SHOO Steven Madden Ltd

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/

Copyright