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,
2011.
- Second quarter net sales increased
31.8% to $209.2 million.
- Retail comparable store sales increased
11.6% for the second quarter.
- Second quarter net income increased
20.1% to $23.8 million, or $0.55 per diluted share, compared to
$19.8 million, or $0.47 per diluted share in the prior year’s
second quarter, adjusted for a three-for-two stock split payable to
shareholders of record on May 20, 2011.
- Increase in fiscal 2011 diluted EPS
guidance to a range of $2.15 to $2.20.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, "Our second quarter results reflect solid execution
across the Company. Our flagship Steve Madden brand led the way, as
the trend-right merchandise created by Steve and his design team
resulted in strong gains in the Steve Madden Women’s Wholesale,
Retail and International divisions. In addition, we further
enhanced our footwear and accessories offerings in the quarter with
the acquisitions of Topline and Cejon, both completed in May. We
believe that the continued momentum in our core business, combined
with the expansion opportunities in our newer businesses, sets the
stage for long term sales and earnings growth for the Company.”
Second Quarter 2011 Results
Second quarter net sales were $209.2 million compared to $158.7
million reported in the comparable period of 2010. Net sales from
the wholesale business rose 35.6% to $175.2 million from $129.2
million in the second quarter of 2010. The growth was primarily
driven by (i) strong gains in the Steve Madden Women’s and
International businesses; (ii) the transition of the Company's
Target private label and Olsenboye footwear businesses from the
buying agency model to the wholesale model; and (iii) net sales
contributions from the recent acquisitions, Topline and Cejon, both
completed in May. Retail net sales grew 15.3% to $34.0 million from
$29.5 million in the second quarter of the prior year. Same store
sales increased 11.6% following a 7.4% increase in the prior year’s
second quarter. The Company opened 1 full-price store and 1 outlet
store, acquired 1 Report store in the Topline acquisition, and
closed 3 stores in the quarter.
Gross margin was 40.2% in the second quarter as compared to
43.4% in the comparable period of 2010. Gross margin in the
wholesale business was 35.4% in the second quarter as compared to
38.7% in the prior year's second quarter, with the decrease due to
sales mix shifts as a result of the inclusion of the Company’s
Target private label footwear business in net sales and the
addition of the Topline business, which is largely private label
and therefore carries a lower gross margin than the rest of our
wholesale business. Excluding these businesses, gross margin in the
wholesale business would have been moderately higher in the second
quarter as compared to the second quarter of last year. Retail
gross margin increased to 64.8% for the second quarter from 63.9%
in the comparable period of the prior year as a result of more
full-price selling and reduced discounting.
Operating expenses as a percent of sales were 24.5% for the
second quarter compared to 26.5% in the same period of the prior
year, due to leverage on increased sales.
Operating income for the second quarter was $37.2 million, or
17.8% of net sales, compared with operating income of $32.1
million, or 20.2% of net sales, in the same period of 2010.
Net income increased 20.1% to $23.8 million, or $0.55 per
diluted share, in the second quarter compared to $19.8 million, or
$0.47 per diluted share in the prior year’s second quarter,
adjusted for a three-for-two stock split payable to shareholders of
record on May 20, 2011.
The Company ended the quarter with 83 retail locations,
including the Company’s Internet store.
Six-Month 2011 Results
For the first six months of 2011, net sales increased 29.2% to
$374.9 million from $290.3 million in the comparable period last
year.
Net income was $41.6 million, or $0.97 per diluted share, for
the first six months of 2011 compared to $35.2 million or $0.83 per
diluted share in the first six months of 2010, adjusted for a
three-for-two stock split payable to shareholders of record on May
20, 2011.
At the end of the second quarter, cash, cash equivalents and
marketable securities totaled $132.2 million.
Arvind Dharia, Chief Financial Officer, commented, "Our strong
financial performance and prudent capital management has enabled us
to make strategic investments while maintaining a strong balance
sheet.”
