Group 1 - U.S. President Donald Trump announced a 25% tariff on imported heavy trucks, effective from October 1, 2025, as part of a strategy to enhance domestic manufacturing [1][2] - The tariff will apply to all heavy trucks manufactured outside the U.S., aimed at protecting domestic manufacturers from unfair competition and addressing national security concerns [2] - This decision is part of a broader tariff initiative that includes 100% duties on pharmaceutical drugs, 50% tariffs on kitchen cabinets, and 30% on upholstered furniture, all set to take effect on the same date [3]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $553.5 million, a 0.2% increase compared to Q1 2024 [15] - Net income attributable to Steve Madden Limited for the quarter was $42.4 million, or $0.60 per diluted share, compared to $47 million, or $0.65 per diluted share in Q1 2024 [18] - Operating income for the quarter was $56.1 million, or 10.1% of revenue, compared to $61 million, or 11% of revenue in the comparable period in the prior year [17] Business Line Data and Key Metrics Changes - Wholesale revenue was $439.3 million, up 0.2% compared to Q1 2024, with wholesale footwear revenue at $296.1 million, a 0.2% increase [15] - Direct to consumer segment revenue declined 0.2% to $112.1 million, with a modest increase in digital business offset by a decline in brick and mortar [16] - Licensing royalty income was $2.2 million in the quarter, compared to $1.8 million in Q1 2024 [16] Market Data and Key Metrics Changes - The company expects to reduce production sourced from China to the mid-teens for fall 2025 and to the mid-single digits by spring 2026 [9] - The effective tax rate for the quarter was 24%, compared to 23.6% in Q1 2024 [18] Company Strategy and Development Direction - The acquisition of Kurt Geiger was highlighted as a significant investment, with an enterprise value of £289 million [11] - The company is focusing on shifting production out of China to countries like Vietnam, Cambodia, Mexico, and Brazil to mitigate tariff impacts [9][26] - The company plans to continue investing in marketing and strategic initiatives to position for long-term growth despite short-term challenges [10] Management Comments on Operating Environment and Future Outlook - Management acknowledged meaningful headwinds and uncertainty due to new tariffs on goods imported into the U.S. [8] - The company is confident in its ability to navigate current disruptions and return to profitable growth in the future [12] - Management noted that consumer demand remains stable but is being monitored closely due to recent declines in consumer confidence [69] Other Important Information - The company withdrew its 2025 financial guidance due to uncertainty related to new tariffs [20] - The company ended the quarter with $147.2 million in cash and no debt [18] Q&A Session Summary Question: How is the company handling orders from China? - The company is taking the majority of production that was far along in the process and negotiating price concessions to mitigate damage [24] Question: What countries is the company moving production to? - Production is being moved to countries like Cambodia, Vietnam, Mexico, and Brazil, with a focus on improving speed and reducing tariff risks [26] Question: What is the impact of tariffs on margins? - The company is accepting lower margins when moving production to other countries and is experiencing price pressure due to increased demand [31] Question: How is the company managing inventory levels? - Inventory is up 18%, primarily due to longer lead times and the decision to accelerate certain shipments ahead of tariff announcements [19][46] Question: What is the outlook for the handbag category? - The company expects continued pressure in the handbag category due to excess inventory and tariff disruptions [91] Question: What are the expectations for the Kirk Geiger acquisition? - The company is looking at a more conservative revenue expectation for both the existing business and Kirk Geiger due to current market conditions [102]

Core Insights - The company announced the completion of the acquisition of Kurt Geiger, which is expected to enhance growth and align with strategic initiatives [4][11] - The first quarter of 2025 showed a slight revenue increase of 0.2% year-over-year, with total revenue reaching $553.5 million [8] - The company is facing near-term challenges due to new tariffs impacting imported goods, but remains optimistic about long-term growth opportunities [3][12] Financial Performance - Revenue for the wholesale business was $439.3 million, a 0.2% increase compared to the first quarter of 2024, with gross profit margin improving to 35.7% from 35.1% [5] - Direct-to-consumer revenue decreased by 0.2% to $112.1 million, with gross profit margin declining to 60.1% from 61.9% due to increased promotional activity [6] - Net income attributable to Steven Madden, Ltd. was $40.4 million, or $0.57 per diluted share, compared to $43.9 million, or $0.60 per diluted share, in the same period of 2024 [8][20] Balance Sheet and Cash Flow - As of March 31, 2025, cash and cash equivalents totaled $147.2 million, while inventory increased to $238.6 million from $202.0 million a year earlier [7][22] - The company ended the quarter with a total asset value of $1.427 billion, reflecting a slight increase from $1.411 billion at the end of 2024 [22] - The company did not repurchase any shares in the open market during the first quarter but spent $7.8 million on share repurchases through net settlements of employee stock awards [9] Acquisition Details - The acquisition of Kurt Geiger was completed for an enterprise value of approximately £289 million, funded through a new credit agreement and cash on hand [11] - Kurt Geiger reported revenue of £400 million for the twelve months ended February 1, 2025, indicating a strong market presence [11] Future Outlook - The company has withdrawn its 2025 financial guidance due to macroeconomic uncertainties related to new tariffs and is not providing guidance at this time [12]