Long Island City, NY—For the fifth quarter in a row, Steve Madden today posted double digit sales increases in its fourth quarter report, including nearly a 35% increase in its profit.
For the quarter ended Dec. 31, the footwear and accessories company said net income rose to $23.8 million, 55 cents a share, from $17.6 million, 41 cents a share in the same quarter a year ago.
Net sales leaped 73.7% to $279.8 million from $161 million in the prior year quarter. In its wholesale business, net sales grew 95.2% to $225.9 million. “The growth in net sales reflects contributions from Topline and Cejon, acquired in May 2011, and the transition of the company’s Target private label and Olsenboye footwear businesses from the buying agency model to the wholesale model,” the company said.
Retail net sales grew 18.9% to $53.8 million with comparable store sales up 15.9% on top of a 14.1% increase in its fourth quarter last year.
The results marked the company’s fourth consecutive quarter that it beat analysts’ average estimate—54 cents a share on sales of $266.2 million.
Namesake Flagship Brand Leads the Way
“We are pleased to have ended 2011 with record fourth quarter results. We delivered high-teen organic sales growth in each of our wholesale footwear, wholesale accessories and retail businesses,” said Edward Rosenfeld, chairman/ceo. “Our flagship Steve Madden brand led the way, as we recorded strong gains in Steve Madden women’s footwear and handbags in both wholesale and retail and in both the United States and international markets. We also continued to integrate and capitalize on our new acquisitions, Topline and Cejon, which are proving to be excellent additions to the business.”
Gross margin did shrink 7.7 percentage points to 35.5%, driven by increased costs due to “sales mix shifts” the results of its Topline and Cejon acquisitions as well as adding Target private label and Olsenboye footwear in wholesale net sales. Excluding these businesses, consolidated gross margin would have been moderately higher compared with the prior year’s fourth quarter, the company noted.
Looking ahead to this year, the company expects net sales to increase 21% to 23% with earnings in the $2.60 to $2.70 range. Analysts’ average forecast expects $2.69 a share on sales of $1.20 billion for the year.