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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Steven Madden Ltd | NASDAQ:SHOO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.72 | -1.69% | 41.77 | 41.06 | 42.50 | 42.67 | 41.73 | 42.55 | 404,011 | 21:05:06 |
Amounts referred to as “Adjusted” exclude the items that are described under the heading “Non-GAAP Adjustments.”
The Company reclassified commission and licensing fee income to Total Revenue and reclassified its respective expenses into Operating Expenses from previously labeled Commission and Licensing Fee Income - Net on the Company's Consolidated Statement of Operations for each period provided.
For the Fourth Quarter 2020:
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “While the COVID-19 pandemic continues to have a negative impact on our business, we were pleased with our results in the fourth quarter, which exceeded our expectations and showed strong sequential improvement from the third quarter. We faced unprecedented challenges in 2020, but we relied on our strengths – an agile business model, a strong balance sheet, and our talented and resourceful employees – to successfully navigate the crisis. We continued investing in our brands and our digital capabilities while reducing expenses in other areas, and we utilized our test-and-react strategy and speed-to-market capability to quickly adjust our product mix to align with changing consumer preferences.
“As we look ahead, we remain focused on delivering trend-right product, deepening connections with our consumers, enhancing our digital commerce business, and efficiently managing our inventory and expenses. And while we are cautious on the near-term outlook due to continued headwinds from COVID-19, we are confident that the steps we have taken during the crisis – combined with the strength of our brands and our business model – leave us well-positioned to capitalize on market share opportunities and create value for our stakeholders over the long term.”
Fourth Quarter 2020 Segment Results
Revenue for the wholesale business decreased 16.2% to $263.0 million in the fourth quarter of 2020, including a 19.7% decline in wholesale footwear and a 5.9% decline in wholesale accessories/apparel. Gross margin in the wholesale business decreased to 28.3% in the fourth quarter of 2020 compared to 29.2% in the fourth quarter of 2019 due to the disposal of excess inventory resulting from COVID-19 disruption.
Retail revenue decreased 14.9% to $86.1 million in the fourth quarter of 2020 due to a significant decline in the brick-and-mortar business, partially offset by continued strength in the e-commerce business. Retail gross margin rose 400 basis points to 65.6% in the fourth quarter of 2020 compared to 61.6% in the fourth quarter of 2019 due primarily to less discounting.
The Company ended the quarter with 218 company-operated retail locations, including seven Internet stores, as well as 17 company-operated concessions in international markets.
The Company’s effective tax rate for the fourth quarter of 2020 was (10.9%) compared to 15.9% in the fourth quarter of 2019. On an Adjusted basis, the effective tax rate for the fourth quarter of 2020 was 13.3% compared to 6.3% in the fourth quarter of 2019.
Full Year Ended December 31, 2020
For the full year ended December 31, 2020, revenue decreased 32.8% to $1.2 billion from $1.8 billion in 2019.
Net loss attributable to Steven Madden, Ltd. was ($18.4) million, or ($0.23) per basic share, for the year ended December 31, 2020 compared to net income attributable to Steven Madden, Ltd. of $141.3 million, or $1.69 per diluted share, for the year ended December 31, 2019. On an Adjusted basis, net income attributable to Steven Madden, Ltd. was $51.8 million, or $0.64 per diluted share, for the year ended December 31, 2020 compared to $162.8 million, or $1.95 per diluted share, for the year ended December 31, 2019.
Balance Sheet
As of December 31, 2020, cash, cash equivalents and short-term investments totaled $287.2 million.
Reinstatement of Quarterly Cash Dividend
The Company's Board of Directors approved the reinstatement of a quarterly cash dividend. The quarterly dividend of $0.15 per share is payable on March 26, 2021 to stockholders of record as of the close of business on March 16, 2021.
Fiscal Year 2021 Outlook
Given the continued disruption and uncertainty related to the ongoing COVID-19 pandemic, the Company is not providing guidance at this time.
Non-GAAP Adjustments
Amounts referred to as “Adjusted” exclude the items below.
For the fourth quarter 2020:
For the fourth quarter 2019:
For the fiscal year 2020:
For the fiscal year 2019:
Reconciliations of amounts on a GAAP basis to Adjusted amounts are presented in the Non-GAAP Reconciliation tables at the end of this release and identify and quantify all excluded items.
Conference Call Information
Interested stockholders are invited to listen to the fourth quarter and fiscal year 2020 earnings conference call scheduled for today, February 25, 2021 at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed by logging onto https://investor.stevemadden.com. An online archive of the broadcast will be available within two hours of the conclusion of the call and will remain available for 12 months following the live call.
