SHOO - Earnings call transcript Q4 2017

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Operator

Good day, and welcome to the Steve Madden Fourth Quarter 2017 Earnings Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Jean Fontana of ICR.

You may begin.

Jean Fontana

Thank you. everyone. morning, Good joining Madden's for results. for discussion the Thank quarter us and Steve fourth earnings full of you today year XXXX

with results Before could or Litigation that are any risks other future to differ to the on to in we results historical could under statements differ. the to facts as time like involve registration that factors the statements These cause statements. release of the statements begin, earnings made and company's Private to filed company's unknown risks facts XXXX. of herein expressed described information cause statements subject SEC. forward-looking Securities constitute remind implied also forward-looking and Please the this Act from statements factors on the time and results the to and in forward-looking not you that refer actual uncertainties are from meaning actual for uncertainties that contained of Reform historical materially reports call the statements or I'd These

statements of note Nick Director Hosting on are will I any of over Nick. Rosenfeld, today call Reporting. the to forward-looking and today's relied used current and please Finally, be call today's call date. Chairman the With that, Ed Steve upon as Madden; that CEO cannot after Financial Gargiulo, turn the

Nick Gargiulo

everyone. good morning, and Thanks, Jean,

financial results measures. press of Please are reconciliation the to noted. release non-GAAP to below Before that Ed, presented over to financial a call the an like GAAP for turning our unless adjusted I'd on to refer otherwise basis, note

Edward R. Rosenfeld

Madden's full XXXX for Thanks thank results. joining Nick. fourth Good review you and Steve year everyone us and quarter morning, to

high-end implied have the EPS at range of XXXX. of are pleased for delivered diluted We our to fourth quarter guidance the

Overall, a by year We offset our Steve for Solid model. our the category. the challenging Madden. retail both segment boot weakness power lines brands softness of top demonstrating was and the our on in in our and wholesale was despite retail XXXX a of business changing landscape, bottom strength driven business by growth expected percentage in double-digit performance recorded rapidly strong the and

made of on growth that initiatives going for a progress We forward. also key position number us

touch on the me highlights. briefly Let

in division we Women's wholesale business. our the in Madden are flat that share of was behind XXXX enabling NPD, spring had in consumer consumers Madden brand many customers It XXXX XXXX, percentage the clearly we continued also Kohl's. range at exclusively retail, benefits we single-digits had on grew gainer XXXX. XXX year. in grew to sales the customers. strong and and reap floors market Madden more on third-largest of a the investments spring sales its Steve launch Steve Madden Steven basis, significant incremental the the and based our to we fashion according our Despite as selling dollar wholesale his and Women's, down, for extend and are and First Kids the robust a our in Adidas a Men's team a Kohl's in in as only a core well. Madden with footwear as in than to and stores with growing momentum of success that a brand net new or on the also the was the Sell-through of outperform successful taking create NYC, across and into Steve brands by outstanding up wholesale also the many versions percentage also to of another a Women's Madden trend-right year Steve and the market The were competition. was open-to-buy made diffusion select Girl basis Men's over budgets foremost, websites design in performance last of Madden, Madden performance continue wholesale high well. to Both Steve volume best-selling footwear Steve standout, XX% products in XX% U.S. categories we we in distributed doors of over largest And footwear styles. mid-teens Madden taking the strength brand saw the Men's styles Steve NIKE. Kids as was on We of Madden even resonating XXXX initial our at launched the XXX Steve Steve at Women's

& Madden which was our basis sales accompanied of basis styling, gross bags consolidated the also of the Benjamin excluding driver our in with a on on primary by Importantly, Steve increased trend XXXX shoes increase across point for sales direction. mid-teens significant in brand strong margin Madden the the Madden Schwartz the flagship year-over-year of highlight gross basis, the well. terms and the wholesale was business business we footwear attitude as as company the improvement, performance aligned better was margin net handbag XXX Steve accessories Steve and percentage a

footwear, flagship also the been had brand We stronger. extended double-digit Girl, year exceptional handbag in sales think Madden never Madden the brand a an our Overall, brand which percentage was Steve As the has halo for to diffusion it category. increase two in brand.

other the particularly some We licensed also compared and to prior Waterproof brands growth grew of than XX% the each Blondo more saw strong, sales portfolio. our net brand Superga in in year. brands sneaker robust were

International our report for XX% is significant XXXX that international are initiatives, also on in business. to pleased one progress year. important increased most the we of sales our which We growth net made expanding long-term

JV, and each and exceed launched to strong operated which we XXXX Canada June sales delivered continues growth Mexico in our and in directly SM expectations both Our markets Europe earnings.

