0000913241 false 0000913241 2023-08-02 2023-08-02 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report: August 2, 2023

(Date of earliest event reported)

 

STEVEN MADDEN, LTD.

(Exact name of registrant as specified in its charter)

 

Delaware   000-23702   13-3588231

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

52-16 Barnett Avenue, Long Island City, New York   11104
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (718) 446-1800

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   SHOO   The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 
 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 2, 2023, Steven Madden, Ltd. (the “Company”) issued a press release, furnished as Exhibit 99.1 and incorporated into this Item 2.02 by reference, announcing the Company’s financial results for the second quarter of its fiscal year ending December 31, 2023.

 

Item 8.01 Other Events.

 

The Company’s press release on August 2, 2023 also announced that the Company’s Board of Directors has declared a quarterly cash dividend of $0.21 per share on the Company’s outstanding shares of common stock. The dividend is payable on September 25, 2023 to stockholders of record as of the close of business on September 15, 2023.

 

The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in Item 2.02 of this Current Report is not intended to, and does not, constitute a determination or admission by the Company that the information in Item 2.02 of this Current Report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
99.1   Press Release, dated August 2, 2023, announcing the Company’s 2023 Second Quarter Results and Declaration of a Cash Dividend.
     
104   Cover Page Interactive Data File (formatted as Inline XBRL).

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 2, 2023

 

  STEVEN MADDEN, LTD.
     
  By: /s/ Edward Rosenfeld
  Name:  Edward Rosenfeld
  Title: Chief Executive Officer

 

 

 

 

 

Exhibit 99.1

 

Steve Madden Announces Second Quarter 2023 Results

 

LONG ISLAND CITY, N.Y., August 2, 2023 – Steven Madden, Ltd. (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children, today announced financial results for the second quarter ended June 30, 2023.

 

Amounts referred to as “Adjusted” are non-GAAP measures that exclude the items defined as “Non-GAAP Adjustments” in the “Non-GAAP Reconciliation” section.

 

Second Quarter 2023 Results

 

Revenue decreased 16.8% to $445.3 million compared to $535.0 million in the same period of 2022.
Gross profit as a percentage of revenue was 42.6% compared to 40.7% in the same period of 2022.
Operating expenses as a percentage of revenue were 32.7% compared to 28.5% in the same period of 2022. Adjusted operating expenses as a percentage of revenue were 32.6% compared to 28.2% in the same period of 2022.
Income from operations totaled $44.0 million, or 9.9% of revenue, compared to $65.2 million, or 12.2% of revenue, in the same period of 2022. Adjusted income from operations totaled $44.5 million, or 10.0% of revenue, compared to $67.0 million, or 12.5% of revenue, in the same period of 2022.
Net income attributable to Steven Madden, Ltd. was $34.5 million, or $0.46 per diluted share, compared to $48.5 million, or $0.62 per diluted share, in the same period of 2022. Adjusted net income attributable to Steven Madden, Ltd. was $34.9 million, or $0.47 per diluted share, compared to $49.8 million, or $0.63 per diluted share, in the same period of 2022.

 

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased to deliver earnings results in line with expectations for the second quarter despite the challenging operating environment. Our performance in the quarter reflects our disciplined control of inventory and expenses, even as we continue to invest in product innovation, consumer engagement and our long-term growth initiatives. While the retail environment remains choppy, we are confident that the power of our brands and the strength of our business model position us for sustainable growth and value creation over the long term.”

 

Second Quarter 2023 Channel Results

 

Revenue for the wholesale business was $314.6 million, a 20.8% decrease compared to the second quarter of 2022, including a 19.4% decrease in wholesale footwear revenue and a 24.6% decrease in wholesale accessories/apparel revenue. Gross profit as a percentage of wholesale revenue increased to 33.6% compared to 31.6% in the second quarter of 2022 driven by margin improvement in the wholesale accessories/apparel segment.

 

Direct-to-consumer revenue was $128.2 million, a 5.4% decrease compared to the second quarter of 2022 driven by declines in both the brick-and-mortar and e-commerce businesses. Gross profit as a percentage of direct-to-consumer revenue was 63.7% compared to 66.4% in the second quarter of 2022 driven by increased promotional activity.

