Steve Madden Announces First Quarter 2022 Results

Apr 27th, 2022 6:59 EST

~ Records Highest Quarterly Earnings in History ~~ Raises Fiscal 2022 Guidance ~

LONG ISLAND CITY, N.Y., April 27, 2022 (GLOBE NEWSWIRE) — 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 first quarter ended March 31, 2022.

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

First Quarter 2022 Review

  • Revenue increased 55.0% to $559.7 million compared to $361.0 million in the same period of 2021.
  • Gross profit as a percentage of revenue increased to 40.7% compared to 38.5% in the same period of 2021.
  • Operating expenses as a percentage of revenue decreased to 23.2% compared to 30.6% in the same period of 2021. Adjusted operating expenses as a percentage of revenue were 23.8% compared to 28.7% in the first of quarter 2021.
  • Income from operations totaled $97.9 million, or 17.5% of revenue, compared to $28.0 million, or 7.8% of revenue, in the same period of 2021. Adjusted income from operations totaled $94.4 million, or 16.9% of revenue, compared to $35.6 million, or 9.9% of revenue, in the first quarter of 2021.
  • Net income attributable to Steven Madden, Ltd. was $74.5 million, or $0.94 per diluted share, compared to $21.2 million, or $0.26 per diluted share, in the same period of 2021. Adjusted net income attributable to Steven Madden, Ltd. was $73.4 million, or $0.92 per diluted share, compared to $26.9 million, or $0.33 per diluted share, in the first quarter of 2021.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We got off to an outstanding start to the year, delivering the highest quarterly earnings in our history in the first quarter. The trend-right product assortments created by Steve and our design teams drove robust consumer demand for our brands and strong performance across channels, product categories and geographies. These results reflect our team’s disciplined execution of our strategic initiatives, and we are confident that the strength of our team and strategy will enable us to drive sustainable growth for years to come.”

First Quarter 2022 Segment Results

Revenue for the wholesale business was $449.0 million, a 54.1% increase compared to first quarter of 2021, with a 59.9% increase in wholesale footwear and a 37.1% increase in wholesale accessories/apparel. Gross profit as a percentage of wholesale revenue increased to 35.2% compared to 32.3% in the first quarter of 2021.

Direct-to-consumer revenue was $108.3 million, a 60.5% increase compared to the first quarter of 2021. Gross profit as a percentage of direct-to-consumer revenue was 62.3% compared to 63.5% in the first quarter of 2021.

The Company ended the quarter with 213 brick-and-mortar retail stores and 6 e-commerce websites, as well as 19 company-operated concessions in international markets.

Balance Sheet and Cash Flow

As of March 31, 2022, cash, cash equivalents and short-term investments totaled $180.2 million.

During the first quarter of 2022, the Company repurchased approximately $42.4 million of the Company’s 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 June 24, 2022 to stockholders of record as of the close of business on June 13, 2022.

Updated Fiscal 2022 Outlook

The Company is raising its fiscal 2022 guidance. For fiscal 2022, the Company now expects revenue will increase 13% to 16% over fiscal 2021. The Company now expects diluted EPS will be in the range of $2.87 to $2.97. The Company now expects Adjusted diluted EPS will be in the range of $2.90 to $3.00.

Conference Call Information

Interested stockholders are invited to listen to the conference call scheduled for today, April 27, 2022, at 8:30 a.m. Eastern Time, which will include a discussion of the Company’s first quarter 2022 earnings results and an update to the fiscal year outlook. The call will be broadcast live over the Internet and can be accessed by logging onto https://investor.stevemadden.com. An online archive of the broadcast will be available within two hours of the conclusion of the call and will remain available for 12 months following the live call.

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®, GREATS®, BB Dakota® and Mad Love®, Steve Madden is a licensee of various brands, including Anne Klein® and Superga®. 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 operates retail stores and e-commerce websites. Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including outerwear, eyewear, sunglasses, hosiery, jewelry, watches, hair accessories, swimwear, fragrance, luggage, bedding and bath products as well as other select product categories. For local store information and the latest Steve Madden boots, booties, dress shoes, fashion sneakers, sandals, slippers and more, please visit www.stevemadden.com.

