- Third Quarter Net Income of $11.1 Million, or $0.62 Per Diluted
Share - LONG ISLAND CITY, N.Y., Nov. 6 /PRNewswire-FirstCall/ --
Steve Madden (NASDAQ:SHOO), a leading designer, wholesaler and
marketer of fashion footwear and accessories for women, men and
children, today announced financial results for the third quarter
ended September 30, 2008. Third quarter net sales increased 13.0%
to $128.1 million compared to $113.4 million in the third quarter
of 2007. Gross margin increased slightly to 41.4% compared to 41.3%
in the third quarter of the prior year reflecting a modest margin
increase in the wholesale division and a flat margin in the retail
division. Operating expenses as a percent of sales improved to
31.0% versus 33.8% in the same period of 2007. Excluding a one-time
charge of $1.2 million related to a provision for prior year
customs duties, operating expenses were 32.8% of sales in the 2007
third quarter. The improvement is due primarily to the Company's
ability to leverage its expense structure against increased sales
during the quarter. Operating income increased to $17.7 million, or
13.8% of sales, compared with operating income of $12.8 million, or
11.3% of sales, in the third quarter of 2007. Excluding the
aforementioned one-time charge, operating income for the 2007
quarter was $14.0 million, or 12.4% of sales. Net income was $11.1
million, or $0.62 per diluted share, compared to $11.0 million, or
$0.52 per diluted share, in the prior year's third quarter.
Excluding the one-time charge for prior-year customs duties of
$0.03 per diluted share, as well as a one-time gain of $2.9
million, or $0.13 per diluted share, resulting from tax savings
related to prior periods, net income for the third quarter of 2007
was $8.8 million, or $0.42 per diluted share. Revenues from the
wholesale business increased 13.2% to $97.3 million from $86.0
million in the third quarter of 2007 due primarily to the strength
of the Madden Girl, Daniel M. Friedman, and Steve Madden Women's
divisions, which offset relative softness in the Steve Madden Men's
segment during the quarter. Gross margin in the wholesale business
increased slightly to 36.3% from 36.2% in last year's third
quarter. Retail revenues increased 12.2% to $30.7 million from
$27.4 million in the third quarter of the prior year due to strong
performance with boots and sandals. Same store sales increased 7.8%
during the quarter. Retail gross margin was flat with the
comparable period of the prior year at 57.4%. During the third
quarter of 2008, the Company opened two stores and closed one
underperforming location. For the first nine months of fiscal 2008,
net sales were $338.0 million compared to $328.3 million in the
comparable period last year. Net income totaled $20.8 million, or
$1.11 per diluted share, for the first nine months of fiscal 2008,
compared to $31.0 million, or $1.43 per diluted share, in the
comparable period last year. Excluding a one-time after-tax charge
of $3.0 million in first quarter resulting from the resignation of
the Company's former Chief Executive Officer, net income totaled
$23.8 million, or $1.27 per diluted share, for the first nine
months of fiscal 2008. Excluding the aforementioned one-time items
recorded in the 2007 third quarter, net income in the first nine
months of 2007 totaled $28.9 million, or $1.34 per diluted share.
Edward Rosenfeld, Chairman and Chief Executive Officer, stated, "We
are encouraged by our third quarter performance, as we gained
momentum despite an increasingly challenging environment. In
addition to continued strong performance from our Madden Girl and
Daniel M. Friedman segments, we are very pleased to have achieved
double-digit percentage net sales gains in our core Steve Madden
Women's and Steven segments in our wholesale division, as well as
in our Retail division. We also successfully transitioned our
Candie's business to a new team and a "first cost" operating model
during the quarter, and we believe that this division will quickly
realize improved returns. We are continuing to receive positive
reactions to our products from both wholesale customers and
consumers, as Steve and his talented design team remain focused on
creating exceptional, fashion-forward products." Arvind Dharia,
Chief Financial Officer, commented, "We have continued to prudently
manage the business throughout the year and maintained a very
strong financial position which contributes to our ability to
navigate the current economic environment. Our balance sheet
continues to be pristine, as we ended the quarter with $56.7
million in cash, cash equivalents, and marketable securities, no
debt, and total stockholders' equity of $198.9 million. We remain
confident the Company is well positioned financially." Company
Outlook Based on trends to date this year and current visibility,
the Company is raising its guidance for the full fiscal year. The
Company now expects 2008 net sales will increase 5% to 6% compared
to fiscal 2007 and earnings per diluted share will range between
$1.65 and $1.70, excluding the previously mentioned impact of the
one-time charge recognized in first quarter. Including the impact
of the one-time charge, earnings per diluted share are expected to
range between $1.49 and $1.54. Mr. Rosenfeld concluded, "The
Company is experiencing positive trends heading into the end of
2008. We are encouraged by our recent performance and believe that
Steve Madden is well positioned to continue capitalizing on current
and emerging footwear trends. However, we are certainly not immune
to the fluctuations in the economy and are keeping a close watch on
issues affecting consumers and the retail industry as a whole. We
remain cautiously optimistic about the fourth quarter and full
year, and are maintaining our conservative approach to managing the
business through this volatile period in the retail industry."
