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Things to Know Ahead of Steven Madden's (SHOO) Q3 Earnings

Zacks Equity Research

Steven Madden, Ltd. SHOO is likely to register improvement in the top line when it reports third-quarter 2019 numbers. The Zacks Consensus Estimate for revenues is pegged at $489.4 million, indicating an increase of 6.7% from the prior-year quarter’s reported figure.

However, the bottom line is expected to fall year over year. We note that the Zacks Consensus Estimate for earnings in the third quarter has moved south by a penny over the past 30 days to 58 cents, which suggests a decline of 10.8% from the year-ago quarter’s reported figure.

Notably, this New York-based designer, marketer and seller of footwear and fashion accessories had reported solid earnings in the preceding four quarters and also comfortably surpassed the Zacks Consensus Estimate by an average of 10.6%. In the last reported quarter, the company delivered positive earnings surprise of 11.9%.

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

Factors at Play

Steven Madden’s focus on enhancing product portfolio and strong international presence are likely to have contributed to top-line performance. Notably, the company is taking several initiatives to expand globally.

Also, the company has been witnessing healthy improvement in the wholesale footwear and accessories segments in domestic and international markets as well as solid growth on stevemadden.com for quite some time now. This trend is likely to have continued in the quarter under review.

However, Steven Madden is grappling with increased cost of goods sold and operating expenses for a while now. These headwinds are likely to have impacted margins. Additionally, the imposition of tariffs on additional consumer goods such as shoes, handbags and others products imported from China, owing to the trade war remains a concern. Management, on its last earnings call, had projected headwinds related to bankruptcy of Payless ShoeSource, the tariff and higher tax rate, to impact third-quarter earnings by approximately 10 cents a share.

Zacks Model

Our proven model doesn’t 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.

Steven Madden carries a Zacks Rank #4 (Sell) and Earnings ESP of -1.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

As it is, stocks with a Zacks Rank #4 or 5 (Strong Sell) are best avoided.

Stocks Poised to Beat Earnings Estimates

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

Deckers Outdoor Corporation DECK has an Earnings ESP of +3.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Skechers U.S.A., Inc. SKX has an Earnings ESP of +4.85% and a Zacks Rank #1.

Carter’s CRI has an Earnings ESP of +0.83% and a Zacks Rank #3.

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