Long Island City, NY—Steve Madden Ltd. reported today nearly an 8% increase in its fourth quarter profit thanks to increases in its wholesale business that offset a weak holiday in its retail division.
For the quarter ended Dec. 31, the footwear and accessories company posted net income of $35.7 million, or 54 cents a share, compared with income of $33 million, or 49 cents a share, a year ago. (Results were adjusted for the company’s 3-for-2 stock split in October.) Excluding a one-time benefit from a legal settlement, adjusted earnings were 53 cents a share—in line with analysts’ estimate.
Net revenue increased 8.7% to $342.9 million compared with $315.5 million in the same period 2012. That edged past analysts’ projection for $342.6 million in sales.
Comp Store Sales Slide
In its wholesale business, net sales were up 10.6% to $273.4 million with particular strength in the private label business in addition to solid gains in Steve Madden Women’s and Madden Girl footwear as well as strong increases in Steve Madden handbags and FREEBIRD by Steven footwear.
But in its retail division, sales only increased 1.7%. Comparable store sales though were down 6.7%.
“While our retail segment performance was below expectation, we recorded another strong quarter in our wholesale business,” Chairman/CEO Edward Rosenfeld said. “Most importantly, our flagship Steve Madden brand continues to be a leader in the fashion footwear space.”
Gross margin declined to 37.8% as compared to 39.3% in the same period last year due primarily to a sales mix shift to the lower-margin private label business and increased promotional activity in the retail segment.
Operating expenses as a percentage of sales were 23.2% compared to 24.8% of sales due to strong cost control, the company said.
For its 2013 totals, Steve Madden earned $132 million, or $1.98 a share, up from $119.6 million, or $1.81 a share, in the prior year. Adjusted earnings were $1.97 a share. Annual revenue rose 7% to $1.31 billion from $1.23 billion.
Looking ahead, the company forecast 2014 earnings between $2.05 to $2.15 a share with sales expected up 5% to 7%, $1.4 billion.
Analysts’ consensus predicts 2014 earnings of $2.14 a share on revenue of $1.41 billion.
“While we are cautious on the near term outlook for our retail segment due to continued softness in traffic and sales trends, we are confident that we can maintain solid momentum in our wholesale business, and we expect to deliver another year of strong performance in 2014,” Rosenfeld added.
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