Strong sales push Steve Madden to record-breaking second quarter
American footwear and accessories company Steve Madden announced on Tuesday that its net sales rose 12.4% in the second quarter ended June 30, 2019, totaling a record $445.0 million, compared to $395.8 million in the prior-year period.
Sales in the company’s wholesale business increased 13.1% to $363.5 million, reflecting growth of 13.5% in footwear and 11.5% in accessories. Progress in wholesale footwear was driven by strong progress at the Steve Madden brand and the addition of the Anne Klein label, as well as increases in the group’s private label business, while accessories received a boost from the popularity of Steve Madden handbags and private labels.
Progress in the company’s retail business was slightly slower but the segment still posted a strong increase of 9.6% in net sales, which totaled $81.5 million. Same-store sales rose 6.2%, thanks largely to growth in the group’s e-commerce business.
Gross margin in the segment did, however, take a hit in the quarter, reducing from 62.9% to 59.7%, as the company’s Chinese joint venture wound down and slow-moving inventory was aggressively liquidated in North America.
Ultimately, the group’s quarterly net income came to $36.6 million, or $0.44 per diluted share, up from $32.4 million, or $0.38 per diluted share, in Q2 2018.
For the first half of fiscal 2019, the company announced a total of $855.9 million in net sales, a 9.1% increase when compared to the $784.8 million reported by the company in the same six-month period in the previous year, while net income rose to $71.1 million, up from $61.1 million.
“We delivered a strong second quarter,” commented Steve Madden Chairman and CEO Edward Rosenfeld in a release. “Based on the strength of our brands and our business model – combined with our consistency in delivering on-trend product that resonates with consumers – we are confident that we can continue to drive sales and earnings growth and create value for shareholders over the long term.”
Despite this confidence, the executive did highlight an estimated incremental headwind of approximately $0.05 per share resulting from increased tariffs on imports from China effective as of May 10.
Nonetheless, for the full fiscal year 2019, Steve Madden continues to expect net sales to increase 5% to 7%, while diluted EPS are predicted to be in the range of $1.74 to $1.82.
As well as its namesake brand, Steve Madden also owns labels including Dolce Vita, Betsey Johnson and Big Buddha, and hold licenses for the likes of Anne Klein, Kate Spade and DKNY.
The company currently boasts 224 company-operated retail locations, including six e-commerce sites and 31 concessions in international markets.
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