About Steve Madden
Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo®, GREATS®, BB Dakota® and Mad Love®, Steve Madden is a licensee of various brands, including Anne Klein® and Superga®. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, specialty stores, luxury retailers, national chains, mass merchants and online retailers. Steve Madden also operates retail stores and e-commerce websites. Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including ready-to-wear, outerwear, eyewear, hosiery, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s boots, fashion sneakers, slippers, dress shoes, sandals and more, visit http://www.stevemadden.com.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, or “estimate”, and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:
The Company does not undertake any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments or otherwise.
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
Three Months Ended | Twelve Months Ended | |||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Net sales | $ | 349,066 | $ | 414,912 | $ | 1,188,943 | $ | 1,768,135 | ||||||
Commission and licensing fee income | 3,901 | 4,713 | 12,871 | 19,022 | ||||||||||
Total revenue | 352,967 | 419,625 | 1,201,814 | 1,787,157 | ||||||||||
Cost of sales | 217,655 | 261,291 | 737,273 | 1,101,140 | ||||||||||
Gross profit | 135,312 | 158,334 | 464,541 | 686,017 | ||||||||||
Operating expenses | 112,224 | 138,855 | 451,873 | 505,153 | ||||||||||
Impairment charges | 1,745 | — | 44,273 | 4,050 | ||||||||||
Income / (loss) from operations | 21,343 | 19,479 | (31,605 | ) | 176,814 | |||||||||
Interest and other income, net | 129 | 998 | 1,620 | 4,412 | ||||||||||
Income / (loss) before provision for income taxes | 21,472 | 20,477 | (29,985 | ) | 181,226 | |||||||||
(Benefit) / provision for income taxes | (2,338 | ) | 3,247 | (11,704 | ) | 39,504 | ||||||||
Net income / (loss) | 23,810 | 17,230 | (18,281 | ) | 141,722 | |||||||||
Less: net income / (loss) attributable to noncontrolling interest | 1,219 | (521 | ) | 116 | 411 | |||||||||
Net income / (loss) attributable to Steven Madden, Ltd. | $ | 22,591 | $ | 17,751 | $ | (18,397 | ) | $ | 141,311 | |||||
Basic income / (loss) per share | $ | 0.29 | $ | 0.23 | $ | (0.23 | ) | $ | 1.78 | |||||
Diluted income / (loss) per share | $ | 0.28 | $ | 0.21 | $ | (0.23 | ) | $ | 1.69 | |||||
Basic weighted average common shares outstanding | 78,588 | 78,754 | 78,635 | 79,577 | ||||||||||
Diluted weighted average common shares outstanding | 81,414 | 83,381 | 78,635 | 83,646 | ||||||||||
Cash dividends declared per common share | $ | — | $ | 0.15 | $ | 0.15 | $ | 0.57 | ||||||
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
As of | |||||
December 31, 2020 | December 31, 2019 | ||||
(Unaudited) | |||||
Cash and cash equivalents | $ | 247,864 | $ | 264,101 | |
Short-term investments | 39,302 | 40,521 | |||
Accounts receivable, net | 277,715 | 254,637 | |||
Inventories | 101,420 | 136,896 | |||
Other current assets | 31,940 | 22,724 | |||
Property and equipment, net | 43,268 | 65,504 | |||
Operating lease right-of-use assets | 101,379 | 155,700 | |||
Goodwill and intangibles, net | 283,456 | 334,058 | |||
Other assets | 11,417 | 4,506 | |||
Total assets | $ | 1,137,761 | $ | 1,278,647 | |
Accounts payable | $ | 73,904 | $ | 61,706 | |
Operating leases (current & non-current) | 132,849 | 171,796 | |||
Other current liabilities | 127,755 | 180,941 | |||
Contingent payment liability | 207 | 9,124 | |||
Other long-term liabilities | 12,677 | 13,856 | |||
Total Steven Madden, Ltd. stockholders’ equity | 776,586 | 828,501 | |||
Noncontrolling interest | 13,783 | 12,723 | |||
Total liabilities and stockholders’ equity | $ | 1,137,761 | $ | 1,278,647 | |
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
Twelve Months Ended | |||||||
December 31, 2020 | December 31, 2019 | ||||||
(Unaudited) | |||||||
Net cash provided by operating activities | $ | 44,206 | $ | 233,780 | |||
Investing Activities | |||||||
Purchases of property and equipment | (6,562 | ) | (18,311 | ) | |||
Maturity / sale of marketable securities and short-term investments, net | 1,678 | 27,736 | |||||
Acquisitions, net of cash acquired | — | (37,173 | ) | ||||
Net cash used in investing activities | (4,884 | ) | (27,748 | ) | |||
Financing Activities | |||||||
Common stock share repurchases for treasury | (46,583 | ) | (101,768 | ) | |||
Investment of noncontrolling interest | 359 | 3,248 | |||||
Distribution of noncontrolling interest earnings | — | (1,444 | ) | ||||
Proceeds from exercise of stock options | 1,609 | 6,212 | |||||
Cash dividends paid | (12,459 | ) | (48,426 | ) | |||
Net cash used in financing activities | (57,074 | ) | (142,178 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,515 | 216 | |||||
Net (decrease) / increase in cash and cash equivalents | (16,237 | ) | 64,070 | ||||
Cash and cash equivalents - beginning of year | 264,101 | 200,031 | |||||
Cash and cash equivalents - end of year | $ | 247,864 | $ | 264,101 | |||
STEVEN MADDEN, LTD. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)
The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.
