Steven Madden(US:SHOO)2020-02-27 18:26Financial Data and Key Metrics Changes - Total revenue for Q4 2019 increased by 0.7% to $419.6 million compared to $416.8 million in Q4 2018 [26] - Full year 2019 total revenue increased by 6.5% to $1.8 billion from $1.7 billion in 2018 [33] - Diluted EPS for Q4 2019 was $0.39, down from $0.42 in Q4 2018, while full year diluted EPS increased to $1.95 from $1.83 [32][33] - Consolidated gross margin was 37.8%, slightly down from 38.1% in the prior year [30] Business Line Data and Key Metrics Changes - Wholesale segment revenue declined by 1.1% to $313.8 million, with wholesale footwear revenue approximately flat at $233.4 million [26][30] - Retail segment revenue increased by 8.7% to $101.4 million, with same-store sales up 6.7% [28] - The wholesale handbag business grew by 28%, marking the third consecutive year of double-digit growth [10] Market Data and Key Metrics Changes - International revenue for the Steve Madden brand increased by high-single digits in 2019, with strong performance in Europe [12] - The company ended Q4 with 227 Company-operated retail stores, including 68 outlets and eight e-commerce stores [28] Company Strategy and Development Direction - The company aims to enhance the Steve Madden brand, expand e-commerce, and grow international markets, particularly in Europe [20] - Focus on positioning new acquisitions, GREATS and BB Dakota, for profitable growth [20] - Plans to increase marketing investment significantly in 2020 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the near-term outlook due to headwinds from the coronavirus outbreak, tariffs, and the termination of the Kate Spade footwear license [21] - Estimated adverse impact on EPS in 2020 of approximately $0.35 compared to 2019 [22] - Management remains optimistic about the long-term growth opportunities despite short-term challenges [23] Other Important Information - The company repurchased approximately 3 million shares for $102 million in 2019 and raised the quarterly dividend by 7% [17] - The effective tax rate for Q4 was 6.3%, down from 9.2% in the prior year [32] Q&A Session Summary Question: Can you parse out the negative mid-single-digit impact in the first half? - Management indicated that the headwinds from coronavirus and tariffs account for about a $0.20 EPS headwind in the first half, with a total forecast of $0.22 for the year [45][46] Question: What is the current state of the North American wholesale climate? - Management noted a soft start to the year for many wholesale customers, particularly in the footwear category, but positive early selling for sandals and open dress shoes [48] Question: Can you elaborate on the coronavirus impact? - The primary impact is related to supply chain disruptions, with approximately 90% of Chinese factories open but operating at reduced productivity [53][54] Question: How did the Steve Madden Women's wholesale business perform in Q4? - The business was down in Q4 due to a shift in boot deliveries from Q4 to Q3, but overall for the year, it grew by 7% [58][60] Question: What percentage of total product is made in China? - Currently, about 73% of total products are made in China, down from 88% in 2019 [75][76] Question: How are you seeing price increases in wholesale and retail? - Price increases are expected to be in the low to mid-single digits, with some reduction in prices due to tariff adjustments [106]