Steve Madden (Nasdaq:SHOO), a leading designer and marketer of
fashion footwear and accessories for women, men and children, today
announced financial results for the fourth quarter and full year
ended December 31, 2014 and provided initial fiscal year 2015 sales
and EPS guidance.
Fourth Quarter 2014
- Net sales were $342.6 million compared
to $342.9 million in the same period of 2013.
- Gross margin was 34.3% as compared to
37.8% in the same period last year.
- Operating expenses as a percentage of
sales were 25.6% compared to 23.2% of sales in the same period of
2013.
- Operating income totaled $32.0 million,
or 9.3% of net sales, compared with operating income of $53.6
million, or 15.6% of net sales, in the same period of 2013.
Operating income in the fourth quarter of 2013 included a $1.0
million benefit related to recovery from the prior year’s text
message litigation settlement. Excluding this benefit, operating
income for the fourth quarter of 2013 was $52.6 million, or 15.4%
of net sales.
- Net income was $21.0 million, or $0.34
per diluted share, compared to $35.7 million, or $0.54 per diluted
share, in the prior year's fourth quarter. Net income for the
fourth quarter of 2013 included the aforementioned benefit. On an
after-tax basis, the benefit positively impacted fourth quarter
2013 by $0.6 million, or $0.01 per diluted share. Excluding this
benefit, net income for the fourth quarter of 2013 was $35.1
million, or $0.53 per diluted share.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, “Fourth quarter 2014 was a tough quarter capping a
difficult year for the Company. Throughout 2014, we were impacted
by a lack of significant fashion footwear trends on which to
capitalize. In the fourth quarter, we faced additional challenges
including production delays on goods from Mexico and slowdowns at
the West Coast ports. While 2014 was a difficult year, we are
excited about the steps we took during 2014 and early in 2015 to
position the Company for future growth. In 2014, we implemented a
new e-commerce platform, acquired two powerful footwear brands in
Dolce Vita and Brian Atwood, and moved to an ownership model in two
important international markets with the acquisition of our Mexican
licensee and the formation of a joint venture in South Africa. In
January 2015, we announced our acquisition of Blondo, which adds an
authentic waterproof boot brand to our portfolio. We believe that
these initiatives will significantly enhance the Company’s
long-term growth prospects.”
Fourth Quarter 2014 Segment Results
Net sales for the wholesale business were $270.9 million in the
fourth quarter compared to $273.4 million in the fourth quarter of
2013. Excluding the results of Dolce Vita, wholesale net sales
decreased 6.3% compared to the prior year period. Gross margin in
the wholesale business decreased to 27.0% compared to 31.8% in last
year’s fourth quarter, due primarily to increased markdown
allowances, the impact from Dolce Vita and higher air freight costs
incurred due to the West Coast port slowdown.
Retail net sales in the fourth quarter were $71.7 million
compared to $69.5 million in the fourth quarter of the prior year.
The increase in net sales was driven by the net opening of 14 new
stores since the end of the fourth quarter last year, partially
offset by a same store sales decrease of 2.3%. Retail gross margin
increased to 61.7% in the fourth quarter of 2014 compared to 61.4%
in the fourth quarter of 2013, as a result of decreased promotional
activity.
During the fourth quarter, the Company opened two full price
stores and four outlet stores, and acquired 21 retail stores with
the acquisition of the Company’s Mexican licensee. The Company
ended the year with 160 company-operated retail locations,
including 32 outlets, four Internet stores and four joint venture
locations in South Africa.
The effective tax rate for the fourth quarter of 35.0% compares
to 34.9% in the fourth quarter of the prior year.
Full Year Ended December 31, 2014
For the full year ended December 31, 2014, net sales increased
1.6% to $1.33 billion from $1.31 billion in the comparable period
last year.
Net income was $111.9 million, or $1.76 per diluted share, for
the year ended December 31, 2014. Net income was $132.0 million, or
$1.98 per diluted share, for the year ended December 31, 2013. Net
income in 2013 included a $1.0 million benefit related to recovery
from the prior year’s text message litigation settlement. Excluding
this benefit, net income for fiscal 2013 was $131.4 million, or
$1.97 per diluted share.
Balance Sheet and Cash Flow
During the fourth quarter of 2014, the Company repurchased
approximately 1.3 million shares of the Company’s common stock for
$40.5 million.
As of December 31, 2014, cash, cash equivalents, and current and
non-current marketable securities totaled $203.1 million.
Company Outlook
For fiscal year 2015, the Company expects that net sales will
increase 7% to 9% over net sales in 2014. Diluted EPS for fiscal
year 2015 is expected to be in the range of $1.85 to $1.95.
Conference Call Information
Interested stockholders are invited to listen to the fourth
quarter earnings conference call scheduled for today, Tuesday,
February 24, 2015, at 8:30 a.m. Eastern Time. The call will be
broadcast live over the Internet and can be accessed by logging
onto http://www.stevemadden.com. An online archive of the broadcast
will be available within one hour of the conclusion of the call and
will be accessible for a period of 30 days following the call.
Additionally, a replay of the call can be accessed by dialing
1-877-870-5176 (U.S.) and 1-858-384-5517 (international), passcode
1279898, and will be available until March 24, 2015.
