Exhibit 99.1
Steve Madden Announces Third Quarter 2016 Results
LONG ISLAND CITY, N.Y., November 1, 2016 – Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion footwear and accessories for women, men and children, today announced financial results for the third quarter ended September 30, 2016.
For the Third Quarter 2016:
| · | Net sales decreased 1.2% to $408.4 million compared to $413.5 million in the same period of 2015. |
| · | Gross margin expanded 180 basis points to 37.8% as compared to 36.0% in the same period last year. |
| · | Operating expenses as a percentage of sales were 23.5% compared to 21.6% of sales in the same period of 2015. |
| · | Operating income totaled $63.8 million, or 15.6% of net sales, compared with operating income of $66.3 million, or 16.0% of net sales, in the same period of 2015. |
| · | Net income was $43.8 million, or $0.74 per diluted share, compared to $42.9 million, or $0.70 per diluted share, in the prior year’s third quarter. |
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased with our third quarter results, which exceeded our expectations on both the top and bottom lines. Our core Steve Madden Women’s footwear business achieved outstanding growth during the quarter, as did our Dolce Vita line. In addition, we delivered strong gross margin expansion, as our on-trend merchandise assortment and disciplined inventory management resulted in higher initial mark-ups and reduced close-outs and markdown allowances. While the overall retail environment continues to be challenging and our wholesale partners remain cautious, our third quarter results enable us to narrow our guidance range for fiscal 2016 diluted EPS to the upper half of our previous range.”
Third Quarter 2016 Segment Results
Net sales for the wholesale business were $346.6 million in the third quarter of 2016 compared to $357.0 million in the third quarter of 2015. Net sales for the wholesale business in the third quarter of 2015 included $14.9 million related to the one-time Madden Girl cold-weather capsule collection that was not repeated in 2016. Gross margin in the wholesale business increased to 33.9% compared to 32.1% in last year’s third quarter driven by improvement in the wholesale footwear segment, particularly the Steve Madden Women’s division.
Retail net sales in the third quarter were $61.8 million compared to $56.4 million in the third quarter of the prior year. Same store sales increased 1.3% for the third quarter. Retail gross margin decreased to 59.9% in the third quarter of 2016 compared to 60.4% in the third quarter of 2015 due to the negative impact of a stronger US dollar on the Company’s international business.
During the third quarter, the Company opened four full price stores and three outlet locations, and closed one full price store. The Company ended the quarter with 186 company-operated retail locations, including four Internet stores.
The effective tax rate for the third quarter of 2016 was 32.3% compared to 34.1% in the third quarter of the prior year.
Balance Sheet and Cash Flow
During the third quarter of 2016, the Company repurchased 736,730 shares of the Company’s common stock for approximately $25.3 million, which includes shares acquired through the net settlement of employee stock awards.
As of September 30, 2016, cash, cash equivalents, and current and non-current marketable securities totaled $183.5 million.
Company Outlook
For fiscal year 2016, the Company continues to expect that net sales will increase 0% to 1% over net sales in 2015. Diluted EPS for fiscal year 2016 is now expected to be in the range of $1.98 to $2.03.
Conference Call Information
Interested stockholders are invited to listen to the third quarter earnings conference call scheduled for today, November 1, 2016, at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed by logging onto http://www.stevemadden.com. An online archive of the broadcast will be available within one hour of the conclusion of the call and will be accessible for a period of 30 days following the call. Additionally, a replay of the call can be accessed by dialing 1-877-870-5176 (U.S.) and 1-858-384-5517 (international), passcode 5033157, and will be available until December 1, 2016.
About Steve Madden
Steve Madden designs, sources and markets fashion-forward footwear and accessories for women, men and children. In addition to marketing products under its own brands includingSteve Madden®,Dolce Vita®,Betsey Johnson®,Report®,Big Buddha®,Brian Atwood®,Cejon®,Blondo® andMad Love®, Steve Madden is the licensee of various brands, includingSuperga® for footwear in North America. 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 and mass merchants. Steve Madden also operates 186 retail stores (including Steve Madden’s four Internet stores). Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including for ready-to-wear, outerwear, intimate apparel, hosiery, jewelry, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s boots, dress shoes, sandals and more, visithttp://www.stevemadden.com/
Safe Harbor
