Steven Madden(US:SHOO)2022-11-02 17:17Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2022 was $556.6 million, a 5.3% increase compared to 2021 [15] - Net income attributable to Steve Madden, Ltd. for the quarter was $61.5 million or $0.79 per diluted share, compared to $66.6 million or $0.82 per diluted share in 2021 [22] - Operating income for the quarter totaled $79 million or 14.2% of revenue, down from $88.4 million or 16.7% of revenue in 2021 [21] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) revenue was $118.5 million, a 3.7% decline compared to 2021, with ecommerce revenue declining [18] - Wholesale revenue was $434.6 million, up 8.1% compared to the prior year, with wholesale footwear revenue increasing 8.7% [15][17] - Handbags revenue grew 19% compared to the prior year, while apparel revenue grew 52% [9] Market Data and Key Metrics Changes - International revenue grew more than 50% year-over-year for the fourth consecutive quarter, representing a significant growth opportunity [10] - U.S. wholesale footwear revenue increased 3% over last year, with branded business revenue growing more than 20% [11] Company Strategy and Development Direction - The company aims to create trend-right product assortments and improve speed-to-market capabilities, which are critical competitive advantages [6] - Increased investment in marketing and consumer engagement is part of the strategy to connect brands to culture [7] - The company is focused on expanding its business outside of footwear, particularly in handbags and apparel [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position and long-term prospects despite macroeconomic uncertainties [14] - The company anticipates a conservative ordering approach from wholesale customers, adjusting its fiscal 2022 outlook accordingly [12][25] - Management noted that supply chain disruptions are easing, allowing for improved inventory management [23] Other Important Information - The company published its 2021 Sustainability Report, outlining its sustainability strategy [13] - Capital expenditures for the quarter were $4.9 million, and the company repurchased $35.1 million of common stock [24] Q&A Session Summary Question: DTC demand progression through the quarter - Management noted that August was the weakest month, but sales rebounded in September and October [27] Question: Softness in wholesale orders - Management indicated that most wholesale customers are prioritizing inventory control, leading to a pullback in orders across various channels [28] Question: Potential trade-down effect in economic downturn - Management believes the company is well-positioned to benefit from trade-down effects, similar to performance during the Great Recession [30] Question: Point of sale performance in mass and department store channels - Management confirmed that retail sales are above pre-COVID levels but below last year's exceptional performance [32] Question: Cost outlook for 2023 - Management anticipates potential deflation in landed costs due to improved factory conditions and reduced freight rates [34][73] Question: Inventory management and promotional activity - Management expressed confidence in inventory levels, stating that they are not speculative and are aligned with sales trends [56]