Steven Madden(US:SHOO)2021-04-30 22:09Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2021 was $361 million, up 1% from Q1 2020, with diluted EPS of $0.33, a 108% increase from the prior year [12][29] - Operating income for the quarter totaled $35.6 million, or 9.9% of revenue, compared to $14.2 million, or 4% of revenue in the prior year [28] - Consolidated gross margin increased by 130 basis points to 38.5% compared to 37.2% in the prior year [27] Business Line Data and Key Metrics Changes - Wholesale revenue declined 4% to $291.4 million, with wholesale footwear revenue down 8% to $216.8 million due to COVID-19 and supply chain disruptions [25][13] - Retail segment revenue increased 27% to $67.5 million, driven by a significant improvement in e-commerce, which grew 89% compared to Q1 2020 [18][20] - Wholesale accessories and apparel revenue increased 10% to $74.6 million, driven by strong gains in handbags [16] Market Data and Key Metrics Changes - Internationally, Europe showed strong revenue gains driven by digital channels, while Canada faced challenges due to COVID-19 lockdowns [15] - E-commerce represented 54% of total retail segment sales, with Steve Madden's e-commerce business growing 112% [26][20] Company Strategy and Development Direction - The company is focused on capturing growth in the European market through the acquisition of a 49.9% share in its European joint venture, expecting approximately $55 million in revenue [22][23] - Management emphasized the importance of digital channels and strong product assortments to drive future growth [23][106] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the near-term outlook for the wholesale channel due to ongoing supply chain disruptions and conservative ordering from wholesale customers [17][31] - The company anticipates continued challenges from COVID-19 but remains confident in its long-term growth potential based on brand strength and market positioning [23][32] Other Important Information - The company repurchased approximately 154,000 shares for $5.6 million during the quarter, with $135 million remaining on the share repurchase authorization [30] - A quarterly cash dividend of $0.15 per share was approved, payable on June 25, 2021 [31] Q&A Session Summary Question: Can you provide more details on the supply chain impact? - Management noted that supply chain disruptions had a significant impact in Q1, estimating a $15 million impact, with expectations of a similar or greater impact in Q2 [35][38] Question: How are retailers planning for the second half? - Retailers are re-evaluating their fall plans due to improved performance, but no firm updates have been received [47] Question: What is the outlook for gross margins? - Management expects significant headwinds from increased freight costs and the non-renewal of GSP, estimating a 210 basis point pressure on gross margins in Q2 [40][41] Question: How is the European joint venture performing? - The European joint venture has shown strong growth, with management confident in its potential as a significant growth driver [59] Question: What trends are being observed in the dress shoe category? - Management reported strong performance in dress shoes, capturing a disproportionate share of consumer interest [66] Question: What is the outlook for the accessories business? - The accessories business is performing well, but management cautioned that timing shifts may affect performance in Q2 [96] Question: How is the digital marketing strategy evolving? - The company is seeing strong returns on digital marketing investments, with a focus on enhancing product pages and improving conversion rates [106][120]