24 Feb Steve Madden’s Q4 Profits Expand 22 Percent
Steve Madden Inc. reported net income increased in the fourth quarter to $25.7 million, or 43 cents per diluted share, compared to $21.0 million, or 34 cents per diluted share, in the prior year’s fourth quarter.
For the Fourth Quarter 2015:
- Net sales increased 0.5 percent to $344.3 million compared to $342.6 million in the same period of 2014.
- Gross margin expanded 180 basis points to 36.1 percent as compared to 34.3 percent in the same period last year.
- Operating expenses as a percentage of sales were 25.7 percent compared to 25.6 percent of sales in the same period of 2014.
- Operating income totaled $38.7 million, or 11.2 percent of net sales, compared with operating income of $32.0 million, or 9.3 percent of net sales, in the same period of 2014.
- Net income was $25.7 million, or $0.43 per diluted share, compared to $21.0 million, or $0.34 per diluted share, in the prior year’s fourth quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased to have achieved 27 percent growth in diluted EPS in the fourth quarter despite a challenging retail environment and unfavorable weather that negatively impacted sales of seasonal products like boots and cold weather accessories. Our retail business continued its strong performance with a 6.1 percent comparable store sales gain, and we delivered solid gross margin improvement in both our wholesale and retail segments in spite of the headwinds from a heavily promotional retail environment. As we move forward, we are cautious about the overall environment but are pleased with the underlying fundamentals in our business, and we remain confident that the strength of our brands, combined with our proven business model, will enable us to drive meaningful earnings growth over the long term.”
Fourth Quarter 2015 Segment Results
Net sales for the wholesale business were $265.0 million in the fourth quarter of 2015 compared to $269.9 million in the fourth quarter of 2014. Gross margin in the wholesale business increased to 28.2 percent compared to 26.9 percent in last year’s fourth quarter due to improvement in both the wholesale footwear and wholesale accessories segments.
Retail net sales in the fourth quarter were $79.3 million compared to $72.8 million in the fourth quarter of the prior year. Same store sales increased 6.1 percent for the fourth quarter. Retail gross margin increased to 62.3 percent in the fourth quarter of 2015 compared to 61.6 percent in the fourth quarter of 2014 as a result of reduced promotional activity.
During the fourth quarter, the Company opened one full price store in Mexico and three outlet locations in the United States. The Company ended the quarter with 169 company-operated retail locations, including 121 full price stores, 40 outlets, four Internet stores and four joint venture locations in South Africa.
The effective tax rate for the fourth quarter of 2015 was 34.1 percent compared to 35.0 percent in the fourth quarter of the prior year.
Full Year Ended December 31, 2015
For the full year ended December 31, 2015, net sales increased 5.3 percent to $1.4 billion from $1.3 billion in the prior year.
Net income was $112.9 million, or $1.85 per diluted share, for the year ended December 31, 2015. Net income in 2015 included an after-tax net benefit of $2.0 million related to early lease termination of the Company’s 5th Avenue store location as well as an after-tax loss of $2.0 million related to the partial impairment of the Company’s Wild Pair trademark. Net income was $111.9 million, or $1.76 per diluted share, for the year ended December 31, 2014.
Balance Sheet and Cash Flow
During the fourth quarter of 2015, the Company repurchased 959,124 shares of the Company’s common stock for approximately $31.1 million.
As of December 31, 2015, cash, cash equivalents, and current and non-current marketable securities totaled $193.3 million.
For fiscal year 2016, the Company expects that net sales will increase 2 percent to 4 percent over net sales in 2015. Diluted EPS for fiscal year 2016 is expected to be in the range of $1.93 to $2.03.