Steven Madden, Ltd. Announces Second Quarter Results - Total Sales
Grew 17.1% and Same-Store Sales Increased 13.6% - LONG ISLAND CITY,
N.Y., Aug. 2 /PRNewswire-FirstCall/ -- Steven Madden, Ltd.
(NASDAQ:SHOO), a leading designer, wholesaler and marketer of
fashion footwear for women, men and children, today announced
financial results for the second quarter and six months ended June
30, 2005. In line with recently updated expectations, second
quarter net sales increased 17.1% to $101.0 million from $86.2
million in the same period last year. Gross margin increased 20
basis points to 38.1% from 37.9% and operating expenses as a
percent of sales improved to 32.2% versus 32.4% in the comparable
period. This resulted in operating income of $8.7 million, or 8.6%
of sales, versus $6.6 million, or 7.6% of sales, for the same
period last year. Net income increased 29.2% to $5.3 million, or
$0.39 per diluted share, versus $4.1 million, or $0.28 per diluted
share, in the prior year period. Retail revenues during the quarter
increased 23.5% to $32.6 million from $26.4 million in the
comparable period last year. Same-store sales increased 13.6% for
the quarter on top of a 15.2% increase in the second quarter last
year. The Company opened three new stores, ending the quarter with
95 Company-owned retail locations, including the Internet store.
Revenues from the wholesale division, comprised of the Company's
seven brands, Steve Madden Womens, Steve Madden Mens, Stevies,
l.e.i., Steven, Candie's, and UNIONBAY, increased 14.2% to $68.3
million versus $59.8 million in the year-ago period. As previously
announced, wholesale performance reflects particularly strong
results in Madden Mens and improvements in Candie's, as well as
better-than-expected aggregate gross margin for the wholesale
division. "We are quite pleased that both the wholesale and retail
divisions posted double digit sales growth over the prior year
period, signifying broad-based strength in the business," stated
Richard Olicker, President. "Moreover, while we continued to face
certain challenges during the quarter, we were able to deliver
strong product to market, control costs, and improve inventory
management in a number of divisions. This enabled us to make
significant progress in our long-standing and focused effort to
improve overall margins. "During the quarter we also announced the
appointment of Awadhesh Sinha as Chief Operating Officer,
signifying our commitment to even further improving various aspects
of our operations by identifying and executing additional
efficiencies in the business. I look forward to partnering with
Awadhesh and having the benefit of his experience as we work
diligently to drive both top and bottom line growth going forward."
For the first six months of 2005, net sales increased 11.7% to
$184.3 million compared to $165.0 million in the same period last
year. Net income was $6.2 million, or $0.46 per diluted share,
versus $8.2 million, or $0.57 per diluted share, in the comparable
period last year. Arvind Dharia, Chief Financial Officer, said, "We
continue to be very proud of the solid financial foundation that is
in place. Our strong balance sheet boasts $83.8 million in cash,
cash equivalents, and investment securities, no short- or long-term
debt, and $166.4 million in total stockholders' equity." Company
Outlook As previously announced, based on the positive year-to-date
sales trends, coupled with projections for the business in the
second half, the Company currently expects 2005 net sales will
increase in the mid single digits over 2004. With respect to
expectations for earnings per diluted share, initial guidance for
the year assumed an improvement in the second half of 2005 versus
the comparable period in the prior year. Further, the Company
remains cautious about the balance of 2005 and continues to expect
challenges related to sustained margin pressure in the wholesale
and retail businesses. Taking all of these factors into account,
the Company currently anticipates that full year earnings will be
between $0.90 and $0.93 per diluted share. Jamieson Karson,
Chairman and Chief Executive Officer, commented, "We are pleased
with our year-to-date performance and are particularly gratified by
the second quarter. Our results show that we are gaining traction
from a number of key initiatives designed to strengthen and expand
our management team, grow the top line, streamline costs, and
improve margins and profitability. We believe our recent
performance also reflects an excited and re-energized Company in
conjunction with the return of Steve Madden, its founder and
Creative and Design Chief. Steve is an enormous talent in the
fashion industry and is a true inspiration for all of our Company's
employees. We are thrilled to once again be benefiting from his
vision and creative and design expertise. "As we enter the second
half of the year, we will continue to explore ways to further
improve operations, diversify the business, and build the Steve
Madden brand. Specifically, we will expand our retail base by
opening 10 to 12 new stores for the year and will continue to
evaluate potential strategic acquisitions. Additionally, we will
consider additional licenses similar to the recently announced
handbag agreement which is designed to expand our offering and
further validate Steve Madden as a contemporary lifestyle brand."
