02 Nov Steve Madden Sees 5.5 Percent Q3 Revenue Gain
Steve Madden showed a slight earnings gain in the third quarter on a 5.5 percent gain in sales.
For the Third Quarter 2015:
- Net sales increased 5.5 percent to $413.5 million compared to $392.0 million in the same period of 2014.
- Gross margin expanded 130 basis points to 36.0 percent as compared to 34.7 percent in the same period last year.
- Operating expenses as a percentage of sales were 21.6 percent compared to 20.9 percent of sales in the same period of 2014.
- Operating income totaled $66.3 million, or 16.0 percent of net sales, compared with operating income of $59.3 million, or 15.1 percent of net sales, in the same period of 2014.
- Net income was $42.9 million, or $0.70 per diluted share, compared to $39.2 million, or $0.62 per diluted share, in the prior year’s third quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased with our third quarter results, which included an increase in diluted EPS of 13 percent compared to the prior year period. Our retail segment was once again the standout, with a third consecutive quarter of double-digit comparable store sales growth. We also benefited from earnings contributions from the recently acquired Dolce Vita, Blondo and SM Mexico. While the overall retail environment is choppy, we are pleased with the momentum in our business and remain on track to meet our earnings targets for the year.”
Third Quarter 2015 Segment Results
Net sales for the wholesale business were $357.0 million in the third quarter compared to $343.3 million in the third quarter of 2014. Gross margin in the wholesale business increased to 32.1 percent compared to 31.3 percent in last year’s third quarter due to improvement in the wholesale footwear segment.
Retail net sales in the third quarter were $56.4 million compared to $48.7 million in the third quarter of the prior year. Same store sales increased 11.2 percent for the third quarter. Retail gross margin increased to 60.4 percent in the third quarter of 2015 compared to 58.9 percent in the third quarter of 2014 as a result of decreased promotional activity.
During the third quarter, the company opened two full price stores in Canada, one full price store in Mexico and one U.S. outlet location. The company ended the quarter with 165 company-operated retail locations, including 120 full price stores, 37 outlets, four Internet stores and four joint venture locations in South Africa.
The effective tax rate for the third quarter of 34.1 percent compares to 35.0 percent in the third quarter of the prior year.
Balance Sheet and Cash Flow
During the third quarter of 2015, the company repurchased approximately 763,000 shares of the company’s common stock for $29.7 million.
As of September 30, 2015, cash, cash equivalents, and current and non-current marketable securities totaled $151.2 million.
Based on lower-than-anticipated back half sales in its private label footwear business, the Company has adjusted its sales outlook for fiscal year 2015. The Company now expects that net sales will increase 6 percent to 7 percent over net sales in 2014. The Company continues to expect diluted EPS for fiscal year 2015 to be in the range of $1.85 to $1.95.
The company’s brands include Steve Madden, Dolce Vita, Betsey Johnson, Report, Big Buddha, Brian Atwood, Cejon, Blondo and Mad Love. Steve Madden is also the licensee of various brands, including Superga for footwear in North America.