Company Outlook
For fiscal 2011, the Company now expects net sales to increase
47 – 49% compared to 2010. Diluted EPS is now expected to be in the
range of $2.15 – $2.20, compared to previous guidance of diluted
EPS in the range of $2.03 – $2.10.
Conference Call Information
As previously announced, interested stockholders are invited to
listen to the second quarter earnings conference call scheduled for
today, Tuesday, August 2, 2011, 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 877-870-5176, passcode 4439336, and will be available until
September 2, 2011.
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, Stevies, Betsey
Johnson, Betseyville, Report, Report Signature, R2 by Report and
Big Buddha, the Company is the licensee of various brands,
including Olsenboye for footwear, handbags and belts, Elizabeth and
James, Superga, l.e.i. and GLO for footwear 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 83 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, intimate apparel, eyewear, hosiery,
jewelry, fragrance 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 AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(Unaudited) (In thousands, except per share amounts) Three
months ended Six Months Ended Jun 30, 2011 Jun 30, 2010 June 30,
2011 June 30,2010 Net sales $ 209,152 $ 158,664 $ 374,907 $
290,272 Cost of sales
125,057
89,815 221,680 161,486 Gross profit
84,095 68,849 153,227 128,786 Commission and licensing fee income,
net 4,432 5,229 8,999 11,413 Operating expenses
51,339 42,025 97,583 83,287
Income from operations 37,188 32,053 64,643 56,912 Interest and
other income, net
1,656 942 3,173
1,726 Income before provision for income taxes 38,844 32,995
67,816 58,638 Provision for income taxes 15,149
13,196 26,269 23,454 Net income 23,695 19,799 41,547
35,184 Net loss attributable to noncontrolling interest 89
- 89 - Net income attributable to Steven
Madden, Ltd $ 23,784 $ 19,799 $ 41,636 $ 35,184 Basic
income per share $ 0.56 $ 0.48 $ 0.99 $ 0.85 Diluted income per
share $ 0.55 $ 0.47 $ 0.97 $ 0.83 Weighted average common
shares outstanding - Basic 42,156 41,442
42,053 41,313 Weighted average common shares outstanding -
Diluted 43,259 42,455 43,025 42,344
STEVEN MADDEN,
LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA (In thousands)
Jun 30, 2011 Dec 31, 2010 Jun 30, 2010 (Unaudited)
(Unaudited) Cash and cash equivalents $ 31,261 $ 66,151 $
42,807 Marketable securities (current & non current) 100,937
127,606 121,155 Receivables, net 160,606 70,948 85,087 Inventories
67,723 39,557 44,466 Other current assets 19,285 20,122 22,525
Property and equipment, net 25,896 20,791 21,297 Goodwill and
intangibles, net 172,364 81,275 51,444 Other assets 18,205
21,246 12,573 Total assets $ 596,277 $
447,696 $ 401,354 Accounts payable $ 96,208 $ 37,089 $
44,309 Contingent payment liability - current portion 5,899 - -
Other current liabilities 39,203 34,342 31,070 Contingent payment
liability 36,904 12,372 12,000 Other long term liabilities 5,915
6,595 6,804 Total Steven Madden, Ltd stockholders' equity 412,237
357,298 307,171 Noncontrolling interest (89 ) -
- Total liabilities and stockholders' equity $ 596,277
$ 447,696 $ 401,354
STEVEN MADDEN,
LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW
DATA
(Unaudited) (In thousands) Six months ended Jun 30, 2011 Jun
30, 2010 Net cash provided by operating activities $
21,894 $ 20,851
Investing
Activities
Purchase of property and equipment (5,973 ) (1,232 ) Purchases /
sales of marketable securities, net 27,097 (34,825 ) Acquisitions,
net of cash acquired
(85,234 )
(11,119 ) Net cash used in
investing activities (64,110 ) (47,176 ) Net cash provided
(used) in financing activities 7,326 (134 ) Net
decrease in cash and cash equivalents (34,890 ) (26,459 )
Cash and cash equivalents at the beginning of the period 66,151
69,266 Cash and cash equivalents at the end of the
period $ 31,261 $ 42,807
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