Steven Madden ((SHOO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Steven Madden, Ltd. has reported a robust financial performance for 2024, marked by substantial revenue and earnings growth. The company’s international expansion and strategic acquisitions have been key drivers of this success. However, challenges such as tariffs, inventory issues, and cautious wholesale ordering are anticipated to affect performance in 2025.
Strong Revenue and Earnings Growth
Steven Madden, Ltd. recorded a 15% increase in revenue, reaching $2.3 billion, and a 9% rise in diluted EPS for 2024 compared to the previous year. This growth underscores the company’s strong market position and effective business strategies.
International Expansion Success
The company’s international revenue grew by 12%, with the EMEA region experiencing an 18% increase and the Americas ex-US seeing a 9% rise. This success is attributed to effective joint ventures and strategic market transitions.
Accessories and Apparel Segment Growth
The accessories and apparel segment saw a remarkable 53% increase in revenue. Notably, Steven Madden handbags generated over $300 million in revenue, marking a 31% increase from the previous year.
Direct-to-Consumer Channel Growth
Direct-to-consumer (DTC) revenue increased by 9% to $550 million, with Dolce Vita DTC revenue experiencing a significant 36% growth, highlighting the strength of the company’s DTC strategy.
Successful Acquisition of Kurt Geiger
The acquisition of Kurt Geiger, expected to close in Q2 2025, is set to add a new growth engine for Steven Madden, with the brand generating £400 million in revenue for the year ending February 1, 2025.
Tariff Impact and Production Diversification Challenges
New tariffs on goods imported into the US and efforts to diversify production out of China are expected to negatively impact earnings in 2025, posing a challenge for the company’s financial performance.
Handbag Business Pressure
The handbag segment is facing pressure with backed-up inventories, leading to constrained open-to-buys and more cautious ordering from key wholesale customers.
Decreased Q4 Net Income
In Q4 2024, Steven Madden’s net income was $39.3 million or $0.55 per diluted share, down from $45 million or $0.61 per diluted share in Q4 2023, reflecting some financial pressures.
Reduced Gross Margins
Consolidated gross margin decreased to 40.4% from 41.7% in Q4 2023, with both wholesale and direct-to-consumer segments experiencing margin declines, indicating cost pressures.
Cautious 2025 Outlook
The company anticipates a challenging environment in 2025, with a potential EPS decline of 30% to 35% in Q1 compared to Q1 2024. This cautious outlook reflects the anticipated impact of external challenges on the company’s performance.
Forward-Looking Guidance
Steven Madden, Ltd. remains optimistic about its growth prospects, despite the challenges ahead. The company plans to focus on international market expansion and increase marketing investments to support growth initiatives. The acquisition of Kurt Geiger is expected to contribute significantly to future revenue streams, reinforcing the company’s strategic growth plans.
In conclusion, Steven Madden, Ltd. has demonstrated strong financial performance in 2024, driven by strategic expansions and acquisitions. However, the company is preparing for a challenging 2025 due to external pressures such as tariffs and inventory issues. Investors and stakeholders will be keenly watching how the company navigates these challenges while capitalizing on its growth opportunities.