 

The Company ended the quarter with 242 brick-and-mortar retail stores and five e-commerce websites, as well as 22 company-operated concessions in international markets.

 

 

 

 

Balance Sheet and Cash Flow Highlights

 

As of June 30, 2023, cash, cash equivalents and short-term investments totaled $274.4 million. Inventory totaled $207.8 million, a 32.2% decrease compared to the second quarter of 2022.

 

During the second quarter of 2023, the Company spent approximately $25.8 million on repurchases of its common stock, which includes shares acquired through the net settlement of employees’ stock awards.

 

Quarterly Cash Dividend

 

The Company’s Board of Directors approved a quarterly cash dividend of $0.21 per share. The dividend is payable on September 25, 2023 to stockholders of record as of the close of business on September 15, 2023.

 

2023 Outlook

 

For 2023, the Company continues to expect revenue will decrease 6.5% to 8.0% compared to 2022. The Company expects diluted EPS will be in the range of $2.38 to $2.48. The Company continues to expect Adjusted diluted EPS will be in the range of $2.40 to $2.50.

 

Conference Call Information

 

Interested stockholders are invited to listen to the conference call scheduled for today, August 2, 2023, at 8:30 a.m. Eastern Time, which will include a discussion of the Company’s second quarter 2023 earnings results and 2023 outlook. The call will be webcast live on the Company’s website at https://investor.stevemadden.com. A webcast replay of the conference call will be available on the Company’s website or via the following webcast link https://edge.media-server.com/mmc/p/oqycft6w beginning today at approximately 10:00 a.m. Eastern Time.

 

About Steve Madden

 

Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo® and GREATS®, Steve Madden licenses footwear and handbag categories for the Anne Klein® brand. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers and independent stores. Steve Madden also directly operates brick-and-mortar retail stores and e-commerce websites. Steve Madden also licenses certain of its brands to third parties for the marketing and sale of certain products in the apparel, accessory and home categories. For local store information and the latest sandals, dress shoes, fashion sneakers, boots, booties and more, please visit www.stevemadden.com, www.dolcevita.com and our other branded websites.

 

 

 

 

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995

 

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, “estimate”, or “confident” and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations, and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:

 

  the Company’s ability to navigate shifting macro-economic environments, including but not limited to, inflation and the potential for recessionary conditions;
  the Company’s ability to accurately anticipate fashion trends and promptly respond to consumer demand;
  the Company’s ability to compete effectively in a highly competitive market;
  the Company’s ability to adapt its business model to rapid changes in the retail industry;
  supply chain disruptions to product delivery systems and logistics, and the Company’s ability to properly manage inventory;
  the Company’s reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as their ability to meet the Company’s quality standards;
  the Company’s dependence on the retention and hiring of key personnel;
  the Company’s ability to successfully implement growth strategies;
  changes in trade policies and tariffs imposed by the United States government and the governments of other nations in which the Company manufactures and sells products;
  the Company’s ability to adequately protect its trademarks and other intellectual property rights;
  the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or a pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
  legal, regulatory, political and economic risks that may affect the Company’s sales in international markets;
  changes in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial results;
  additional tax liabilities resulting from audits by various taxing authorities;
  cybersecurity risks and costs of defending against, mitigating, and responding to data security threats and breaches impacting the Company;
  the Company’s ability to achieve operating results that are consistent with prior financial guidance; and
  other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

 

The Company does not undertake, and disclaims, any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments, or otherwise.

 

 

 

 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

 

   Three Months Ended   Six Months Ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
                 
Net sales  $442,837   $532,680   $904,574   $1,090,024 
Commission and licensing fee income   2,465    2,309    4,562    4,699 
Total revenue   445,302    534,989    909,136    1,094,723 
Cost of sales   255,432    317,224    524,174    649,060 
Gross profit   189,870    217,765    384,962    445,663 
Operating expenses   145,830    152,526    294,411    282,528 
Income from operations   44,040    65,239    90,551    163,135 
Interest and other income/(expense) – net   1,956    (1,291)   3,976    (1,234)
Income before provision for income taxes   45,996    63,948    94,527    161,901 
Provision for income taxes   10,923    15,033    22,668    38,393 
Net income   35,073    48,915    71,859    123,508 
Less: net income attributable to noncontrolling interest   544    455    600    535 
Net income attributable to Steven Madden, Ltd.  $34,529   $48,460   $71,259   $122,973 
                     