Conference Call Information Interested shareholders are invited to
listen to the third quarter earnings conference call scheduled for
today, Thursday, November 6, 2008, at 10 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 until November 19, 2008.
Additionally, a replay of the call can be accessed by dialing
800-642-1687, passcode 70083519, and will be available until
November 12, 2008. Steve Madden designs and markets fashion-forward
footwear and accessories for women, men and children. The shoes and
accessories are sold through company-owned retail stores,
department stores, apparel and footwear specialty stores, and
online at http://www.stevemadden.com/. The Company has several
licensees for its brands, including for outerwear, cold weather
accessories, eyewear, and hosiery and owns and operates 99 retail
stores, including its online store. The Company is the licensee for
footwear, handbags and belts for Fabulosity, for footwear for
Elizabeth and James and l.e.i. and for handbags and belts for
Betsey Johnson, Daisy Fuentes and Tracy Reese. This press release
contains forward looking statements as that term is defined in the
federal securities laws. The events described in forward looking
statements contained in this press release 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 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 for the year ended December 31, 2007. Any one or more of
these uncertainties, risks and other influences could materially
affect the Company's results of operations and whether forward
looking statements made by the Company ultimately prove to be
accurate. 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 from new information, future events or
otherwise. STEVEN MADDEN, LTD. CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data) - Unaudited Three Months
Ended Nine Months Ended Consolidated: Sep 30, 2008 Sep 30, 2007 Sep
30, 2008 Sep 30, 2007 Net Sales $128,093 $113,395 $337,949 $328,305
Cost of Sales 75,114 66,577 199,218 193,873 Gross Profit 52,979
46,818 138,731 134,432 Commission and licensing fee income 4,497
4,335 11,056 15,450 Operating Expenses 39,770 38,352 117,097
103,922 Income from Operations 17,706 12,801 32,690 45,960 Interest
and other Income, Net 248 671 1,142 2,384 Income Before provision
for Income Taxes 17,954 13,472 33,832 48,344 Provision for Income
Tax 6,866 2,533 13,058 17,354 Net Income $11,088 $10,939 $20,774
$30,990 Basic income per share $0.62 $0.52 $1.12 $1.49 Diluted
income per share $0.62 $0.52 $1.11 $1.43 Weighted average common
shares outstanding - Basic 17,763 20,863 18,478 20,832 Weighted
average common shares outstanding - Diluted 17,986 21,219 18,675
21,607 BALANCE SHEET HIGHLIGHTS Sep 30, 2008 Dec 31, 2007 Sep 30,
2007 Consolidated Consolidated Consolidated (Unaudited) (Unaudited)
Cash and cash equivalents $33,115 $29,446 $24,632 Investment
Securities 23,554 80,411 54,548 Total Current Assets 175,996
168,855 184,953 Total Assets 246,296 266,521 257,748 Total Current
Liabilities 42,824 47,717 44,348 Total Stockholder Equity 198,864
215,334 209,975 DATASOURCE: Steve Madden CONTACT: Investors: Cara
O'Brien or Leigh Parrish, or Media: Diane Zappas, all of FD,
+1-212-850-5600 Web site: http://www.stevemadden.com/
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