27 Apr Steve Madden Q1 Revenues Climb 6 Percent
Steve Madden reported net sales increased 6.3 percent in the first quarter, to $323.9 million compared to $304.6 million in the same period of 2014. Gross margin was 34.4 percent as compared to 35.6 percent in the same period last year. Operating expenses as a percentage of sales were 26.4 percent compared to 24.8 percent of sales in the same period of 2014.
Operating income totaled $29.8 million, or 9.2 percent of net sales, compared with operating income of $36.0 million, or 11.8 percent of net sales, in the same period of 2014. Operating income in the first quarter of 2015 included a net benefit of $3.0 million related to early lease termination of our 5th Avenue store location. Operating income in the first quarter also included a $3.0 million loss related to the partial impairment of our Wild Pair trademark. As the aforementioned items offset, operating income for the first quarter of 2015 excluding these items remained at $29.8 million.
Net income was $19.8 million, or $0.32 per diluted share, compared to $23.6 million, or $0.36 per diluted share, in the prior year’s first quarter. Net income for the first quarter of 2015 included the aforementioned items. As these items offset, net income excluding these items remained at $19.8 million, or $0.32 per diluted share.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased with our first quarter results, with both sales and earnings meeting plan. Importantly, we saw a number of new fashion footwear trends begin to emerge, which contributed to double digit comparable store sales growth in our retail business. While sales in our wholesale footwear business excluding acquisitions were down, as expected, in the first quarter, we saw a meaningful improvement in sell-through at our retail partners compared to the prior year. In addition, our wholesale accessories business recorded a strong sales increase, driven by growth in Betsey Johnson, Madden Girl and private label handbags. Overall, we are pleased with the underlying trends we are seeing in our business and remain on track to meet our sales and earnings targets for 2015.”
First Quarter 2015 Segment Results
Net sales for the wholesale business were $277.0 million in the first quarter compared to $265.0 million in the first quarter of 2014. Gross margin in the wholesale business decreased to 30.9 percent compared to 32.6 percent in last year’s first quarter, with a decline in footwear primarily attributable to the impact from the Dolce Vita acquisition and a decline in accessories driven by changes in customer mix.
Retail net sales in the first quarter were $46.9 million compared to $39.6 million in the first quarter of the prior year. Same store sales increased 11.6 percent for the quarter. Retail gross margin decreased to 55.1 percent in the first quarter of 2015 compared to 55.7 percent in the first quarter of 2014 as a result of increased promotional activity in the outlet stores.
During the first quarter, the company opened one full price store and closed three full price stores. The company ended the quarter with 158 company-operated retail locations, including 118 full price stores, 32 outlets, four Internet stores and four joint venture locations in South Africa.
The effective tax rate for the first quarter of 34.3 percent compares to 35.1 percent in the first quarter of the prior year.
Balance Sheet and Cash Flow
During the first quarter of 2015, the c repurchased approximately 1.4 million shares of the company’s common stock for $52.8 million.
As of March 31, 2015, cash, cash equivalents, and current and non-current marketable securities totaled $168.7 million. Advances payable to the factor were $9.5 million.
Company Outlook
For fiscal year 2015, the company continues to expect that net sales will increase 7 percent to 9 percent over net sales in 2014. Diluted EPS for fiscal year 2015 is expected to be in the range of $1.85 to $1.95.