Basic net income per share  $0.47   $0.63   $0.96   $1.60 
                     
Diluted net income per share  $0.46   $0.62   $0.95   $1.55 
                     
Basic weighted average common shares outstanding   73,613    76,556    74,053    76,902 
                     
Diluted weighted average common shares outstanding   74,883    78,714    75,361    79,190 
                     
Cash dividends declared per common share  $0.21   $0.21   $0.42   $0.42 

 

 

 

 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

       As of     
   June 30, 2023   December 31, 2022   June 30, 2022 
   (Unaudited)       (Unaudited) 
ASSETS               
Current assets:               
Cash and cash equivalents  $258,056   $274,713   $150,929 
Short-term investments   16,358    15,085    29,569 
Accounts receivable, net of allowances   41,332    37,937    31,377 
Factor accounts receivable   256,627    248,228    344,716 
Inventories   207,839    228,752    306,547 
Prepaid expenses and other current assets   24,282    22,989    31,047 
Income tax receivable and prepaid income taxes   23,405    15,853    12,225 
Total current assets   827,899    843,557    906,410 
Note receivable – related party   201    401    598 
Property and equipment, net   42,267    40,664    35,004 
Operating lease right-of-use asset   116,871    90,264    85,608 
Deposits and other   10,858    12,070    4,029 
Deferred taxes   2,135    1,755    6,517 
Goodwill – net   168,967    168,085    167,959 
Intangibles – net   101,047    101,192    107,167 
Total Assets  $1,270,245   $1,257,988   $1,313,292 
LIABILITIES               
Current liabilities:               
Accounts payable  $130,417   $130,542   $105,130 
Accrued expenses   134,469    138,523    219,005 
Operating leases – current portion   36,593    29,499    31,074 
Income taxes payable   7,773    9,403    14,100 
Contingent payment liability – current portion   1,153    1,153    2,000 
Accrued incentive compensation   7,237    11,788    8,334 
Total current liabilities   317,642    320,908    379,643 
Operating leases – long-term portion   96,277    79,128    76,023 
Deferred tax liabilities   3,923    3,923    3,378 
Other liabilities   10,686    10,166    10,930 
Total Liabilities   428,528    414,125    469,974 
                
STOCKHOLDERS’ EQUITY               
Total Steven Madden, Ltd. stockholders’ equity   824,516    831,553    833,534 
Noncontrolling interest   17,201    12,310    9,784 
Total stockholders’ equity   841,717    843,863    843,318 
Total Liabilities and Stockholders’ Equity  $1,270,245   $1,257,988   $1,313,292 

 

 

 

 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

   Six Months Ended 
   June 30, 2023   June 30, 2022 
Cash flows from operating activities:          
Net income  $71,859   $123,508 
Adjustments to reconcile net income to net cash provided by operating activities:          
Stock-based compensation   12,239    12,150 
Depreciation and amortization   7,257    10,471 
Loss on disposal of fixed assets   193    260 
Impairment of lease right-of-use asset   95     
Deferred taxes       (1,936)
Accrued interest on note receivable - related party   (4)   (8)
Notes receivable - related party   204    204 
Change in valuation of contingent payment liabilities       (4,960)
Other operating activities   26     
Changes, net of acquisitions, in:          
Accounts receivable   (3,395)   (4,564)
Factor accounts receivable   (6,256)   20,589 
Inventories   22,417    (53,222)
Prepaid expenses, income tax receivables, prepaid taxes, and other assets   (8,572)   (7,676)
Accounts payable and accrued expenses   (7,316)   (44,197)
Accrued incentive compensation   (4,551)   (6,537)
Leases and other liabilities   (1,939)   (3,457)
Payment of contingent consideration       (339)
           
Net cash provided by operating activities   82,257    40,286 
           
Cash flows from investing activities:          
Capital expenditures   (7,793)   (5,263)
Purchase of a trademark       (2,000)
Purchases of short-term investments   (11,406)   (38,951)
Maturity/sale of short-term investments   10,445    53,803 
           