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 maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or the ongoing COVID-19 pandemic, which may cause disruption to the Company’s business operations for an indeterminable period of time;
  • 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;
  • the Company’s dependence on the retention and hiring of key personnel;
  • the Company’s ability to successfully implement growth strategies and integrate acquired businesses;
  • 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 meet the Company’s quality standards;
  • 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;
  • supply chain disruptions to product delivery systems and logistics, and the Company’s ability to properly manage inventory;
  • the Company’s ability to adequately protect its trademarks and other intellectual property rights;
  • 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;
  • 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
  March 31, 2022   March 31, 2021
       
Net sales $ 557,344   $ 358,901  
Commission and licensing fee income   2,390     2,124  
Total revenue   559,734     361,025  
Cost of sales   331,836     221,921  
Gross profit   227,898     139,104  
Operating expenses   130,002     110,448  
Impairment of fixed assets and lease right-of-use assets       612  
Income from operations   97,896     28,044  
Interest and other income/(expense) – net   57     (37 )
Income before provision for income taxes   97,953     28,007  
Provision for income taxes   23,360     5,676  
Net income   74,593     22,331  
Less: net income attributable to noncontrolling interest   80     1,134  
Net income attributable to Steven Madden, Ltd. $ 74,513   $ 21,197  
       
Basic net income per share $ 0.96   $ 0.27  
       
Diluted net income per share $ 0.94   $ 0.26  
       
Basic weighted average common shares outstanding   77,251     79,038  
       
Diluted weighted average common shares outstanding   79,663     81,889  
       
Cash dividends declared per common share $ 0.21   $ 0.15  
 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

      As of    
  March 31, 2022   December 31, 2021   March 31, 2021
  (Unaudited)       (Unaudited)
           
ASSETS          
Current assets:          
Cash and cash equivalents $ 170,347   $ 219,499   $ 233,202
Short-term investments   9,897     44,037     39,788
Accounts receivable, net of allowances   39,418     26,546     34,722
Factor accounts receivable   390,163     364,982     285,162
Inventories   233,380     255,213     106,561
Prepaid expenses and other current assets   21,225     20,845     16,667
Income tax receivable and prepaid income taxes   3,673     13,538     18,429
Total current assets   868,103     944,660     734,531
Note receivable – related party   696     794     1,081
Property and equipment, net   36,436     35,790     40,458
Operating lease right-of-use asset   83,994     85,449     99,510
Deposits and other   4,304     4,180     5,216
Deferred taxes   6,254     4,581     5,414
Goodwill – net   168,409     167,995     167,979
Intangibles – net   110,330     112,093     114,754
Total Assets $ 1,278,526   $ 1,355,542   $ 1,168,943
LIABILITIES          
Current liabilities:          
Accounts payable $ 121,428   $ 136,766   $ 99,007
Accrued expenses   162,232     243,163     120,253
Operating leases – current portion   31,615     30,759     33,359
Income taxes payable   23,195     4,522    
Contingent payment liability – current portion   2,050     5,109     113
Accrued incentive compensation   4,740     14,871     3,761
Total current liabilities   345,260     435,190     256,493
Contingent payment liability – long term portion       6,960     564
Operating leases – long-term portion   75,553     80,072     96,246
Deferred tax liabilities   3,378     3,378     2,767
Other liabilities   10,928     9,404     12,105
Total Liabilities   435,119     535,004     368,175
           
STOCKHOLDERS’ EQUITY          
Total Steven Madden, Ltd. stockholders’ equity   835,215     812,098     787,528
Noncontrolling interest   8,192     8,440     13,240
Total stockholders’ equity   843,407     820,538     800,768
Total Liabilities and Stockholders’ Equity $ 1,278,526   $ 1,355,542   $ 1,168,943
 

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

  Three Months Ended
  March 31, 2022   March 31, 2021
Cash flows from operating activities:      
Net income $ 74,593     $ 22,331  
Adjustments to reconcile net income to net cash provided by operating activities:      
Stock-based compensation   5,980       5,539  
Depreciation and amortization   5,223       4,028  
Loss on disposal of fixed assets   208       222  
Impairment of lease right-of-use asset and fixed assets         612  
Deferred taxes   (1,673 )     206  
Accrued interest on note receivable – related party   (4 )     (6 )
Notes receivable – related party   102       102  
Change in valuation of contingent payment liabilities   (4,910 )     470  
Recovery of receivables, related to the Payless ShoeSource bankruptcy         (919 )
Changes, net of acquisitions, in:      
Accounts receivable   (12,872 )     (8,759 )
Factor accounts receivable   (25,181 )     (32,491 )
Inventories   21,833       (5,141 )
Prepaid expenses, income tax receivables, prepaid taxes, and other current assets   9,802       (3,319 )
Accounts payable and accrued expenses   (80,642 )     22,097  
Accrued incentive compensation   (10,131 )     (112 )
Leases and other liabilities   (1,774 )     182  
       
Net cash (used in)/provided by operating activities   (19,446 )     5,042  
       
Cash flows from investing activities:      
Capital expenditures   (3,596 )     (1,598 )
Purchase of a trademark   (2,000 )      
Purchases of short-term investments   (9,668 )     (2,054 )
Maturity/sale of short-term investments   44,488       2,036  
       