Mainland ventures and markets two in Yahoo and in We concessions China new launched XX August, in Taiwan. also At e-commerce and on Tmall businesses three and also launched opened we'd Shopping in one Taiwan. one joint year-end, in stores those had

been far Self a and with major represents investment. particularly highlighted Asia we see records at for documentary year, and about We social growth campaign tremendous what holiday, early, at the believe a brands, campaign set While reach of marketing opportunity buzz supported we with Steve also we Throughout Cardi that it's terms created entrepreneurs increased did XXXX, are with worked chronicles the its Also, Netflix, all pleased scenes we can company. Response and came called be and unvarnished ups out Steve our the so Maddman: the and our founder with with behind in collaborated New our The star on in Steve's Madden, brand Vreeland Caroline Steve found pop engagement Madden of the We of Story, downs GQ and location of a at opened a capsule bags and Square We and York movie and called heart iTunes. flagship City. on a media the as Amazon overall. of shoes life with B in brand. We Times this face the outstanding. has men's collection Made. end look the the for to

build in licensee in year. XXXX was the the Spade expand acquisition XX the platform a Schwartz Schwartz months that $XX provides footwear million us net sales both space and and Les highlight more we to and of mature in accessible the and a Avec target contributed is Another designer labels it owned brands in of the XXXX it Filles. It customer. the as sophisticated as footwear Benjamin at Kate & luxury private in & for Benjamin beginning to well

also to and starting $XXX Brian approximately Anne agreement made Anne Klein and rich with in shoes, & the fall a for Klein re-launching our nice average of complement to XX licensee booties $XXX adding Schwartz American portfolio. timeless it's be are Klein to for years other classics, for has Schwartz heritage Italy We XXXX footwear and Atwood Anne in on we unit going signed XXXX brand Benjamin for handbags and brand Benjamin brands The retails XXXX And portfolio & the the platform recently we'll as its the an the with with in boots. back a for products to become $XXX shipments. dedication

half million $XX sales the We shipping, half net of in first the of Anne first back under months XXXX the are Klein million XX which of encompasses in brand targeting $XX the XXXX. to and

to and over board results investments company continued XXXX on of company strong balance significant return testament year was $XX business our employee capital made the repurchases. has healthy Steve opportunity share stock very for we our directors including I'll quarterly a traction X% to well of repurchases acquired approximately acquisitions and that a Madden reflection our The repurchases. our few of our last through continue we milestone continued for in significant growth long-term increasing We in financial business We well shares, brand, shareholder sales capital intended shareholders our form with as the the as cash turn view leg and to market in strategy are with well shares that, dividend investments of proven years settlement some the million, In to net or to confidence the the of challenging of it to added X.X the shareholder also more commitment morning, momentum Based of strong new the that has and good and the XXXX, detail supplement sheet brands. well-positioned summary, dividend. international retail for a in delivered Nick and With entered future. our flow environment. important value. return enhance first another when model initiation We Finally, believe and and our financial outlook is share the announced flagship as awards. to ever in this we our as the we free open over strong newer provide in business of as the drive resilience a we as our and our year This utilize returns million We over cash for for approved in to face a long-term. review our to bought to XXXX. earnings generate as prospects to company's in its as back performance

Nick Gargiulo

Thanks, Ed.

fourth net increased consolidated million & million. $XXX.X contributed the Our net sales we Benjamin to prior acquisition, Schwartz in X.X%. compared impact consolidated which the sales $XXX.X million. sales net footwear X.X% When net quarter from to increased exclude XX% million to increased net our sales, Wholesale $XX.X sales of $XXX.X year

sales increases in impact $XX.X decreased X.X% net a $XX.X our increased and private sales sales Benjamin, million wholesale Johnson in million. the with to & Wholesale X.X% net accessories, of Betsey businesses. by segment, X.X% branded label our retail decline footwear Excluding Schwartz driven net both increased handbags. In to