Net cash (used in)/provided by investing activities   (8,754)   7,589 
           
Cash flows from financing activities:          
Proceeds from exercise of stock options   870    415 
Investment of noncontrolling interest   4,582     
Common stock purchased for treasury   (64,235)   (77,027)
Cash dividends paid on common stock   (31,895)   (33,389)
Payment of contingent consideration       (4,770)
Net cash used in financing activities   (90,678)   (114,771)
Effect of exchange rate changes on cash and cash equivalents   518    (1,674)
Net decrease in cash and cash equivalents   (16,657)   (68,570)
Cash and cash equivalents – beginning of period   274,713    219,499 
           
Cash and cash equivalents – end of period  $258,056   $150,929 

 

 

 

 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

NON-GAAP RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)

 

The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.

 

Table 1 - Reconciliation of GAAP operating expenses to Adjusted operating expenses

 

   Three Months Ended   Six Months Ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
                 
GAAP operating expenses  $145,830   $152,526   $294,411   $282,528 
Non-GAAP Adjustments   (495)   (1,713)   (1,676)   1,753 
Adjusted operating expenses  $145,335   $150,813   $292,735   $284,281 

 

Table 2 - Reconciliation of GAAP income from operations to Adjusted income from operations

 

   Three Months Ended   Six Months Ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
                 
GAAP income from operations  $44,040   $65,239   $90,551   $163,135 
Non-GAAP Adjustments   495    1,713    1,676    (1,753)
Adjusted income from operations  $44,535   $66,952   $92,227   $161,382 

 

Table 3 - Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes

 

   Three Months Ended   Six Months Ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
                 
GAAP provision for income taxes  $10,923   $15,033   $22,668   $38,393 
Non-GAAP Adjustments   116    399    394    (1,934)
Adjusted provision for income taxes  $11,039   $15,432   $23,062   $36,459 

 

Table 4 - Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.

 

   Three Months Ended   Six Months Ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
                 
GAAP net income attributable to Steven Madden, Ltd.  $34,529   $48,460   $71,259   $122,973 
Non-GAAP Adjustments   378    1,313    1,282    180 
Adjusted net income attributable to Steven Madden, Ltd.  $34,907   $49,773   $72,541   $123,153 
                     
GAAP diluted net income per share  $0.46   $0.62   $0.95   $1.55 
                     
Adjusted diluted net income per share  $0.47   $0.63   $0.96   $1.56 

 

 

 

 

Table 5 - Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in 2023 outlook

 

   2023 Outlook 
   Low End   High End 
         
GAAP diluted net income per share  $2.38   $2.48 
Non-GAAP Adjustments   0.02    0.02 
Adjusted diluted net income per share  $2.40   $2.50 

 

Non-GAAP Adjustments include the items below.

 

For the second quarter of 2023:

 

$0.5 million pre-tax ($0.4 million after-tax) expense in connection with certain severances and termination benefits, included in operating expenses.

 

For the second quarter of 2022:

 

$1.8 million pre-tax ($1.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
$0.1 million pre-tax ($0.04 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.

 

For the 2023 outlook:

 

$1.7 million pre-tax ($1.3 million after-tax) expense in connection with certain severances, termination benefits and a corporate office relocation, included in operating expenses.

 

Contact

 

Steven Madden, Ltd.

VP of Corporate Development & Investor Relations

Danielle McCoy

718-308-2611

InvestorRelations@stevemadden.com

 

 

 

 

v3.23.2
Cover
Aug. 02, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Aug. 02, 2023
Entity File Number 000-23702
Entity Registrant Name STEVEN MADDEN, LTD.
Entity Central Index Key 0000913241
Entity Tax Identification Number 13-3588231
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 52-16 Barnett Avenue
Entity Address, City or Town Long Island City
Entity Address, State or Province NY
Entity Address, Postal Zip Code 11104
City Area Code (718)
Local Phone Number 446-1800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.0001 per share
Trading Symbol SHOO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false

Steven Madden (NASDAQ:SHOO)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Steven Madden Charts.
Steven Madden (NASDAQ:SHOO)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Steven Madden Charts.