雅虎香港財經 Why Is Steven Madden (SHOO) Up 9.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Steven Madden (SHOO). Shares have added about 9.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steven Madden due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Steven Madden Q1 Earnings Beat, Revenues Increase Y/Y
Steven Madden better-than-expected results in first-quarter 2024, with the top and bottom lines surpassing the Zacks Consensus Estimate. Also, revenues and earnings increased year over year.
The company made significant strides in key strategic areas, achieving double-digit revenue growth in the international markets, non-footwear categories, and direct-to-consumer channels, along with a revenue revival in the U.S. wholesale footwear business. The ongoing strategic efforts are expected to help sustain revenue and earnings growth, thereby generating substantial value for stakeholders over the long term.
Q1 Highlights
Steven Madden posted adjusted quarterly earnings of 65 cents a share, which beat the Zacks Consensus Estimate of 56 cents. The same increased 30% from 50 cents in the prior-year period.
Total revenues rose 19.1% year over year to $552.4 million. Net revenues of $550.6 million went up 19.2%, and commission and licensing fee income of $1.8 million decreased 13.5% from the year-ago period. The top line beat the consensus estimate of $522 million.
Adjusted gross profit rose 15.3% year over year to $225 million. We note that the adjusted gross margin contracted 130 basis points (bps) to 40.7%.
Gross profit, as a percentage of wholesale revenues, decreased 190 bps to 35.1%, driven by the effects of Almost Famous and a shift in the wholesale footwear mix toward the private label business. However, gross profit, as a percentage of direct-to-consumer revenues, increased 270 bps to 61.9% due to reduced promotional activity.
The company’s adjusted operating expenses increased 11.3% year over year to $164.1 million. However, as a percentage of revenues, adjusted operating expenses declined 210 bps year over year to 29.7%.
Steven Madden reported an adjusted operating income of $61 million, up 27.8% from the same quarter a year ago. The adjusted operating margin increased 80 bps to 11%.
Segmental Performance
Revenues for the Wholesale business improved 21% year over year to $438.2 million. We note that Wholesale footwear revenues increased 4.7% year over year, while Wholesale accessories/apparel revenues grew 78.6%. Excluding the recent acquisition of Almost Famous, wholesale revenues rose 9.7% year over year, and wholesale accessories and apparel revenues grew 27.4%.
DTC revenues increased 12.8% to $112.3 million, driven by an increase in the brick-and-mortar and e-commerce businesses.
SHOO ended the first quarter with 253 brick-and-mortar retail outlets, five e-commerce websites and 25 company-operated concessions across the international markets.
Other Financial Aspects
Steven Madden ended the first quarter with cash and cash equivalents of $131.5 million, short-term investments of $11.6 million, and stockholders’ equity of $825.2 million, excluding non-controlling interest of $18.4 million. Management incurred a capital expenditure of $4 million in the first quarter.
In the reported quarter, SHOO repurchased $37.3 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. At the end of the first quarter, there was approximately $143 million remaining under the share repurchase authorization. Moreover, management approved a quarterly cash dividend of 21 cents per share, payable Jun 21, 2024, to stockholders of record as of Jun 10.
Outlook
For 2024, the company anticipates an 11-13% increase in revenues from that reported in 2023, with adjusted earnings of $2.55-$2.65 per share. Notably, the company reported earnings of $2.30 per share in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Steven Madden has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Steven Madden has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Steven Madden belongs to the Zacks Shoes and Retail Apparel industry. Another stock from the same industry, Skechers (SKX), has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Skechers reported revenues of $2.25 billion in the last reported quarter, representing a year-over-year change of +12.5%. EPS of $1.33 for the same period compares with $1.02 a year ago.
For the current quarter, Skechers is expected to post earnings of $0.91 per share, indicating a change of -7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Skechers. Also, the stock has a VGM Score of C.
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