midpoint of guidance [34] - Demand comparable growth was 4.1%, driven by strong client engagement across retail and e-commerce channels [34][35] - Gross margin was $116 million, up 0.4% year-over-year, but as a percentage of net revenue, it decreased by 190 basis points to 37.1% due to higher occupancy costs [35] - Net income was $5 million, landing near the midpoint of guidance, while adjusted EBITDA was $19 million, at the lower end of guidance [36][37] Business Line Data and Key Metrics Changes - Showroom growth contributed significantly to net revenue, with five total showroom projects completed in Q1 2025, including one new traditional showroom and four strategic relocations [17][18] - The company plans to complete approximately 12 to 15 total showroom projects in 2025, increasing from the previous estimate of three to five new showrooms [18] Market Data and Key Metrics Changes - The U.S. represented approximately 36% of total receipts, with over 70% of upholstery business sourced domestically [10][11] - China accounted for about 13% of total product receipts in April, expected to decline to approximately 5% in Q3 and around 1% in Q4 [11] Company Strategy and Development Direction - The company is focused on long-term growth through disciplined execution, strategic investments, and expanding showroom footprint [5][6] - The management emphasizes a differentiated model based on high-quality design and premium client experience as a competitive advantage [6][17] - The company is investing in technology and e-commerce to enhance the client experience and strengthen omnichannel capabilities [15][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term volatility due to tariff news and stock market fluctuations but remains confident in the long-term strategy [22][24] - The company is proactively managing tariffs through sourcing diversification and expects to mitigate some of the tariff impacts through strategic sourcing shifts [38][39] Other Important Information - The company remains debt-free with $214 million in cash and cash equivalents, providing flexibility for strategic investments [5][37] - A new Chief Financial Officer, Michael Lee, will join the company on May 12, bringing extensive financial leadership experience [7] Q&A Session Summary Question: How will the company manage its holistic value proposition and protect margins during 2025? - Management expressed confidence in maintaining margins and emphasized a long-term focus on healthy sales and executing their plan [44][46] Question: Are there any changes in consumer engagement trends since early April? - Management noted that while there was softness in April due to market conditions, overall demand remains strong, and clients continue to prioritize quality [50][52] Question: Can you provide perspective on the low end of the comps guidance? - The widening of guidance ranges accounts for potential continued volatility throughout the year, with management planning to adjust as needed [58] Question: How much of the $10 million tariff impact can be mitigated through strategic sourcing shifts? - Management indicated that they have worked with partners to absorb some costs and believe the remaining $10 million is manageable [62] Question: What is the strategy regarding showroom openings amid softening demand? - Management confirmed plans to continue opening new showrooms, viewing them as long-term investments that will capture market share when demand rebounds [96][98]