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Factors to Know Ahead of Steven Madden's (SHOO) Q1 Earnings

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·4 min read
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Steven Madden, Ltd. SHOO is likely to register a decline in the top line when it reports first-quarter 2021 numbers on Apr 28, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $333.1 million, suggesting a decline of 7.3% from the prior-year reported figure. Nonetheless, we note that the rate of sales decline is likely to decelerate sharply on a sequential basis. The company had witnessed a decline of 15.9% in the last-reported quarter.

The bottom line of this designer and marketer of fashion-forward footwear, accessories and apparel is expected to increase year over year. The Zacks Consensus Estimate for earnings for the quarter under review has moved up by a penny to 19 cents in the past 30 days. The figure suggests an improvement from earnings of 16 cents reported in the year-ago period.

Notably, this Long Island City, NY-based company has a trailing four-quarter earnings surprise of 25.6%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a significant margin of 28.6%.

Factors to Note

While the impact of ongoing coronavirus pandemic on Steven Madden’s first-quarter performance cannot be ruled out, the strength in brands, a strong balance sheet and a robust business model appear encouraging. Markedly, the company has been focusing on delivering in-trend products, deepening engagement with customers and improving digital commerce business.

The company’s e-commerce business has been a bright spot amid the pandemic. Robust gains from increased investment in digital marketing and solid consumer reception to capabilities such as ‘try before you buy’ have been contributing to the company’s performance.

On its last earnings call, Steven Madden projected mid-single digit increase in retail revenues but forecasted high-single digit decline in wholesale revenues for the first quarter. We note that the company has been struggling with a sluggish wholesale business for a while now. Lower wholesale footwear and accessories/apparel revenues have been marring the wholesale unit. Management on its call had also informed that supply chain disruption due to congestions and slowdowns at the ports is likely to hurt revenues by about $30 million.

Apart from these headwinds such as higher freight costs, soft store traffic and reduced store operating hours cannot be ignored. Nonetheless, Steven Madden has been efficiently managing inventory and lowering expenses to counter pandemic-induced challenges.

Steven Madden, Ltd. Price, Consensus and EPS Surprise

Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden, Ltd. Price, Consensus and EPS Surprise

Steven Madden, Ltd. price-consensus-eps-surprise-chart | Steven Madden, Ltd. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Steven Madden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Although Steven Madden carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Abercrombie & Fitch ANF has an Earnings ESP of +22.92% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dillard's, Inc. DDS has an Earnings ESP of +6.49% and a Zacks Rank #1.

Wolverine World Wide WWW has an Earnings ESP of +9.57% and a Zacks Rank #3.

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

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Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report

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