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 second quarter ended June 30,
2010.
- Second quarter net sales
increased 36.2% to $158.7 million.
- Operating margin reached 20.2%
of sales in the second quarter of 2010, compared with operating
margin of 16.6% in the same period of 2009.
- Second quarter net income
increased 63.0% to $19.8 million, or $0.70 per diluted share,
compared to $12.1 million, or $0.44 per diluted share in the prior
year's second quarter.
- Increase in fiscal 2010 diluted
EPS guidance to a range of $2.45 to $2.55.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, "We are pleased to have reported the highest quarterly
sales and earnings in our Company’s history during our second
quarter 2010. Our performance reflects broad-based strength in our
business, with sales and profitability gains in the wholesale
footwear, wholesale accessories and retail segments. We believe
that our ability to deliver outstanding top and bottom line growth
in a difficult retail environment demonstrates the strength of our
business model and the creativity of Steve and our design team as
they consistently deliver on-trend product that drives consumer
demand. We are confident in our belief that the strength in our
core business combined with the growth opportunities from some of
our new businesses position us to achieve our long term goal of
doubling EPS by 2014.”
Second Quarter 2010 Results
Second quarter net sales were $158.7 million compared to $116.5
million reported in the comparable period of 2009. Net sales from
the wholesale business were $129.2 million compared to $88.2
million in the second quarter of 2009, a 46.5% increase driven by
sales increases across all existing divisions as well as
contributions from our recent acquisitions, Madden Zone and Big
Buddha, and our new men’s brand, Madden. Sales also benefitted from
the transition of one of the Company's mass merchant customers from
a buying agency model to a selling agency model. Retail net sales
grew 4.2% to $29.5 million compared to $28.3 million in the second
quarter of the prior year despite a smaller store base. Same store
sales increased 7.4%.
Gross margin improved to 43.4% in the second quarter from 42.6%
in the comparable period of 2009, reflecting margin improvement in
both the wholesale and retail segments. Gross margin in the
wholesale business increased to 38.7% in the second quarter from
36.8% in the prior year's second quarter driven primarily by
improvement in our accessories division as a result of fewer
markdown allowances and the addition of the higher margin Big
Buddha business. Retail gross margin increased to 63.9% for the
second quarter from 60.4% in the comparable period of the prior
year as a result of less discounting.
Operating expenses as a percent of sales declined to 26.5% for
the second quarter compared to 32.2% in the same period of the
prior year, due to leverage on increased sales.
Operating income for the second quarter increased to $32.1
million, or 20.2% of net sales, compared with operating income of
$19.4 million, or 16.6% of net sales, in the same period of
2009.
Net income increased 63.0% to $19.8 million, or $0.70 per
diluted share, in the second quarter compared to $12.1 million, or
$0.44 per diluted share in the prior year’s second quarter.
During the second quarter of 2010, the Company closed one store,
ending the quarter with 84 retail locations, including the Internet
store.
Six-Month 2010 Results
For the first six months of 2010, net sales were $290.3 million
compared to $223.9 million in the comparable period last year.
Net income was $35.2 million, or $1.25 per diluted share, for
the first six months of 2010 compared to $18.7 million or $0.69 per
diluted share in the first six months of 2009.
At the end of the second quarter, cash, cash equivalents and
marketable securities totaled $164.0 million.
Arvind Dharia, Chief Financial Officer, commented, "We continue
to maintain a healthy balance sheet through consistently solid
financial performance combined with prudent capital
management.”
Company Outlook
For fiscal 2010, the Company now expects sales to increase 22% –
24%. Diluted EPS is now expected to be in the range of $2.45 –
$2.55, compared to previous guidance of diluted EPS in the range of
$2.30 – $2.40.
Conference Call Information
As previously announced, interested stockholders are invited to
listen to the second quarter earnings conference call scheduled for
today, Thursday, July 29, 2010, 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 888-203-1112, passcode 7312154, and will be available until
August 29, 2010.
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 owned brands including Steve
Madden, Steven by Steve Madden, Madden Girl and Big Buddha, the
Company is the licensee of various brands, including Olsenboye for
footwear, handbags and belts, Elizabeth and James and l.e.i. for
footwear, Betsey Johnson for handbags and belts and Daisy Fuentes
for handbags. The Company also designs and sources products under
private label brand names for various retailers. The Company’s
wholesale distribution includes department stores, specialty
stores, luxury retailers, national chains and mass merchants. The
Company also operates 84 retail stores (including the Company’s
online store). The Company licenses certain of its brands to third
parties for the marketing and sale of certain products, including
for ready-to-wear, outerwear, cold weather accessories, eyewear,
hosiery, jewelry and bedding and bath products.
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 forward-looking statements and the projections upon which
the forward-looking statements are based. Factors that 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 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30,
2010 June 30, 2009 June 30, 2010
June 30, 2009
(Unaudited)
(Unaudited)
Net sales $ 158,664 $ 116,472 $ 290,272 $ 223,901 Cost of sales
89,815 66,909 161,486 130,851 Gross
profit 68,849 49,563 128,786 93,050 Commission and licensing fee
income, net 5,229 7,362 11,413 10,267 Operating expenses
42,025 37,553 83,287 73,641 Income from
operations 32,053 19,372 56,912 29,676 Interest and other income,
net 942 368 1,726 764 Income before
provision for income taxes 32,995 19,740 58,638 30,440 Provision
for income taxes 13,196 7,596 23,454
11,719 Net income $ 19,799 $ 12,144 $ 35,184 $ 18,721
Basic income per share $ 0.72 $ 0.45 $ 1.28 $ 0.70 Diluted income
per share $ 0.70 $ 0.44 $ 1.25 $ 0.69 Weighted average
common shares
outstanding - Basic 27,628 27,021
27,542 26,928 Weighted average common shares
outstanding -
Diluted 28,303 27,441 28,229
27,200
STEVEN MADDEN
LTD.
CONSOLIDATED BALANCE SHEET
HIGHLIGHTS
(In thousands) June 30, 2010 Dec 31 2009 June
30, 2009
(Unaudited)
(Unaudited)
Cash and cash equivalents $ 42,807 $ 69,266 $ 53,276
Marketable securities (Current & non current) 121,155 85,684
58,359 Total current assets 216,857 191,369 166,426 Total assets
401,354 326,859 282,884 Total current liabilities 75,379 52,362
48,395 Total liabilities 94,183 59,072 53,631 Total stockholders'
equity 307,171 267,787 229,253
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