Steven Madden(US:SHOO)2024-11-09 17:24Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2024 was $624.7 million, a 13% increase compared to Q3 2023. Excluding Almost Famous, revenue grew 5.5% [16] - Net income attributable to Steve Madden Limited was $64.8 million or $0.91 per diluted share, compared to $65.1 million or $0.88 per diluted share in Q3 2023 [19] - Operating income for the quarter was $85.4 million or 13.7% of revenue, up from $83.4 million or 15.1% of revenue in the comparable period [19] Business Line Data and Key Metrics Changes - Accessories and apparel revenue rose 48% overall, or 19% excluding Almost Famous. Handbag revenue increased 27% in the quarter [11] - Wholesale revenue was $495.7 million, up 14.4% compared to Q3 2023. Excluding Almost Famous, wholesale revenue increased 4.8% [16] - Direct-to-consumer (DTC) revenue grew 8% in Q3, with e-commerce revenue increasing by 10% [12][17] Market Data and Key Metrics Changes - International revenue grew 11% in Q3 compared to the same period last year, with EMEA region expected to be up more than 20% in 2024 [9][10] - The Americas region is on track for double-digit top line growth in 2024, driven by strong performance in Canada and Mexico [10] Company Strategy and Development Direction - The company aims to win with product by utilizing a test and react strategy and industry-leading speed-to-market capabilities [6] - Focus on expanding business in international markets, growing outside of footwear, and strengthening the core U.S. wholesale footwear business [10][11][13] - Corporate social responsibility objectives are being advanced, with a recent sustainability report published [13] Management's Comments on Operating Environment and Future Outlook - Management raised guidance for 2024 revenue and earnings based on strong Q3 results, expecting revenue to increase by 13% to 14% compared to 2023 [14][21] - Management expressed confidence in the ability to drive growth and create value for stakeholders over the long term [14] Other Important Information - The company ended Q3 with $150.5 million in cash and no debt, with inventory at $268.7 million due to increased transit times [20] - A quarterly cash dividend of $0.21 per share was approved, payable on December 27, 2024 [21] Q&A Session Summary Question: Update on China sourcing exposure and wholesale footwear channel performance - Management has been planning to reduce sourcing from China and expects to decrease the percentage of goods sourced from China by 40% to 45% over the next year [24][25] - The wholesale footwear business saw a smaller decline in Q3 compared to Q2, with key customers delaying boot deliveries [26] Question: Growth expectations for wholesale and DTC channels - Updated guidance indicates mid-teens growth for wholesale, driven by strength in accessories and apparel, while DTC remains at high singles growth [29] Question: Trends in wholesale business by type and retail performance - Value-priced retailers are performing strongly, with private label outpacing branded business. Recent months have seen full-price stores outperforming outlets [34] Question: Trends in footwear styles and demand - Tall shaft boots and soccer-inspired sneakers are performing well, with strong sell-through and reorders expected [35][36] Question: Impact of moving production out of China on gross margins - Management indicated it is difficult to quantify the potential impact of moving production out of China due to various economic implications [38] Question: Insights from the recent marketing campaign and store investments - The marketing campaign was successful, driving revenue and brand awareness, with ongoing investments in store refreshes [41]