Our same-store category. softness in the increase last by sales decreased driven year X.X% X.X% compared boot to

as well During full and one China. one as full one store store the fourth locations, the Internet and XXX price in the quarter, we ended in in and four retail XX opened We quarter one including price store stores. with outlet company-operated U.S. outlets Mexico

and fourth the opened XX in the concessions during international ended six quarter, addition, In in company-operated we quarter concessions Asia markets. with

other income. to Turning

the in last licensing million $X.X Our net compared year's expenses fourth royalty was $X.X million quarter income of to in quarter.

expenses year. to XX.X% in compared a Our commission income compared gross to points first year. compared decreased XX Wholesale of last million year. XX XX% cost XX.X% Consolidated of to was to XX.X% last loss to prior $X.X points margin decreased the $X.X gross million margin basis net basis

of to points & versus Benjamin, wholesale basis increased XX% expenses of totaled net income in basis of sales year for gross sales Operating Retail margin $XXX.X to footwear net of same of the in points expenses to or quarter segment. net or XX.X% to due $XX.X million, increased compared fourth operating prior $XX.X the sales. compared XX to quarter or year. to income expanded $XX.X period XX.X% the improvement million, million, year's Schwartz last margin million, operating in quarter for XX% compared or gross last the XX of the prior year. Operating XX.X% Excluding sales margin net XX.X% wholesale the

XX.X% compared last Our year. the same effective quarter the tax period for was to in XX.X% as rate

diluted $XX.X $XX.X million, per for Finally, to $X.XX income share per $X.XX the of share quarter quarter or XXXX. in or diluted the fourth was net million, compared

the to would like I in on billion Consolidated results. year. full $X.XX for prior from XXXX increased Now, XX.X% net briefly touch year to sales billion $X.X

increased from to net our or impact & $X.XX of or per for Schwartz XXXX. $X.XX acquisition for sales, was the sales diluted which income XX, million, compared income XX, share the ended $XXX.X diluted the $XX December Net XXXX, per million share year year net Benjamin Excluding the consolidated ended $XXX.X December in X.X%. contributed million, net

the Moving to sheet. balance

Inventory levels controlled. was equivalents cash we securities Total million. in no and cash, As end the well of December QX at XX, $XXX.X XXXX, were and million $XXX.X had inventory debt. marketable of

year. XX.X% Benjamin, decrease was $XXX.X Schwartz the prior a million, compared to inventory Excluding &

months XX, turn CapEx our in bringing XXXX last Our was was full million CapEx ended $X.X XX the million. for the to times. consolidated inventory $XX.X X.X December quarter year

shares During employee both the approximately of repurchased we shares stock million net and through X.X shares for approximately for the quarter, approximately million, awards. repurchased for XXX,XXX full $XX.X of include we which $XX.X settlement acquired million, year the

As of the initiation of XX, XXXX. record the has The directors approved XX, of business will close quarterly payable per share Ed quarterly mentioned, the XXXX dividend board of dividend. company's on cash on $X.XX to of of as stockholders a March initial be March

guidance. to Turning

the EPS range the due to diluted be year due $X.XX the XXXX, first projected and three of down last of For net December. compensation, assumes to we in Note than we the X% diluted rate in tax expect $X.XX. the the and year full QX. for the impact to approximately primarily the higher that XX.X%, rate is timing will reform be to to lower stock-based annual will benefits rate quarters annual rate The guidance growth from in X% tax bill that EPS passed related tax expected then a expect quarterly to of be than the XX.X% that tax sales of

the from unusually In distribution be is front line was earnings terms earnings half roughly is weighted which historical second-half, first-half, with half. of XX% XX% seasonality, which to overall is by to seasonality different in but expected XXXX, the

to turn like to it I'd the for questions. operator over Now,

Operator

And you. Camilo Genuity. our go we with Thank from question Lyon ahead. will Please first take Canaccord

Camilo Lyon

guys. morning, Good Thanks.

