U.S. Markets closed

Steve Madden Announces Second Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
·17 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

LONG ISLAND CITY, N.Y., July 28, 2021 (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 second quarter ended June 30, 2021.

Amounts referred to as “Adjusted” exclude the items that are described under the heading “Non-GAAP Adjustments.”

Second Quarter 2021 Review

  • Revenue increased 178.6% to $397.9 million compared to $142.8 million in the same period of 2020.

  • Gross margin increased to 42.7% compared to 39.1% in the same period of 2020.

  • Operating expenses as a percentage of revenue were 30.6% compared to 54.9% in the same period of 2020. Adjusted operating expenses as a percentage of revenue were 29.9% compared to 53.8% in the same period of 2020.

  • Income from operations totaled $47.7 million, or 12.0% of revenue, compared to loss from operations of ($23.7) million, or (16.6%) of revenue, in the same period of 2020. Adjusted income from operations was $51.0 million, or 12.8% of revenue, compared to Adjusted loss from operations of ($21.0) million, or (14.7%) of revenue, in the same period of 2020.

  • Net income attributable to Steven Madden, Ltd. was $36.9 million, or $0.45 per diluted share, compared to net loss attributable to Steven Madden, Ltd. of ($16.6) million, or ($0.21) per diluted share, in the same period of 2020. Adjusted net income attributable to Steven Madden, Ltd. was $39.7 million, or $0.48 per diluted share, compared to Adjusted net loss attributable to Steven Madden, Ltd. of ($14.7) million, or ($0.19) per diluted share, in the same period of 2020.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are excited about the strong and accelerated recovery we are seeing in our business. Our second quarter results significantly exceeded our expectations, with earnings slightly ahead of pre-COVID-19 second quarter 2019. Our retail segment was the standout, as the exceptional performance in our e-commerce business – fueled by the trend-right product assortments created by Steve and our design teams combined with effective digital marketing – drove an increase in retail revenue of 63% compared to pre-COVID-19 second quarter 2019. Looking ahead, while the environment remains volatile, we are confident that the strength of our brands and momentum in our business position us to drive revenue and earnings growth in the back half of 2021 and beyond.”

Second Quarter 2021 Segment Results

Revenue for the wholesale business was $262.1 million, a 162.2% increase compared to the second quarter of 2020, with a 154.1% increase in wholesale footwear and a 190.7% increase in wholesale accessories/apparel. Gross margin in the wholesale business rose to 30.6% compared to 26.6% in the second quarter of 2020.

Retail revenue was $132.7 million, a 220.6% increase compared to the second quarter of 2020. Retail gross margin decreased to 65.4% compared to 67.4% in the second quarter of 2020.

The Company ended the quarter with 216 company-operated retail stores, including six internet stores, as well as 15 company-operated concessions in international markets.

Balance Sheet and Cash Flow

During the second quarter of 2021, the Company repurchased 876,241 shares of the Company’s common stock for approximately $37.2 million, which includes shares acquired through the net settlement of employees’ stock awards.

As of June 30, 2021, cash, cash equivalents and short-term investments totaled $302.7 million.

Quarterly Cash Dividend

The Company’s Board of Directors approved a quarterly cash dividend of $0.15 per share. The dividend is payable on September 27, 2021 to stockholders of record as of the close of business on September 17, 2021.

Fiscal 2021 Outlook

For fiscal 2021, the Company expects revenue will increase 43% to 47% over fiscal 2020. The Company expects diluted EPS will be in the range of $1.90 to $2.00 and Adjusted diluted EPS will be in the range of $2.00 to $2.10.

Non-GAAP Adjustments

Amounts referred to as “Adjusted” exclude the items below.

For the second quarter of 2021:

  • $8.0 million pre-tax ($6.1 million after-tax) benefit associated with the sale of a trademark, included in operating expenses.

  • $7.4 million pre-tax ($5.6 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses.

  • $2.9 million pre-tax ($2.2 million after-tax) expense in connection with payments related to rent restructuring of various leases, included in operating expenses.

  • $0.5 million pre-tax ($0.4 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.

  • $0.5 million pre-tax ($0.4 million after-tax) expense in connection 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 write-off of an investment, included in interest and other (expense) / income, net.

For the second quarter of 2020:

  • $5.4 million pre-tax ($4.1 million after-tax) expense in connection with restructuring and related charges, included in operating expenses.

  • $4.6 million pre-tax ($3.5 million after-tax) benefit in connection with a change in valuation of contingent considerations, included in operating expenses.

  • $1.2 million pre-tax ($0.9 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets.

  • $0.7 million pre-tax ($0.6 million after-tax) expense in connection with benefits provided to furloughed employees, included in operating expenses.

  • $0.2 million loss in connection with the impairment of lease right-of-use assets, trademark and other attributable to noncontrolling interest.

Reconciliations of amounts on a GAAP basis to Adjusted amounts are presented in the Non-GAAP Reconciliation tables at the end of this release and identify and quantify all excluded items.

