Steven Madden(SHOO) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $528.7 million for Q3 2021, a 52.4% increase compared to 2020 and a 5.3% increase compared to Q3 2019 [25] - Diluted EPS increased to $0.82, up from $0.39 in 2020 and $0.67 in 2019 [32] - Gross margin improved to 41.6%, up from 40.3% in the prior year and 39% in 2019 [30] Business Line Data and Key Metrics Changes - Retail segment revenue grew 108.6% compared to 2020 and 62.5% compared to 2019, with e-commerce revenue increasing 83.7% versus 2020 and 200% versus 2019 [28] - Wholesale revenue was $402 million, up 41.6% compared to the prior year but down 4.6% compared to 2019 [25] - Wholesale footwear revenue increased by 42.6% from 2020 but declined by 3.7% from 2019 [26] Market Data and Key Metrics Changes - Global brick-and-mortar comp store sales increased 16% compared to 2019, with U.S. stores seeing a 23% increase [14] - The company's European business revenue increased by 45% compared to 2019, despite supply chain delays [18] Company Strategy and Development Direction - The company aims to expand its business beyond footwear, focusing on handbags and apparel, with handbag revenue expected to grow approximately 20% for the full year compared to 2019 [15] - A significant marketing campaign called the Madden Verse was launched to enhance brand visibility and consumer engagement [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising fiscal 2021 guidance, expecting revenue to increase by 50% to 52% compared to 2020 [35] - The company acknowledged ongoing supply chain disruptions but noted strong momentum in its business, particularly in direct-to-consumer channels [35] Other Important Information - The company ended the quarter with $259.9 million in cash and no debt, while inventory totaled $201.2 million, up 83.4% compared to last year [33] - A quarterly cash dividend of $0.15 per share was approved, payable on December 27, 2021 [34] Q&A Session Summary Question: What is driving the acceleration in Q4 guidance? - Management highlighted the strength and momentum in the Steve Madden brand, particularly in direct-to-consumer and wholesale channels, with expectations for mid-teens to low twenties growth in Q4 compared to 2019 [38][39] Question: How is the new marketing campaign performing? - The campaign has received positive customer responses, driving traffic and sales both online and in stores, with footwear seeing more direct conversions than handbags [49][51] Question: What are the current supply chain challenges? - The company has moved a significant portion of production to Mexico and Brazil, which has improved stock availability, but air freight usage has increased due to longer lead times [53][56] Question: What are the expectations for retail EBIT margins? - Management anticipates mid-teens EBIT margins for the retail segment, significantly improved from pre-pandemic levels [60] Question: How is the European market performing? - The European business is expected to exceed $60 million in revenue this year, showing strong growth and potential for further expansion [73]