Edward R. Rosenfeld

Good morning, Camilo.

Nick Gargiulo

Good morning.

Camilo Lyon

So, on Ed, bit you I touched could a just the was hoping just little give color, of seasonality. Nick

XXXX bit comparisons out given growth you season? really be in from opportunity good May You've little just perspective core you're the see seeing business the of play on the Madden and a your there spring where touch of what had tough how trends orders spring in the that the years. couple Women's and for past should and

Edward R. Rosenfeld

Madden Yeah. key all If good continues the business we continue sell-through with the have particular, to of good. to Women's Steve I about our think in be accounts performance we that and think momentum

So think I still taking we're there. market share

sandals, on. what shoes about with in terms closed-up spring dress good very of excitement feel Had and things happening also wedges, we Lots good with in see We trends. sneakers. newness flat of some some coming

I good the in good year is overall pretty feel we So, very there was That and being collections get environment. the a Steve gotten Madden retailers and those some that about said, about growth dramatic had pretty to – think first and inventory good low that Women's trend certainly about I everybody last to aware levels in Steve very half had in that little of restock restocking, some in Madden too bit in-line. think was

we half we've I bit half. So more think the probably have while in to opportunity the then much first cautioned more in the little muted. in business Steve well, back continues that perform Women's people should be Madden And growth a

Camilo Lyon

what unfold thinking your trajectory you've just progressed how of China, piece there? months? the sales about And is there next learned into see growth XX how just XX about that you accelerate from algorithm? then what to entry talk you really your the over to the appetite And Can of Okay. the growth

Edward R. Rosenfeld

Yeah. Sure.

still of there's the that process call and by cognizant and but in in a test I and the also far, what with are and the we It's learn marathon, that here. of and sprint we in to think So encouraged be phase. that fact going kind a not see a we're so would what both launched we're think in August Taiwan we I China Mainland large I

bullish seen the very XXXX. and to remain haven't opened really and prospects anything in moment locations would to we think the terms bricks aggressively think otherwise, on that in I long-term openings. mortar on don't us this XX at there that lead ready While accelerator of We about step location we're

shop-in-shops at XX And moment a it number I expect think would in and I I XXXX. was similar do X that to stores. this say

what but working that meaningful think we merchandise might is of the seen like I that are terms frankly, a that there what our so differences that faster, compared to China right over now little us I think go in or in is we've in to see some the JV partner works far U.S.

want really we make push we merchandising growth. get sure so to right that And we before hard on formula really

I'm our a meal to in where months that. in confident the able As done testing to he lot that next do CEO test-and-react we And first serve before China. start there. of in right of couple we're customers. meaningful says, going products strategy business implementing we've to really that's to really We're get going It's the the wants way to that recipe very market the that international a and in process, our of be

that be to do that push so I'm we'll on that And confident right, want get openings. before able hard to location the we but we

are making grow e-commerce forecast our business in and region. XX% up course We that the sales shows moving e-commerce about current in our aggressively of to of XXXX

Camilo Lyon

That it. just and both business back in core, of looking and the the smaller success kind then you've at retail, brands. all makes Got And aspects wholesale of sense. stepping had

like long-term business this of what can you about get As margin business, do to? you EBIT think the opportunity think the

Edward R. Rosenfeld

think been we've the some and that for in there's XX% Well, there. last margin around EBIT years. do opportunity few I expansion

long-term I let's some our we're in formal newer in brands. Klein I We're say target, remarks. the the We're a investing obviously XX%-ish in investing investing Asia term, in also investing. for Anne but also near one, mentioned good in think is capability. we're e-commerce

a it's goal. but or an longer-term think I not goal, So that's probably XXXX XXXX

Operator

Yruma Capital And from we'll KeyBanc from Markets. Ed take over next question

Noah Zatzkin

taking Noah for on for Thanks our questions. Hi. This is Ed.

margin how Schwartz of then about the term gross any talk over it think year? there about margin wholesale opportunity a it puts to And in in quarter. on time? margin was brand's Can and bit broader gross structure just kind as with you the the near move business? we through & should Benjamin, we just you see any of Is bring that line drag takes First,