Conference Call Information

Interested stockholders are invited to listen to the first quarter 2021 earnings conference call scheduled for today, July 28, 2021, at 8:30 a.m. Eastern Time. 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, specialty stores, luxury retailers, national chains, mass merchants and online retailers. 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, hosiery, sunglasses, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s fashion sneakers, sandals, dress shoes, boots, slippers and more, visit http://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”, or “estimate”, 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 pandemic (COVID-19), 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;

  • disruptions to product delivery systems 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 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 STATEMENT OF OPERATIONS DATA

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Net sales

$

394,797

$

141,363

$

753,698

$

497,047

Commission and licensing fee income

3,097

1,449

5,221

4,933

Total revenue

397,894

142,812

758,919

501,980

Cost of sales

227,839

86,924

449,760

312,628

Gross profit

170,055

55,888

309,159

189,352

Operating expenses

121,860

78,412

232,308

199,785

Impairment of fixed assets and lease right-of-use assets

477

1,178

1,089

29,999

Impairment of intangibles

9,518

Income / (loss) from operations

47,718

(23,702

)

75,762

(49,950

)

Interest and other (expense) / income, net

(777

)

357

(814

)

1,403

Income / (loss) before provision for income taxes

46,941

(23,345

)

74,948

(48,547

)

Provision / (benefit) for income taxes

9,600

(6,201

)

15,276

(13,602

)

Net income / (loss)

37,341

(17,144

)

59,672

(34,945

)

Less: net income / (loss) attributable to noncontrolling interest

489

(558

)

1,623

(908

)

Net income / (loss) attributable to Steven Madden, Ltd.

$

36,852

$

(16,586

)

$

58,049

$

(34,037

)

Basic net income / (loss) per share

$

0.47

$

(0.21

)

$

0.74

$

(0.43

)

Diluted net income / (loss) per share

$

0.45

$

(0.21

)

$

0.71

$

(0.43

)

Basic weighted average common shares outstanding

78,899

78,517

78,968

78,696

Diluted weighted average common shares outstanding

82,061

78,517

81,981

78,696

Cash dividends declared per common share

$

0.15

$

$

0.30

$

0.15


STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

As of

June 30, 2021

December 31, 2020

June 30, 2020

(Unaudited)

(Unaudited)

Cash and cash equivalents

$

262,144

$

247,864

$

318,101

Short-term investments and marketable securities

40,513

39,302

38,837

Accounts receivable, net

279,143

277,715

143,679

Inventories

125,525

101,420

103,282

Other current assets

36,455

31,940

32,022

Property and equipment, net

38,213

43,268

49,594

Operating lease right-of-use assets

97,222

101,379

120,489

Goodwill and intangibles, net

282,952

283,456

315,742

Other assets

10,976

11,417

10,646

Total assets

$

1,173,143

$

1,137,761

$

1,132,392

Accounts payable

$

91,822

$

73,904

$

42,474

Operating leases (current & non-current)

125,740

132,849

151,520

Other current liabilities

150,115

127,755

115,866

Advances from factor

42,662

Contingent payment liability (current & non-current)

8,041

207

1,829

Other long-term liabilities

14,903

12,677

10,921

Total Steven Madden, Ltd. stockholders’ equity

774,335

776,586

755,084

Noncontrolling interest

8,187

13,783

12,036

Total liabilities and stockholders’ equity

$

1,173,143

$

1,137,761

$

1,132,392


STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW DATA

(In thousands)

(Unaudited)

Six Months Ended

June 30, 2021

June 30, 2020

Net cash provided by operating activities

$

91,924

$

57,867

Investing Activities

Capital expenditures

(2,782

)

(4,320

)

Proceeds from sale of a trademark

8,000

Purchases of marketable securities and short-term investments, net

(114

)

(162

)

Net cash provided by / (used in) investing activities

5,104

(4,482

)

Financing Activities

Common stock purchased for treasury

(42,794

)

(29,678

)

Acquisition of incremental ownership of joint ventures

(19,127

)

Investment of noncontrolling interest

359

Distribution of noncontrolling interest earnings

(2,859

)

Proceeds from exercise of stock options

6,823

960

Cash dividends paid

(24,773

)

(12,459

)

Advances from factor, net

42,662

Net cash (used in) / provided by financing activities

(82,730

)

1,844

Effect of exchange rate changes on cash and cash equivalents

(18

)

(1,229

)

Net increase in cash and cash equivalents

14,280

54,000

Cash and cash equivalents - beginning of period

247,864

264,101

Cash and cash equivalents - end of period

$

262,144

$

318,101


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, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP operating expenses

$

121,860

$

78,412

$

232,308

$

199,785

Expense in connection with payments related to rent restructuring of various leases and lease terminations

(2,912

)

(9,505

)

(142

)

Recovery in connection with the Payless ShoeSource bankruptcy

917

Expense in connection with restructuring and related charges

(488

)

(5,414

)

(1,294

)

(5,414

)

(Expense) / benefit in connection with the change in valuation of contingent considerations

(7,364

)