About Steve Madden
Steve Madden designs, sources and markets fashion-forward
footwear and accessories for women, men and children. In addition
to marketing products under its own brands including Steve Madden®,
Dolce Vita®, Betsey Johnson®, Big Buddha®, Report®, Brian Atwood®,
Cejon®, Blondo®, Wild Pair® and Mad Love®. Steve Madden is the
licensee of various brands, including Superga® for footwear. Steve
Madden also designs and sources products under private label brand
names for various retailers. Steve Madden's wholesale distribution
includes department stores, specialty stores, luxury retailers,
national chains and mass merchants. Steve Madden also operates 160
retail stores (including Steve Madden's four Internet stores).
Steve Madden licenses certain of its brands to third parties for
the marketing and sale of certain products, including for
ready-to-wear, outerwear, intimate apparel, eyewear, hosiery,
jewelry, fragrance, luggage and bedding and bath products. For
local store information and the latest Steve Madden booties, pumps,
men’s and women’s boots, dress shoes, sandals and more, visit
http://www.stevemadden.com/.
Safe Harbor
This press release and oral statements made from time to time by
representatives of the Company contain certain “forward looking
statements” as that term is defined in the federal securities laws.
The events described in forward looking statements may not occur.
Generally these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of the
Company's plans or strategies, projected or anticipated benefits
from acquisitions to be made by the Company, or projections
involving anticipated revenues, earnings or other aspects of the
Company's operating results. The words "may," "will," "expect,"
"believe," "anticipate," "project," "plan," "intend," "estimate,"
and "continue," and their opposites and similar expressions are
intended to identify forward looking statements. The Company
cautions you that these statements concern current expectations
about the Company’s future results and condition and are not
guarantees of future performance or events and are subject to a
number of uncertainties, risks and other influences, many of which
are beyond the Company's control, that may influence the accuracy
of the statements and the projections upon which the statements are
based. Factors which may affect the Company's results include, but
are not limited to, the risks and uncertainties discussed in the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K filed with the Securities and
Exchange Commission. Any one or more of these uncertainties, risks
and other influences could materially affect the Company's results
of operations and financial condition and whether forward looking
statements made by the Company ultimately prove to be accurate and,
as such, the Company's actual results, performance and achievements
could differ materially from those expressed or implied in these
forward looking statements. The Company undertakes no obligation to
publicly update or revise any forward looking statements, whether
as a result of new information, future events or otherwise.
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share amounts) Three Months
Ended Twelve Months Ended
December 31, 2014
December 31, 2013 December 31, 2014
December 31, 2013 Net sales $ 342,620 $ 342,882
$ 1,334,951 $ 1,314,223 Cost of sales 225,125 213,384
865,951 831,847 Gross profit 117,495
129,498 469,000 482,376 Commission and licensing fee income, net
2,262 2,630 13,723 15,632 Operating expenses 87,753 79,488 315,081
295,223 Provision for litigation - (983 ) -
(983 ) Income from operations 32,004 53,623 167,642 203,768
Interest and other income, net 533 1,969
3,751 5,183 Income before provision for income
taxes 32,537 55,592 171,393 208,951 Provision for income taxes
11,379 19,424 58,764 75,666
Net income 21,158 36,168 112,629 133,285 Net income
attributable to noncontrolling interest 165 509
749 1,278 Net income attributable to
Steven Madden, Ltd. $ 20,993 $ 35,659 $ 111,880 $ 132,007
Basic income per share $ 0.35 $ 0.55 $ 1.82 $
2.04 Diluted income per share $ 0.34 $ 0.54 $ 1.76 $ 1.98
Basic weighted average common shares outstanding 60,012 63,565
61,451 64,583 Diluted weighted average common shares outstanding
62,167 66,168 63,676 66,836
STEVEN MADDEN,
LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(In thousands) As of
December 31,
2014 December 31, 2013
Cash and cash equivalents $ 81,450 $ 180,275 Marketable securities
(current & non current) 121,644 111,858 Accounts receivables,
net 194,594 185,423 Inventories 92,677 73,696 Other current assets
41,337 36,660 Property and equipment, net 68,905 56,606 Goodwill
and intangibles, net 294,416 225,695 Other assets 15,243
10,028 Total assets $ 910,266 $ 880,241 Accounts
payable $ 92,635 $ 99,126 Contingent payment liability (current
& non current) 38,633 34,795 Other current liabilities 73,501
44,682 Other long term liabilities 35,968 22,798 Total Steven
Madden, Ltd. stockholders' equity 669,255 678,517 Noncontrolling
interest 274 323 Total liabilities and stockholders'
equity $ 910,266 $ 880,241
STEVEN MADDEN,
LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOW DATA
(In thousands) Twelve Months
Ended
December 31, 2014 December 31, 2013
Net cash provided by operating activities $ 150,771 $
155,453
Investing
Activities
Purchases of property and equipment (18,341 ) (20,746 ) Purchases /
sales of marketable securities, net (8,685 ) (19,635 )
Acquisitions, net of cash acquired
(79,788
) - Net cash used by
investing activities (106,814 ) (40,381 )
Financing
Activities
Common stock share repurchases for treasury (142,227 ) (102,172 )
Payment of contingent liability (8,475 ) (11,481 ) Proceeds from
exercise of stock options 4,942 5,802 Tax benefit from the exercise
of stock options 2,978 4,277 Net cash
used by financing activities (142,782 ) (103,574 ) Net
(decrease) increase in cash and cash equivalents (98,825 ) 11,498
Cash and cash equivalents - beginning of period 180,275
168,777 Cash and cash equivalents - end of period $
81,450 $ 180,275
ICR, Inc.Investor RelationsJean Fontana/Megan Crudele,
203-682-8200www.icrinc.com
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