Edward R. Rosenfeld

Yeah. a it's and It particular, in average with branded lower piece wholesale all mind business. two and line Schwartz with Brian the it's of got a pieces company of the will so & structurally never it's gross Atwood, it's in in just piece licensed. Benjamin, label be branded everybody essentially because private the understands, keep margin exception

call be XX% up the was reduces this Benjamin to can margin. push therefore which and business top won't that think improve reduce average. reduced gross it I to And We gross little licensors, inventory get we between it with levels inventory about we'll time, previously so able and less said, the believe a talked & the We margin. some X% Schwartz with being off it we've paying run that do gross there's allowances the That that the again, over us last you're there that to the opportunity for But run markdown obviously the and bit. time. control think company closeouts that over we than think to and was there. margin I

margins, XXXX, was which second right? of question respect to gross of terms your the is In part with I that think

Noah Zatzkin

Yes.

Edward R. Rosenfeld

by flat it's did footwear, retail. Maybe essentially, segment think with basically that would say, even really accessories or for in but looking in a for margins I if wholesale we Yeah. looking flat look wholesale we're we at in segment, tick down gross I And up XXXX. and by what line that we're XXXX. roughly

Noah Zatzkin

remind Thanks. are the And during this of business, more, then the maybe And you growth how of what great. that is? how some XX% opportunity maybe just the you time? drivers business one And about Men's over us then the thinking Okay, quarter? maybe can large on were

Edward R. Rosenfeld

the about Yeah. think in we're Men's seeing Men's emphasis We and with about we've business that late. XX% of more business, really overall team. of talked we is we pleased put our we're what upgraded how on

marketing year also stronger last more I Men's. We assortment just balanced. the previously considerably the had And more and is in over product also than invested think in we much

well. was what or working boots, what's working Chelsea of terms QX, we're in doing in very So

to our smoking been sort slippers good. we continue very of with well of We boots, have Chukka any been casual looks do got some good, that dress have

across us strength as categories, range So feel seeing head of makes some we which really forward. a good

Noah Zatzkin

Thank you.

Operator

from ahead. go Erinn we take our Piper question Murphy And will Please from Jaffray. next

Erinn E. Murphy

go Great. X%. I to back morning. of the X% Thanks. guidance Good I sales guess to to wanted

I partial a Anne of think year that includes Klein.

X.X% pretty curious building to seems out, or so organic So like blocks our pretty because back that were you to either time underlining by conservative bit like a the like if can brand it seem by you does (XX:XX)? on just more by is really little conservative, the a spend it if just X.X% it's channel, estimate,

Edward R. Rosenfeld

Yes.

in that for which So something a that offsets impact there's half. the in actually at, you're accounting Anne that back Klein Payless looking change is

the business we've top going agency So but the agreement, in of based we that a is And out largely of now first result which line that back Payless, will Payless buying new them Klein impact. the actually move to with year. agreement offsets half believe with new the cost Anne increased line signed and in the into on

fact Klein shift, reported to of it and X-and-change you're on that if sort than excluded XXX consolidated looking would the you be In basis net if to X-and-change. positive, both Anne Payless basis, of so X% X% point of a less sort at is the

Erinn E. Murphy

Got it.

then your you helpful. very early a seen little a what Thank talk in you. And I that bit online. we've that's buzz think focusing Could that? about it's more of stores your lot kind from program, on still and Okay. more you're loyalty in performing? how That's maybe learning days about

Edward R. Rosenfeld

Yeah. it. excited about We're pretty

off we're a good I start. think to

As a here. you it's been said, only for few months around

our to November, people into And XXX,XXX you to I a up, program frankly, to months first the big six get to to year, in sign the is getting year and goal I people was get and first think want got we up that sign-ups. running the got say. for goal just the

at week. think the we're to going XXX,XXX end of this get I

But the pretty a pretty with that many into people use about how early don't their about Frankly, the you behavior excited tell just that beyond it's or it's give how too best customers we're our it data to excited enough to we're pleased have how is little very we this going because going us getting about on working that program. we forward. history. and and we're we're So can