"For all of these reasons, we are optimistic as we move forward. We
believe our business is better positioned than ever before and we
are confident that we will drive revenue and profitability growth
and deliver enhanced shareholder value over the long-term,"
concluded Mr. Karson. Conference Call Information Interested
shareholders are invited to listen to the second quarter earnings
conference call scheduled for today, Tuesday, August 2, 2005 at
10:00 a.m. Eastern Time. The call will be broadcast live over the
Internet and can be accessed by logging onto: (Please cut and paste
the following link into your browser)
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-
eventDetails&c=113367&eventID=1104622 An online archive of
the broadcast will be available within one hour of the conclusion
of the call and will be accessible until August 16, 2005.
Additionally, a replay of the call can be accessed by dialing (877)
519-4471, pin number 6305899 and will be available through August
4, 2005. Steven Madden, Ltd. designs and markets fashion-forward
footwear for women, men and children. The shoes are sold through
Steve Madden retail stores, department stores, apparel and footwear
specialty stores, and on-line at http://www.stevemadden.com/. The
Company has several licenses for the Steve Madden brand, including
handbags, eyewear, hosiery, and belts, and owns and operates 93
retail stores under its Steve Madden brand and two retail stores
under its Steven brand. The Company is also the licensee for l.e.i.
Footwear, Candie's Footwear and UNIONBAY Men's Footwear. Statements
in this press release that are not statements of historical or
current fact constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties and other unknown factors that could cause the actual
results of the Company to be materially different from the
historical results or from any future results expressed or implied
by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties readers are urged
to consider statements labeled with the terms "believes", "belief",
"expects", "intends", "anticipates" or "plans" to be uncertain and
forward-looking. The forward looking statements contained herein
are also subject generally to other risks and uncertainties that
are described from time to time in the Company's reports and
registration statements filed with the Securities and Exchange
Commission. CONSOLIDATED STATEMENT OF OPERATIONS (in thousands,
except per share data) (unaudited) Three Months Ended Six Months
Ended June 30, June 30, June 30, June 30, 2005 2004 2005 2004 Net
Sales $100,958 $86,234 $184,294 $165,002 Cost of sales 62,448
53,522 117,466 101,018 Gross profit 38,510 32,712 66,828 63,984
Commission and licensing fee income 2,619 1,811 4,566 3,227
Operating expenses 32,472 27,947 61,516 54,055 Income from
operations 8,657 6,576 9,878 13,156 Interest and other income, net
456 475 894 1,009 Income before provision for income tax 9,113
7,051 10,772 14,165 Provision for income tax 3,827 2,961 4,524
5,949 Net income $5,286 $4,090 $6,248 $8,216 Basic income per share
$0.40 $0.31 $0.47 $0.62 Diluted income per share $0.39 $0.28 $0.46
$0.57 Weighted average common shares outstanding - Basic 13,079
13,299 13,154 13,276 Weighted average common shares outstanding -
Diluted 13,475 14,391 13,639 14,382 BALANCE SHEET HIGHLIGHTS (in
thousands) June 30, 2005 Dec 31, 2004 June 30, 2004 Consolidated
Consolidated Consolidated (Unaudited) (Unaudited) Cash and cash
equivalents $38,072 $30,853 $16,287 Investment securities 45,730
49,124 50,994 Total current assets 135,654 121,094 112,506 Total
assets 197,430 186,430 180,573 Total current liabilities 28,613
19,677 12,180 Total stockholder's equity $166,396 $164,665 $166,397
DATASOURCE: Steven Madden, Ltd. CONTACT: Richard Olicker, President
of Steven Madden, Ltd., +1-718-446- 1800; or Investor Relations -
Cara O'Brien, or Media - Melissa Merrill, both of Financial
Dynamics, +1-212-850-5600 Web site: http://www.stevemadden.com/
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