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Tariffs aren’t swaying fashion brands toward domestic sourcing
Yahoo Finance· 2025-10-08 09:56
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. There is “no clear evidence” that the Trump administration’s tariff policies have swayed U.S. fashion companies to up domestic sourcing, according to a 2025 Fashion Industry Benchmarking Study published from the U.S. Fashion Industry Association. Each of the 25 fashion companies surveyed between April and June for the report said they expect higher tariff ...
Steven Madden(SHOO) - 2025 Q2 - Earnings Call Transcript
2025-07-30 13:30
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]
Arhaus(ARHS) - 2025 Q1 - Earnings Call Transcript
2025-05-08 13:32
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]
Arhaus(ARHS) - 2025 Q1 - Earnings Call Transcript
2025-05-08 13:30
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]