Erinn E. Murphy

sneak If just is you. declaration can I Thank buyback with can the for thinking that's assumed just How in more, Thanks. any XXXX? then you're if of mean this one Okay. I the dividend buyback? talk about you And there morning, changed? the about in the guidance

Edward R. Rosenfeld

we're Yeah, the Sure. it has changed buyback. not about thinking how

mentioned I in finding supplement really shareholders our of course As remarks, capital the form to the our allocation the course, then acquisitions, investing as view first, strategy to the share in priorities and returning of in dividend earlier are of a second we great repurchase. capital existing business where

and few didn't will be years. as said, still the and about at That last with the it that we'll consistent past doing So over we been we've be share something consistent very repurchase just build guidance looking we that's before obviously practice. did into

Erinn E. Murphy

Thank you.

Operator

our we'll question Stichter And next Janine from Please ahead. go from Jefferies. take

Janine Stichter

Hi, good morning.

changing about on we those in becomes complexion the get some you. to along meaningful progressing as as spring we we lines, about less and AUR the should more wanted transactions think the get think and Just the terms through of boot headwind into retail comps moderates? how should Thank boot year as headwind how color then the

Edward R. Rosenfeld

as because not that about say comp can I lot guidance. provide rule whole do a a we not there's Well,

a in are looking you're it thing mirror is the in forward still to is a we that having the not fourth percentage one rearview business it's as was that boots part. certainly that accurate as a to though because first big alluding fourth, and of think was clearly in in drag meaningful I

some still creating rearview mirror. the looking so headwinds, so definitely to in that having And it's forward

should As quarter. you as that the in point been meaningfully out, an move and headwind, source AUR it that Feeling fourth be really pretty January quarter. we in us boots February, second again behind into felt has of and

Janine Stichter

you about in we specifically thinking in a anything wages SG&A, mentioned Asia know just be on year, then Okay, this investments of e-commerce, be we great. that And else and of? I headwind just kind anything some for about aware should else the thinking should as

Edward R. Rosenfeld

the think obviously we're mean, there think look the – Asia. is I Anne some No. some related one into is We have are that built taking bit to some biggest of on really little Klein wage pressure. I a business, forecast. We've but expenses there the that I

we've Asia a of associated in got sales year, SG&A we're plan think million be rate. should up for with looking $X think, about should up I think SG&A to XXXX. well or X% I thereabouts at SG&A be the overall, I X%, fairly this if that But, controlled similar

Janine Stichter

Got it. Thank you.

Edward R. Rosenfeld

Thank you.

Operator

And take we Research. will from Citi Ghinst Der our from next Van Corinna question

Corinna Van Der Ghinst

Payless called EPS start more too the but by the versus was your a Ed. just then morning, I back down detail, the you pressures? if Good that the was I'll to for for prepared wondering half for accessories as wholesale hoping weighting, first half you with the little guidance remarks I ask the fiscal Hi. the in the share details try what breaking not guys questions. could you full year, to assumes lock and and out on footwear the many bit just on cadence – for XXXX. know I

Edward R. Rosenfeld

Sure.

Okay.

So, wholesale out way, the footwear to then let's – this high X% mid-singles; at put we singles. I'd wholesale – you we and put it wholesale gets overall, X% to what That's overall above. then basis. the wholesale if second consolidated that retail, say of a little bit bit little and wholesale would that sales, footwear, question And overall a within is wholesale a Wholesale wholesale, below accessories look seasonality on say was I – right?

Corinna Van Der Ghinst

Yeah.

from any year parts the and there? the I started think last lapping you're just in what year, Payless given the of kind Just earlier moving pressure of

Edward R. Rosenfeld

to moving of Payless you're I year. moving cetera. think I it's should be because right, be on half, parts sales – growth Anne just of Yeah. back got probably about easy Maybe Then year in, in the from et the basis. this it similar a you've better the the – talk Payless going to out, what mean, consolidated EPS. coming consolidated the a prior we said about I'll Klein lot there's than have because, Definitely, half to to just first

Corinna Van Der Ghinst

kinds then the growth Thanks. And for Or months categories? see if XXXX. Thanks. Okay. a where for is as Where the the business big you've this for times of a growth over Blondo for of today? the guys meaningful called opportunity are what what last doors are there? year, distribution into? terms few And in are you thing that expanding couple of out you remind real you opportunities us you your how going Can same opportunities men's,

