Steven Madden, Ltd. Announces Third Quarter and Nine Month Results
LONG ISLAND CITY, N.Y., Oct. 26 /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 third quarter and nine months
ended September 30, 2004. For the third quarter, sales were $88.6
million compared to $88.7 million in the year-ago period. Operating
income was $5.9 million versus $11.7 million in the third quarter
of 2003. The decrease was a result of higher cost of goods sold as
a percentage of sales, sustained overall markdown pressure, and
higher operating expenses primarily associated with occupancy costs
from an increased retail store base. Net income was $3.7 million,
or $0.26 per diluted share, compared to $7.1 million, or $0.50 per
diluted share, in the prior year period. Retail revenues for the
third quarter increased 3.0% to $23.8 million from $23.1 million in
the same period of 2003. Same-store sales were flat versus a
decrease of 4.9% last year. The Company opened 7 new stores during
the quarter, ending the period with 90 company-owned retail
locations, including the Internet store, and remains on schedule to
open a total of approximately 8 to 12 new stores in 2004. Revenues
from the wholesale business, comprised of the Company's seven
brands, Steve Madden Womens, Steve Madden Mens, Stevies, l.e.i.,
Steven, UNIONBAY, and Candie's, were $64.9 million for the third
quarter compared with $65.6 million in the prior year period. The
wholesale business and the Company's overall margins were
significantly impacted by an increase in cost of goods sold due to
pricing pressure from both wholesale customers and suppliers.
Additionally, the l.e.i. division, in particular, continued to face
greater than expected pressure due to weak sales combined with a
demanding markdown environment. "Despite challenges related to a
late breaking back-to-school selling season, lackluster early boot
selling, and hurricanes in the southeast, our retail stores
delivered stable results as evidenced by a 3.0% increase in sales
and store productivity reflected in sales of $635 per square foot,"
commented Richard Olicker, President and Chief Operating Officer.
"Of note, we opened 7 stores in prime locations during the quarter
and intend to further expand this profitable segment of our
business. With respect to wholesale, a scenario of weak sales and
high markdown levels was especially acute within the l.e.i.
division. This not only diluted our overall gross profit by
approximately $1 million but also significantly impacted our
operating margin. We are diligently working to improve the
profitability of l.e.i. and our other brands by reducing expenses
across select divisions in the Company." For the first nine months
of 2004, sales were $253.6 million compared to $253.1 million for
the same period in 2003. Net income was $11.9 million, or $0.83 per
diluted share, versus $17.9 million, or $1.27 per diluted share, in
the comparable period last year. Arvind Dharia, Chief Financial
Officer, said, "With $68.5 million in cash, cash equivalents, and
investment securities, no short- or long-term debt, and $166.7
million in total stockholder equity, our balance sheet remains
strong." Company Outlook Based on current visibility, the Company
expects continued markdown and gross margin pressure in both its
wholesale and retail businesses for the remainder of the year. In
addition, given trends to date in the fourth quarter, the Company
anticipates soft consumer demand for its l.e.i., Stevies, and
UNIONBAY brands. Finally, the Company believes other income growth
will moderate at least through the end of the year. Taking the
above factors into account, the Company is updating its previously
announced expectations for 2004. While reiterating its expectation
of a total annual sales increase of low single digits over 2003,
the Company now anticipates annual diluted earnings per share of
$0.86 to $0.88. Jamieson Karson, Chairman and Chief Executive
Officer, concluded, "Despite facing very challenging circumstances,
we take comfort in the viability of our superior brand equity,
unique business model, and pristine balance sheet. We are confident
not only in this strong foundation but also in the Company's
long-term prospects, as evidenced by our repurchase of
approximately 198,000 shares this quarter and a total of
approximately 283,200 shares over the past six months. "Using our
cash balance productively and maximizing shareholder value remain
among our very top priorities. Specifically, during the quarter we
expanded our productive and profitable retail store base and opened
several new concept shops that build our brand awareness and drive
sales at wholesale doors. In addition, we further extended our
international presence by beginning distribution in Australia, a
market which holds great promise for the fashion-forward Steve
Madden brand. Finally, we continue to thoroughly evaluate options
to diversify our business through licensing opportunities and
strategic acquisitions. All of these initiatives are part of our
ongoing efforts to drive profitability and enhance shareholder
value for the long- term." Conference Call Interested shareholders
are invited to listen to the third quarter earnings conference call
scheduled for today, Tuesday, October 26, 2004, 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 9,
2004. Additionally, a replay of the call can be accessed by dialing
(877) 519-4471, pin number 5309992, and will be available until
October 28, 2004. Steven Madden, Ltd. 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 and Stevies brands, including eyewear, hosiery,
and belts, owns and operates one retail store under its Steven
brand, and is 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. (tables follow) CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data) - Unaudited Three Months
Ended Nine Months Ended Sep 30, Sep 30, Sep 30, Sep 30,
Consolidated: 2004 2003 2004 2003 Net Sales 88,610 88,663 253,612
253,105 Cost of Sales 57,160 53,067 158,178 154,236 Gross Profit
31,450 35,596 95,434 98,869 Commission and licensing fee income
1,702 2,205 4,929 6,040 Operating Expenses 27,285 26,094 81,340
75,324 Income from Operations 5,867 11,707 19,023 29,585 Interest
and other Income, Net 488 426 1,497 1,218 Income Before provision
for Income Taxes 6,355 12,133 20,520 30,803 Provision for Income
Tax 2,669 5,060 8,618 12,901 Net Income 3,686 7,073 11,902 17,902
Basic income per share 0.28 0.54 0.90 1.38 Diluted income per share
0.26 0.50 0.83 1.27 Weighted average common shares outstanding -
Basic 13,177 13,073 13,243 12,930 Weighted average common shares
outstanding - Diluted 14,220 14,267 14,328 14,061 BALANCE SHEET
HIGHLIGHTS Sep 30, 2004 Dec 31,2003 Sep 30, 2003 Consolidated
Consolidated Consolidated (Unaudited) (Unaudited) Cash and cash
equivalents 18,128 53,073 34,180 Investment Securities 50,408
32,659 44,409 Total Current Assets 112,445 121,995 109,544 Total
Assets 181,154 177,870 170,518 Total Current Liabilities 12,264
16,855 15,406 Total Stockholder Equity 166,749 159,187 153,398
DATASOURCE: Steven Madden, Ltd. CONTACT: Richard Olicker, President
& Chief Operating Officer, or Arvind Dharia, Chief Financial
Officer, both of Steven Madden, Ltd., +1-718-446-1800; or Investor
Relations, Cara O'Brien, or Lila Sharifian, or Press, Melissa
Merrill, all of Financial Dynamics, +1-212-850-5600, for Steven
Madden, Ltd. Web site: http://www.stevemadden.com/
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