Steven Madden (SHOO) on Track With Strategies: Apt to Hold?
Steven Madden, Ltd. SHOO is well-poised to gain from the positive trends in the fashion world, thanks to its digital endeavors and other robust strategies. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda, expanding international markets and efficiently controlling expenses.
Buoyed by such strengths, shares of this footwear dealer have gained 4.5% against the industry’s 4.4% decline over the past six months.
Delving Deeper
Steven Madden is committed to boosting its e-commerce wing via prudent investments in digital marketing as well as efforts to optimize the features and functionality of its website. Gains from increased investment in digital marketing and robust consumer reception capabilities, such as try-before-you-buy, have been strengths. The company has also been significantly accelerating its digital commerce initiatives with respect to distribution.
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Management has added high-level talent to the organization, ramped up digital marketing spending, improved data science capabilities, launched a try-before-you-buy payment facility, rolled out buy online, pick-up in store across its entire U.S. full-price retail outlets and introduced advanced delivery and return options. Steven Madden is focused on driving growth across the direct-to-consumer business, led by digital capabilities; expanding categories apart from footwear, such as handbags and apparel; enhancing its presence in the international markets and reinforcing its core U.S. wholesale footwear business.
Prudent acquisitions have been aiding Steven Madden’s performance. Its BB Dakota buyout, which is a California-based women's apparel company, appears encouraging. With this acquisition, the company is able to expand its apparel category. Additionally, management had concluded the acquisition of the remaining 49.9% share of its European joint venture. This transaction distributes the company’s branded footwear and accessories across the majority of countries in Europe.
We note that the company’s international business remained positive during the first quarter of 2023. The business recorded a revenue increase of 13% in the said quarter and accounted for more than 18% of the consolidated revenues for the third straight quarter.
To wrap up, Steven Madden seems to be a decent investment bet, given all the aforementioned positives. A Value Score of B further adds strength to this current Zacks Rank #3 (Hold) company. These tailwinds, coupled with a robust business model, position the company well to cash in on market growth opportunities and boost stakeholders’ value in the long haul.
Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for 2024 sales and earnings per share (EPS) is currently pegged at $2.1 billion and $2.72, respectively. These estimates show corresponding growth of 5.2% and 9.8% year over year.
Eye These Solid Picks
Some better-ranked companies are Royal Caribbean RCL, Crocs CROX and lululemon athletica LULU.
Royal Caribbean sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 26.4%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 48.7% and 162.9%, respectively, from the year-ago period’s reported levels.
Crocs, which offers casual lifestyle footwear and accessories, presently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 15%.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS suggests growth of 13.1% and 5.6% from the year-ago period’s reported figure. CROX has a trailing four-quarter earnings surprise of 19.6%, on average.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17% and 18.4%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
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Crocs, Inc. (CROX) : Free Stock Analysis Report
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