Edward R. Rosenfeld

Yeah.

break So Blondo, year as it's been be It's the distribution and relatively some new and new new brand, last that opportunity stores our going years doors we I a has you but over rapidly been be are don't with to with we smaller growing very alluded are stores guess, out by couple new brand. seeing accounts to respect to – specialty it – within – includes both should existing department expanded accounts. and this this both sales

Blondo all also there's in Blondo. are historically and and historically all that we've expansion. It's for of is, got thing some been folks or been at looking booties, obviously, category I about almost for other women's, product boots we've all think, some got an categories men's sneakers. We've opportunity It's really The sort got and women's. other

terms distribution, men's, cetera. but better with stores, e-commerce department it's of it's the new distribution. retailers, suspects, the brand not existing the usual the In really et expanding It's

Corinna Van Der Ghinst

much. so Thanks Great.

Edward R. Rosenfeld

Thanks, Cori.

Operator

next FBR. B. our Sinderen from take Riley Van we question Jeff And will from

Jeff Van Sinderen

that derivative if this sneaker Good what touch bit wondering about are but more sneakers, can on, plans you guess, for and little wondering the about you I Just talked what sneaker a the just outlook the business classification? and you year? for is, morning. Ed,

Edward R. Rosenfeld

continues that We very don't to slowing And category that really it. be seeing working feel different we for the that of mean strongest good I growth the Yeah. down There at – a about all. us. sneakers. things see lot momentum in we're is

some particularly very slip-ons joggers, next So doing bigger then seen got on now. with, color well. very a still early with we're that strong new thing are way are very the And we've going right do trend, lace-ups, well High much doing well is but with be in – delivering or we're tops for these good we sneakers, we a have month new dad over the our so. reads blocking us we've that which that's and – to

Jeff Van Sinderen

some know, stores there's Okay, thinking retail your anything around And compare, get then of And but to just just a good. sell-throughs Is of, calendar can spring traffic moment. boot I so the mentioned wondering in anything spring stores? maybe kind how XXXX I you're back about you I own or if far products I own say weather know but the could this markets guess in for we about your excluding early, the then, it's warmer the year. that? you and shift and boots, holiday guess,

Edward R. Rosenfeld

is I of calendar there's Easter terms I it. earlier in year. this guess magic shift, the to mean, I Sure. don't think much

will help us in March. So that a little bit

the is quite in terms good but wasn't of in In something really Wedges I seeing as what I We're things sandal us for boots, a broadly. well probably seeing most doing very lot this that's of said, other sneakers think of we're important also last the year. year, category the important. that outside categories

well. some well. still mentioned got then up year whereas dress bling, dress wedges include are are the are flat these with it sandals, we And would band I got toe, call like in good. both flat opened doing rhinestones opened doing rope closed pointy We've a bottoms category, shoes it some that very up also still dress that Footbeds or about categories good. got we've in working, Anything and dress So bottoms. are glitz sort wood all up sandals with dress. all of was ago, like one closed We've that some but

few about. So, categories good that feel we quite a

Jeff Van Sinderen

the Thanks taking best of my Great. rest And for the of luck for questions. quarter. Okay.

Edward R. Rosenfeld

Thanks, Jeff.

Operator

our Tom And next Fargo. Nikic question comes from from Wells

Tom Nikic

found Hey, appealing contribute add Ed. business? the into for my to wondering good your you morning, about think about sort question. you that you can partnership of new business? was I brand Or Anne and Klein, Thanks it what just that was with taking the to what

Edward R. Rosenfeld

Yeah.

a serves we and with mean Madden go we great perfectly of So, we true little and women's dominant Anne there part one to a really I we & of the prepared is remarks have was and after, of rationale – a have think platform Schwartz of call more other really build the we acquired platform. an that of really fits we the there when leading to Steve this And young, And & Benjamin customer. think position a customer businesses, the in on a I that by in to the With our business what – felt and was in that business. brand some Schwartz more mentioned this Benjamin, Klein slightly – trendy bit or sort customer. footwear that opportunity the the older part targets touched mature

brand, for when in-house. In the its actually big a over XX fact, it years. day Klein very owner really back Schwartz business took until licensee the the And for in XXXX had & hay was had Anne about brand Benjamin

job and on they they So we can that understand – can a think Anne we the it that with really business great Klein do platform.

