Steven Madden (SHOO) Q4 Earnings Beat, Revenues Increase Y/Y
Steven Madden, Ltd. SHOO reported better-than-expected results in fourth-quarter 2023, with the top and bottom lines surpassing the Zacks Consensus Estimate. Also, revenues and earnings increased year over year.
Over the past three months, shares of this company have gained 14.2% against the industry’s 3.3% drop.
Steven Madden, Ltd. Price, Consensus and EPS Surprise
Steven Madden, Ltd. price-consensus-eps-surprise-chart | Steven Madden, Ltd. Quote
Q4 Highlights
Steven Madden posted adjusted quarterly earnings of 61 cents a share, which beat the Zacks Consensus Estimate of 56 cents. The same increased 38.6% from earnings of 44 cents in the prior-year period.
Total revenues rose 10.4% year over year to $519.7 million. Net revenues of $517.1 million went up 10.4%, and commission and licensing fee income of $2.7 million increased 8% from the year-ago period. The top line beat the consensus estimate of $511 million.
Adjusted gross profit rose 9.2% year over year to $216.9 million. We note that the adjusted gross margin contracted 50 basis points (bps) to 41.7%.
Gross profit, as a percentage of wholesale revenues, increased 120 bps to 31.7%, driven by higher wholesale footwear and wholesale accessories/apparel businesses. However, gross profit, as a percentage of direct-to-consumer revenues, declined 130 bps to 62.7% due to higher promotional activity.
This Zacks Rank #3 (Hold) company’s adjusted operating expenses increased 4.7% year over year to $163.9 million. However, as a percentage of revenues, adjusted operating expenses declined 170 bps year over year to 31.5%.
Steven Madden reported an adjusted operating income of $53 million, up 25.6% from the same quarter a year ago. The adjusted operating margin increased 120 bps to 10.2%.
Segmental Performance
Revenues for the Wholesale business improved 14.9% year over year to $354.8 million. We note that Wholesale footwear revenues fell 0.4% year over year, while Wholesale accessories/apparel revenues were up 56.5%. Our model suggested total Wholesale revenues of $353.8 million for the fourth quarter, indicating 14.6% year-over-year growth.
DTC revenues increased 1.9% to $162.3 million, driven by an increase in the brick-and-mortar business.
Steven Madden ended the fourth quarter with 255 brick-and-mortar retail outlets, five e-commerce websites and 25 company-operated concessions across the international markets.
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Other Financial Aspects
Steven Madden ended the reported quarter with cash and cash equivalents of $204.6 million, short-term investments of $15.2 million and stockholders’ equity of $829.6 million, excluding non-controlling interest of $18.4 million. Management incurred a capital expenditure of $19.5 million in 2023.
In the reported quarter, SHOO repurchased $38 million of its common stock, including shares acquired via the net settlement of employees’ stock awards. Moreover, management approved a quarterly cash dividend of 21 cents per share, payable Mar 22, 2024, to stockholders of record as of Mar 8.
Outlook
For 2024, the company anticipates an 11-13% increase in revenues from that reported in 2023, with earnings of $2.55-$2.65 per share. Notably, the company reported earnings of $2.30 per share in 2023.
Eye These Solid Picks
Here, we have highlighted three better-ranked stocks, namely Reynolds Consumer Products Inc. REYN, Ralph Lauren Corp. RL and PVH Corporation PVH.
Reynolds is a consumer-branded and private-label product company that sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Reynolds’ current financial-year earnings suggests growth of 13.4% from the 2023 actuals. REYN has a trailing four-quarter earnings surprise of 5.5%, on average.
Ralph Lauren is a major designer, marketer and distributor of premium lifestyle products. The company currently flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for RL’s current fiscal-year sales and earnings suggests growth of 2.5% and 21.2%, respectively, from the fiscal 2023 reported figures. RL has a trailing four-quarter earnings surprise of 18.7%, on average.
PVH Corp specializes in designing and marketing branded dresses. The company sports a Zacks Rank #2 (Buy) at present. It had an EPS surprise of 6.6% in the fourth quarter.
The Zacks Consensus Estimate for PVH Corp’s current fiscal-year sales and earnings suggests growth of 1.2% and 16.6%, respectively, from the fiscal 2023 reported figures. PVH has a trailing four-quarter earnings surprise of 18.9%, on average.
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