This press release and oral statements made from time to time by representatives of the Company contain certain “forward looking statements” as that term is defined in the federal securities laws. The events described in forward looking statements may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of the Company’s plans or strategies, projected or anticipated benefits from acquisitions to be made by the Company, or projections involving anticipated revenues, earnings or other aspects of the Company’s operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward looking statements. The Company cautions you that these statements concern current expectations about the Company’s future results and condition and are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond the Company’s control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors which may affect the Company’s results include, but are not limited to, the risks and uncertainties discussed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission. Any one or more of these uncertainties, risks and other influences could materially affect the Company’s results of operations and financial condition and whether forward looking statements made by the Company ultimately prove to be accurate and, as such, the Company’s actual results, performance and achievements could differ materially from those expressed or implied in these forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
Unaudited
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30,
2016 | | | September 30,
2015 | | | September 30,
2016 | | | September 30,
2015 | |
| | | | | | | | | | | | | |
| Net sales | | $ | 408,384 | | | $ | 413,462 | | | $ | 1,063,143 | | | $ | 1,060,989 | |
| Cost of sales | | | 253,876 | | | | 264,691 | | | | 671,388 | | | | 684,694 | |
| Gross profit | | | 154,508 | | | | 148,771 | | | | 391,755 | | | | 376,295 | |
| Commission and licensing fee income, net | | | 5,358 | | | | 6,643 | | | | 10,355 | | | | 13,689 | |
| Operating expenses | | | 96,100 | | | | 89,130 | | | | 272,574 | | | | 253,991 | |
| Impairment charge | | | — | | | | — | | | | — | | | | 3,045 | |
| Income from operations | | | 63,766 | | | | 66,284 | | | | 129,536 | | | | 132,948 | |
| Interest and other income, net | | | 747 | | | | (895 | ) | | | 1,117 | | | | 273 | |
| Income before provision for income taxes | | | 64,513 | | | | 65,389 | | | | 130,653 | | | | 133,221 | |
| Provision for income taxes | | | 20,810 | | | | 22,298 | | | | 38,212 | | | | 45,428 | |
| Net income | | | 43,703 | | | | 43,091 | | | | 92,441 | | | | 87,793 | |
| Net income attributable to noncontrolling interest | | | (64 | ) | | | 206 | | | | 278 | | | | 578 | |
| Net income attributable to Steven Madden, Ltd. | | $ | 43,767 | | | $ | 42,885 | | | $ | 92,163 | | | $ | 87,215 | |
| | | | | | | | | | | | | | | | | |
| Basic income per share | | $ | 0.77 | | | $ | 0.73 | | | $ | 1.61 | | | $ | 1.47 | |
| Diluted income per share | | $ | 0.74 | | | $ | 0.70 | | | $ | 1.54 | | | $ | 1.42 | |
| | | | | | | | | | | | | | | | | |
| Basic weighted average common shares outstanding | | | 56,869 | | | | 58,911 | | | | 57,334 | | | | 59,271 | |
| Diluted weighted average common shares outstanding | | | 59,329 | | | | 61,060 | | | | 59,772 | | | | 61,516 | |
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
| | | As of | |
| | | September 30,
2016 | | | December 31,
2015 | | | September 30,
2015 | |
| | | (Unaudited) | | | | | | (Unaudited) | |
| Cash and cash equivalents | | $ | 62,723 | | | $ | 72,414 | | | $ | 38,654 | |
| Marketable securities (current & non current) | | | 120,737 | | | | 120,889 | | | | 112,539 | |
| Accounts receivables, net | | | 269,853 | | | | 198,384 | | | | 284,835 | |
| Inventories | | | 111,952 | | | | 102,080 | | | | 123,768 | |
| Other current assets | | | 45,426 | | | | 52,517 | | | | 37,965 | |
| Property and equipment, net | | | 74,382 | | | | 72,010 | | | | 71,162 | |
| Goodwill and intangibles, net | | | 282,920 | | | | 286,855 | | | | 291,269 | |
| Other assets | | | 8,375 | | | | 9,236 | | | | 9,693 | |
| Total assets | | $ | 976,368 | | | $ | 914,385 | | | $ | 969,885 | |
| | | | | | | | | | | | | |
| Accounts payable | | $ | 102,095 | | | $ | 79,790 | | | $ | 130,556 | |
| Contingent payment liability (current & non current) | | | 16,682 | | | | 24,775 | | | | 33,179 | |
| Other current liabilities | | | 78,994 | | | | 78,246 | | | | 90,480 | |
| Other long term liabilities | | | 54,957 | | | | 52,911 | | | | 30,408 | |
| Total Steven Madden, Ltd. stockholders’ equity | | | 723,363 | | | | 678,404 | | | | 684,887 | |
| Noncontrolling interest | | | 277 | | | | 259 | | | | 375 | |
| Total liabilities and stockholders’ equity | | $ | 976,368 | | | $ | 914,385 | | | $ | 969,885 | |
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
Unaudited
| | | Nine Months Ended | |
| | | September 30,
2016 | | | September 30,
2015 | |
| | | | | | | |
| Net cash provided by operating activities | | $ | 73,470 | | | $ | 50,148 | |
| | | | | | | | | |
| Investing Activities | | | | | | | | |
| Purchases of property and equipment | | | (12,908 | ) | | | (13,524 | ) |
| Acquisitions, net of cash acquired | | | — | | | | (9,129 | ) |
| Sales of marketable securities, net | | | 2,736 | | | | 4,627 | |
| Repayment of notes receivable | | | 249 | | | | 342 | |
| Net cash used in investing activities | | | (9,923 | ) | | | (17,684 | ) |
| | | | | | | | | |
| Financing Activities | | | | | | | | |
| Common stock share repurchases for treasury | | | (66,394 | ) | | | (103,892 | ) |
| Purchase of noncontrolling interest | | | (3,665 | ) | | | — | |
| Payment of contingent liability | | | (8,048 | ) | | | (2,950 | ) |
| Proceeds from exercise of stock options | | | 4,869 | | | | 21,154 | |
| Tax benefit from the exercise of stock options | | | — | | | | 10,428 | |
| Net cash used in financing activities | | | (73,238 | ) | | | (75,260 | ) |
| | | | | | | | | |
| Net (decrease) in cash and cash equivalents | | | (9,691 | ) | | | (42,796 | ) |
| | | | | | | | | |
| Cash and cash equivalents - beginning of period | | | 72,414 | | | | 81,450 | |
| | | | | | | | | |
| Cash and cash equivalents - end of period | | $ | 62,723 | | | $ | 38,654 | |
| | | | | | | | | |
Contact
ICR, Inc.
Investor Relations
Jean Fontana/Megan Crudele
203-682-8200
www.icrinc.com