Table 1 - Reconciliation of GAAP gross profit to Adjusted gross profit | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||
GAAP gross profit | $ | 135,312 | $ | 158,334 | $ | 464,541 | $ | 686,017 | |||||
(Gain) / loss in connection with the termination of a joint venture | (532 | ) | 386 | (532 | ) | 386 | |||||||
Adjusted gross profit | $ | 134,780 | $ | 158,720 | $ | 464,009 | $ | 686,403 |
Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||||
GAAP operating expenses | $ | 112,224 | $ | 138,855 | $ | 451,873 | $ | 505,153 | |||||||
Expense in connection with payments / provision for early lease termination charges | (5,083 | ) | — | (13,473 | ) | (5,424 | ) | ||||||||
Benefit in connection with the change in valuation of contingent considerations | 1,213 | — | 6,233 | — | |||||||||||
Recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | 1,081 | (8,946 | ) | 1,081 | (8,687 | ) | |||||||||
Expense in connection with restructuring and related charges | (249 | ) | — | (7,138 | ) | (669 | ) | ||||||||
Expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | (36,895 | ) | — | ||||||||||
Expense in connection with benefits provided to furlough employees | — | — | (1,991 | ) | — | ||||||||||
Expense in connection with a provision for legal settlement and related fees | — | (3,977 | ) | — | (3,977 | ) | |||||||||
Expense in connection with the termination of a joint venture | — | (158 | ) | — | (158 | ) | |||||||||
Expense in connection with provision for loan receivable | — | — | (697 | ) | — | ||||||||||
Expense in connection with the acquisitions of GREATS and BB Dakota | — | (42 | ) | — | (1,120 | ) | |||||||||
Net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | 1,868 | |||||||||||
Adjusted operating expenses | $ | 109,186 | $ | 125,732 | $ | 398,993 | $ | 486,986 |
Table 3 - Reconciliation of GAAP income / (loss) from operations to Adjusted income from operations | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||
GAAP income / (loss) from operations | $ | 21,343 | $ | 19,479 | $ | (31,605 | ) | $ | 176,814 | |||||
Expense in connection with payments / provision for early lease termination charges | 5,083 | — | 13,473 | 5,424 | ||||||||||
Expense in connection with impairment of certain trademarks | 1,745 | — | 44,273 | 4,050 | ||||||||||
Benefit in connection with the change in valuation of contingent considerations | (1,213 | ) | — | (6,233 | ) | — | ||||||||
Recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | (1,081 | ) | 8,946 | (1,081 | ) | 8,687 | ||||||||
Expense in connection with restructuring and related charges | 249 | — | 7,138 | 669 | ||||||||||
Expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 36,895 | — | ||||||||||
Expense in connection with benefits provided to furlough employees | — | — | 1,991 | — | ||||||||||
Expense in connection with a provision for legal settlement and related fees | — | 3,977 | — | 3,977 | ||||||||||
(Gain) / loss in connection with the termination of a joint venture | (532 | ) | 544 | (532 | ) | 544 | ||||||||
Expense in connection with provision for loan receivable | — | — | 697 | — | ||||||||||
Expense in connection with the acquisitions of GREATS and BB Dakota | — | 42 | — | 1,120 | ||||||||||
Net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (1,868 | ) | |||||||||
Adjusted income from operations | $ | 25,594 | $ | 32,988 | $ | 65,016 | $ | 199,417 |
Table 4 - Reconciliation of GAAP (benefit) / provision for income taxes to Adjusted provision for income taxes | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||||
GAAP (benefit) / provision for income taxes | $ | (2,338 | ) | $ | 3,247 | $ | (11,704 | ) | $ | 39,504 | |||||||||||||||||
Tax effect of expense in connection with payments / provision for early lease termination charges | 1,209 | — | 3,195 | 1,361 | |||||||||||||||||||||||
Tax effect of expense in connection with impairment of certain trademarks | 385 | — | 10,456 | 1,017 | |||||||||||||||||||||||
Tax effect of benefit in connection with the change in valuation of contingent considerations | (282 | ) | — | (1,472 | ) | — | |||||||||||||||||||||
Tax effect of recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | (149 | ) | — | (149 | ) | 85 | |||||||||||||||||||||
Tax effect of expense in connection with restructuring and related charges | 70 | — | 1,704 | 168 | |||||||||||||||||||||||
Tax effect of expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 8,946 | — | |||||||||||||||||||||||