4,611

(7,834

)

4,611

Expense in connection with benefits provided to furloughed employees

(733

)

(1,991

)

Expense in connection with loan receivable

(697

)

Sale of trademark

8,000

8,000

Adjusted operating expenses

$

119,096

$

76,876

$

222,592

$

196,152


Table 2 - Reconciliation of GAAP income / (loss) from operations to Adjusted income / (loss) from operations

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP income / (loss) from operations

$

47,718

$

(23,702

)

$

75,762

$

(49,950

)

Expense in connection with payments related to rent restructuring of various leases and lease terminations

2,912

9,505

142

Recovery in connection with the Payless ShoeSource bankruptcy

(917

)

Expense in connection with restructuring and related charges

488

5,414

1,294

5,414

Impairment of fixed assets and lease right-of-use assets

477

1,178

1,089

29,999

Expense / (benefit) in connection with the change in valuation of contingent considerations

7,364

(4,611

)

7,834

(4,611

)

Expense in connection with benefits provided to furloughed employees

733

1,991

Expense in connection with loan receivable

697

Sale of trademark

(8,000

)

(8,000

)

Impairment of certain trademarks

9,518

Adjusted income / (loss) from operations

$

50,959

$

(20,988

)

$

86,567

$

(6,800

)


Table 3 - Reconciliation of GAAP interest and other (expense) / income, net to Adjusted interest and other (expense) / income, net

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP interest and other (expense) / income, net

$

(777

)

$

357

$

(814

)

$

1,403

Write-off of investment

500

500

Adjusted interest and other (expense) / income, net

$

(277

)

$

357

$

(314

)

$

1,403


Table 4 - Reconciliation of GAAP provision / (benefit) for income taxes to Adjusted provision / (benefit) for income taxes

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP provision / (benefit) for income taxes

$

9,600

$

(6,201

)

$

15,276

$

(13,602

)

Tax effect of expense in connection with payments related to rent restructuring of various leases and lease terminations

694

2,251

34

Tax effect of recovery in connection with the Payless ShoeSource bankruptcy

(201

)

Tax effect of expense in connection with restructuring and related charges

115

1,284

305

1,284

Tax effect of impairment of fixed assets and lease right-of-use assets

113

277

275

7,243

Tax effect of expense / (benefit) in connection with the change in valuation of contingent considerations

1,742

(1,092

)

1,853

(1,092

)

Tax effect of expense in connection with benefits provided to furloughed employees

174

472

Tax effect of expense in connection with provision for loan receivable

165

Tax effect of write-off of investment

118

118

Tax effect of sale of trademark

(1,893

)

(1,893

)

Tax effect of impairment of certain trademarks

2,254

Adjusted provision / (benefit) for income taxes

$

10,489

$

(5,558

)

$

17,984

$

(3,242

)


Table 5 - Reconciliation of GAAP net income / (loss) attributable to noncontrolling interest to Adjusted net income / (loss) attributable to noncontrolling interest

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP net income / (loss) attributable to noncontrolling interest

$

489

$

(558

)

$

1,623

$

(908

)

Adjustments attributable to noncontrolling interest

163

24

470

Adjusted net income / (loss) attributable to noncontrolling interest

$

489

$

(395

)

$

1,647

$

(438

)


Table 6 - Reconciliation of GAAP income / (loss) attributable to Steven Madden, Ltd. to Adjusted net income / (loss) attributable to Steven Madden, Ltd.

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP net income / (loss) attributable to Steven Madden, Ltd.

$

36,852

$

(16,586

)

$

58,049

$

(34,037

)

After-tax impact of expense in connection with payments related to rent restructuring of various leases and lease terminations

2,218

7,254

109

After-tax impact of recovery in connection with the Payless ShoeSource bankruptcy

(716

)

After-tax impact of expense in connection with restructuring and related charges

372

4,130

988

4,130

After-tax impact of impairment of store assets and lease right-of-use assets

364

900

814

22,755

After-tax impact of expense / (benefit) in connection with the change in valuation of contingent considerations

5,621

(3,519

)

5,980

(3,519

)

After-tax impact of expense in connection with benefits provided to furloughed employees

560

1,520

After-tax impact of expense in connection with provision for loan receivable

532

After-tax impact of write-off of investment

382

382

After-tax impact of sale of trademark

(6,107

)

(6,107

)

After-tax impact of impairment of certain trademarks

7,265

Less: Adjustments attributable to noncontrolling interest

(163

)

(24

)

(470

)

Adjusted net income / (loss) attributable to Steven Madden, Ltd.

$

39,702

$

(14,678

)

$

66,620

$

(1,715

)

GAAP diluted income / (loss) per share

$

0.45

$

(0.21

)

$

0.71

$

(0.43

)

Adjusted diluted income / (loss) per share

$

0.48

$

(0.19

)

$

0.81

$

(0.02

)

Contact

Steven Madden, Ltd.
Director of Corporate Development & Investor Relations
Danielle McCoy
718-308-2611
InvestorRelations@stevemadden.com