Net cash provided by/(used in) investing activities   29,224       (1,616 )
       
Cash flows from financing activities:      
Proceeds from exercise of stock options   275       1,554  
Distribution of noncontrolling interest earnings         (1,363 )
Common stock purchased for treasury   (42,399 )     (5,558 )
Cash dividends paid on common stock   (16,774 )     (12,425 )
          (17,792 )
Net cash used in financing activities   (58,898 )     (17,792 )
Effect of exchange rate changes on cash and cash equivalents   (32 )     (296 )
Net decrease in cash and cash equivalents   (49,152 )     (14,662 )
Cash and cash equivalents – beginning of period   219,499       247,864  
       
Cash and cash equivalents – end of period $ 170,347     $ 233,202  
 

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
    March 31, 2022   March 31, 2021
         
GAAP operating expenses   $ 130,002   $ 110,448  
         
Non-GAAP Adjustments     3,466     (6,952 )
         
Adjusted operating expenses   $ 133,468   $ 103,496  

Table 2 – Reconciliation of GAAP income from operations to Adjusted income from operations
    Three Months Ended
    March 31, 2022   March 31, 2021
         
GAAP income from operations   $ 97,896     $ 28,044
         
Non-GAAP Adjustments     (3,466 )     7,564
         
Adjusted income from operations   $ 94,430     $ 35,608

Table 3 – Reconciliation of GAAP provision for income taxes to Adjusted provision for income taxes
    Three Months Ended
    March 31, 2022   March 31, 2021
         
GAAP provision for income taxes   $ 23,360     $ 5,676
         
Non-GAAP Adjustments     (2,333 )     1,819
         
Adjusted provision for income taxes   $ 21,027     $ 7,495

Table 4 – Reconciliation of GAAP net income attributable to noncontrolling interest to Adjusted net income attributable to noncontrolling interest
    Three Months Ended
    March 31, 2022   March 31, 2021
         
GAAP net income attributable to noncontrolling interest   $ 80   $ 1,134
         
Non-GAAP Adjustments         24
         
Adjusted net income attributable to noncontrolling interest   $ 80   $ 1,158

Table 5 – Reconciliation of GAAP net income attributable to Steven Madden, Ltd. to Adjusted net income attributable to Steven Madden, Ltd.
    Three Months Ended
    March 31, 2022   March 31, 2021
         
GAAP net income attributable to Steven Madden, Ltd.   $ 74,513       21,197
         
Non-GAAP Adjustments     (1,133 )     5,721
         
Adjusted net income attributable to Steven Madden, Ltd.   $ 73,380     $ 26,918
         
GAAP diluted net income per share   $ 0.94     $ 0.26
         
Adjusted diluted net income per share   $ 0.92     $ 0.33
         
Adjusted diluted weighted average shares outstanding     79,663       81,889

Table 6 – Reconciliation of GAAP diluted net income per share to Adjusted diluted net income per share in fiscal 2022 outlook
    Fiscal 2022 Outlook
    Low End   High End
         
GAAP diluted net income per share   $ 2.87   $ 2.97
         
Non-GAAP Adjustments     0.03     0.03
         
Adjusted diluted net income per share   $ 2.90   $ 3.00

Non-GAAP Adjustments include the items below.

For the first quarter of 2022:

  • $4.9 million pre-tax ($3.8 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $1.8 million pre-tax ($1.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
  • $0.3 million pre-tax ($0.2 million after-tax) benefit in connection with the exit of a lease, included in operating expenses.
  • $1.5 million tax expense in connection with a deferred tax adjustment.

For the first quarter of 2021:

  • $6.6 million pre-tax ($5.0 million after-tax) expense in connection with payments related to rent restructuring of various leases, included in operating expenses.
  • $0.9 million pre-tax ($0.7 million after-tax) benefit associated with a recovery of receivables in connection with the Payless ShoeSource bankruptcy, included in operating expenses.
  • $0.8 million pre-tax ($0.6 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.
  • $0.6 million pre-tax ($0.4 million after-tax) expense associated with the impairment of fixed assets and lease right-of-use assets.
  • $0.5 million pre-tax ($0.4 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.

For the fiscal year 2022 outlook:

  • $7.1 million pre-tax ($5.4 million after-tax) expense in connection with the accelerated amortization of a trademark, included in operating expenses.
  • $4.9 million pre-tax ($3.8 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses.
  • $0.3 million pre-tax ($0.2 million after-tax) benefit in connection with the exit of a lease, included in operating expenses.
  • $1.5 million tax expense in connection with a deferred tax adjustment.

Contact

Steven Madden, Ltd.VP of Corporate Development & Investor RelationsDanielle McCoy718-308-2611[email protected] 

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