Steven Madden(US:SHOO)2025-02-27 01:02Financial Data and Key Metrics Changes - For Q4 2024, consolidated revenue was $582.3 million, a 12% increase compared to Q4 2023 [17] - Full-year revenue for 2024 increased 15.2% to $2.3 billion compared to $2 billion in 2023 [22] - Diluted EPS for 2024 was $2.67, up from $2.45 in 2023 [22] - Consolidated gross margin was 40.4%, down from 41.7% in Q4 2023 [19] - Net income for Q4 2024 was $39.3 million, or $0.55 per diluted share, compared to $45 million, or $0.61 per diluted share in Q4 2023 [21] Business Line Data and Key Metrics Changes - Accessories and apparel revenue increased 35.4% in Q4 2024, driven by strong growth across categories [18] - DTC revenue in 2024 was $550 million, a 9% increase versus 2023 [10] - Wholesale revenue was $402.9 million, up 13.6% compared to Q4 2023 [17] - The handbag business crossed the $300 million mark in revenue for the first time, increasing 31% compared to the prior year [8] Market Data and Key Metrics Changes - International revenue grew 12% in 2024, with EMEA region revenue increasing 18% [4][5] - Revenue in the Americas ex-US grew 9%, including mid-single-digit gains in Canada and Mexico [5] - The company transitioned from a distributor model to an ownership model in key markets, including new joint ventures in Latin America and Singapore [6] Company Strategy and Development Direction - The company aims to expand in international markets, accessories categories, and direct-to-consumer channels [14] - The acquisition of Kurt Geiger is expected to add a new growth engine, with a focus on expanding its brand portfolio and leveraging existing infrastructure [13][14] - The company plans to mitigate tariff impacts by diversifying production out of China and selectively raising prices [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the outlook for 2025 due to near-term headwinds, including new tariffs and inventory pressures in the handbag business [12] - The company anticipates revenue growth of 17% to 19% in 2025, including contributions from Kurt Geiger [25] - Management noted a slow start to 2025, particularly in DTC sales, attributed to weather and consumer confidence issues [43][45] Other Important Information - The company returned nearly $160 million to shareholders through dividends and share repurchases in 2024 [11] - The effective tax rate for Q4 2024 was 21.4%, up from 14.3% in Q4 2023 [21] - The company ended 2024 with $203.4 million in cash and no debt [23] Q&A Session Summary Question: Can you talk about gross margin pressure and plans to mitigate it? - Management acknowledged tariff pressures and outlined strategies including diversifying production and selective price increases [30][32] Question: Can you provide insights on DTC performance in January versus February? - Management reported a slow start to the year, particularly in selling spring products, with weak store traffic attributed to weather [43][45] Question: Why is now the right time for the Kurt Geiger acquisition? - Management highlighted Kurt Geiger's strong growth potential and alignment with strategic initiatives [47][48] Question: What is the expected impact of tariffs on the business? - Management included impacts from both China and Mexico tariffs in their guidance, with plans to adjust sourcing strategies accordingly [128] Question: How is the inventory health and what is the outlook for boots? - Management expressed confidence in inventory composition, noting a successful boot season and ongoing focus on spring styles [104][106] Question: What are the plans for future M&A activity? - Management indicated a focus on integrating Kurt Geiger, with no immediate plans for additional acquisitions [72]