Long Island City, NY—Steve Madden Ltd today reported that its third quarter earnings were good enough to beat analysts’ estimates even in a tough retail environment.
For the three months ended Sept. 30, the footwear and accessories company posted a 9.3% increase in its from to $42.9 million, or 70 cents a share, compared to $39.2 million, or 62 cents a share, in the prior year’s third quarter.
Retail net sales in the third quarter were $56.4 million compared to $48.7 million in the third quarter of the prior year. Comp store sales increased 11.2% for the third quarter. Retail gross margin increased to 60.4% in the third quarter of 2015 compared to 58.9% in the third quarter of 2014 as a result of decreased promotional activity.
Net sales for the wholesale business were $357.0 million in the third quarter compared to $343.3 million in the third quarter of 2014. Gross margin in the wholesale business increased to 32.1% compared to 31.3% in last year’s third quarter due to improvement in the wholesale footwear segment.
Retail a ‘Standout’
“Our retail segment was again a standout. Comparable store sales grew 11.2% with double-digit comp gains in both full price and outlet channels,” said Chairman/CEO Ed Rosenfeld during a conference call. “Our retail business continues to benefit from trend right merchandise across a number of categories. Open dress shoes, which have been strong for us all year, lead the way. Our sandals also performed well remaining strong through September as unseasonably warm weather and the customers buy now, wear now mentality lengthened the season.”
Boots and booties, Rosenfeld said, got off to a slow start due to warmer temperatures, although there has been an uptick now that temperatures have cooled off.
During the third quarter, Steve Madden opened two full price stores in Canada, one full price store in Mexico and one U.S. outlet location. The company ended the quarter with 165 company-operated retail locations, including 120 full price stores, 37 outlets, four Internet stores and four joint venture locations in South Africa.
Gross margin expanded 130 basis points to 36.0% as compared to 34.7% in the same period last year.