Tax effect of expense in connection with benefits provided to furlough employees | — | — | 471 | — | |||||||||||||||||||||||
Tax effect of expense in connection with a provision for legal settlement and related fees | — | 961 | — | 961 | |||||||||||||||||||||||
Tax effect of (gain) / loss in connection with the termination of a joint venture | (133 | ) | 136 | (133 | ) | 136 | |||||||||||||||||||||
Tax effect of expense in connection with provision for loan receivable | — | — | 165 | — | |||||||||||||||||||||||
Tax effect of expense in connection with the acquisitions of GREATS and BB Dakota | — | 10 | — | 281 | |||||||||||||||||||||||
Tax effect of net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (469 | ) | ||||||||||||||||||||||
Tax benefit in connection with the net operating loss carryback provision of the CARES Act | 4,191 | — | 4,191 | — | |||||||||||||||||||||||
Tax benefit / (expense) in connection with deferred and foreign uncertain tax position | 472 | (2,207 | ) | (1,921 | ) | (2,590 | ) | ||||||||||||||||||||
Adjusted provision for income taxes | 3,425 | 2,147 | 13,749 | 40,454 |
Table 5 - Reconciliation of GAAP net income / (loss) attributable to noncontrolling interest to Adjusted net income / (loss) attributable to noncontrolling interest | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||||
GAAP net income / (loss) attributable to noncontrolling interest | $ | 1,219 | $ | (521 | ) | $ | 116 | $ | 411 | ||||||
Adjustments attributable to noncontrolling interest | (698 | ) | 204 | 933 | 204 | ||||||||||
Adjusted net income / (loss) attributable to noncontrolling interest | $ | 521 | $ | (317 | ) | $ | 1,049 | $ | 615 |
Table 6 - Reconciliation of GAAP net income / (loss) attributable to Steve Madden, Ltd. to Adjusted net income attributable to Steve Madden, Ltd. | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||||
GAAP net income / (loss) attributable to Steven Madden, Ltd. | $ | 22,591 | $ | 17,751 | $ | (18,397 | ) | $ | 141,311 | ||||||
After-tax impact of expense in connection with payments / provision for early lease termination charges | 3,874 | — | 10,277 | 4,063 | |||||||||||
After-tax impact of expense in connection with impairment of certain trademarks | 1,360 | — | 33,817 | 3,033 | |||||||||||
After-tax impact of benefit in connection with the change in valuation of contingent considerations | (930 | ) | — | (4,761 | ) | — | |||||||||
After-tax impact of (recovery) / bad debt expense in connection with the Payless ShoeSource bankruptcy | (932 | ) | 8,946 | (932 | ) | 8,602 | |||||||||
After-tax impact of expense in connection with restructuring and related charges | 178 | — | 5,434 | 501 | |||||||||||
After-tax impact of expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 27,949 | — | |||||||||||
After-tax impact of expense in connection with benefits provided to furlough employees | — | — | 1,519 | — | |||||||||||
After-tax impact of expense in connection with a provision for legal settlement and related fees | — | 3,016 | — | 3,016 | |||||||||||
After-tax impact of (gain) / loss in connection with the termination of a joint venture | (399 | ) | 408 | (399 | ) | 408 | |||||||||
After-tax impact of expense in connection with provision for loan receivable | — | — | 532 | — | |||||||||||
After-tax impact of expense in connection with the acquisitions of GREATS and BB Dakota | — | 32 | — | 839 | |||||||||||
After-tax impact of net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (1,399 | ) | ||||||||||
Tax benefit in connection with the net operating loss carryback provision of the CARES Act | (4,191 | ) | — | (4,191 | ) | — | |||||||||
Tax (benefit) / expense in connection with deferred and foreign uncertain tax position | (472 | ) | 2,207 | 1,921 | 2,590 | ||||||||||
Less: Adjustments attributable to noncontrolling interest | 698 | (204 | ) | (933 | ) | (204 | ) | ||||||||
Adjusted net income attributable to Steven Madden, Ltd. | $ | 21,777 | $ | 32,156 | $ | 51,836 | $ | 162,760 | |||||||
GAAP diluted income / (loss) per share | $ | 0.28 | $ | 0.21 | $ | (0.23 | ) | $ | 1.69 | ||||||
Adjusted diluted income per share | $ | 0.27 | $ | 0.39 | $ | 0.64 | $ | 1.95 |
Contact
Steven Madden, Ltd.Director of Corporate Development & Investor RelationsDanielle McCoy718-308-2611InvestorRelations@stevemadden.com
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