So we're excited about that.

Tom Nikic

just And that. follow-up quick it. of sort Got a to

able got you've doing brands about to Anne we brand does without & on Benjamin, your and you'll outright it you're a should Schwartz think How we just and Should kind Schwartz you're & depend with can guess that M&A, sort of M&A sort actually when going now maybe or now you about of strategy think Benjamin Klein forward? circumstances? less the add bring brand. to So I what acquiring the of you'll in do

Edward R. Rosenfeld

Yeah.

the right interested certainly well, basis. we'd circumstance we but I acquisitions. in front. a looking still think remain Clearly, Nothing there in have capability for on that the right it's licensee the has really a to buying outright. out case-by-case We're brands as changed be

Tom Nikic

right. year. much. of this All very Thanks Best luck

Edward R. Rosenfeld

Tom. Thanks,

Operator

Please Chris from ahead. comes question Svezia next our from And Wedbush. go

Christopher Svezia

think my very curious, growth, much X% how growth. we to do Ed, I'm for about Thank you just international taking questions. to that X% total company the relative

thinking Just XXXX? that for how about you're

Edward R. Rosenfeld

business, move be But, strong as as business certainly. the international small is Obviously, faster. It's much it yes, of growing should a doesn't the so needle the domestic part relatively still Yeah. double-digit grower.

Christopher Svezia

I retailer. Okay. on. Vita went know necessarily. given numbers Dolce you on as what with don't the That had going And subside with XXXX year regard But a specific one just to give seemed was difficult to brands, particular

Just think you about as any XXXX? thoughts that about brand

Edward R. Rosenfeld

optimistic to going get that we're that turned I'm Yeah. around.

at spring is I a sort year of of to little because the But following playing a the tough XXXX is a and given good if bit down news think in spring get that season. year you you tough challenge tend the of have real a is Dolce as early some XXXX with our some some in much the we're product They've performance, working Vita. on heels, sandals and some are spring got nice really seeing stacked improved, things well. sales well, retail, hits sell-through flat that

on be sell-through So should think get the positioned I we direction improved that that right going moving in performance, based to that forward.

Christopher Svezia

business, with perspective? do but know revenue finally, year? assume And you what just of to And some level positive to least have the a the guidance, to fair you that to Okay. are comp looking you it retail growth, give regard digit get I comp is that at don't high-single to store would from growth for

Edward R. Rosenfeld

Yeah.

U.S. openings in of the terms and closings, in So

retail or in to Maybe that to closer. the think significant be the line. Stores so and the I a the and up growth will opener. Again, of forecast. I that's will comp I'm by think the stores you, end though, be XXXX overall net we'll part the remind not net going I top X% may Asia basis. a on net in in then we'll a of comes address year on international business be net, assumption segment we'll a the X in XX be X% the down be

Christopher Svezia

Thank Okay. very it. you Appreciate the all best. much and

Edward R. Rosenfeld

Chris. you, Thank

Operator

from And our next Buckingham question comes Research. Scott Krasik from

Scott D. Krasik

for my taking thanks Hey, questions.

questions modeling some there. Just

sort in the of you private label? brand out Madden year, Steve it if can about did versus other this billion the think versus that So break $X you brands or footwear so wholesale you just

Edward R. Rosenfeld

I that we're then over other label. of it again, the represents detail, total, think, look, Well, I at not brands our the Steve little going is if but the to consolidated, fact a do we've private brand about balance talked that and publicly mean exactly look in XX% and you Madden

Scott D. Krasik

two? how private does – evenly between And the sorry, other split

Edward R. Rosenfeld

exactly. Yeah,

Scott D. Krasik

does more evenly any spring And there one or then season? like Dolce of – split more is business. is skew Is Klein it Anne Vita a

Edward R. Rosenfeld

It's bigger bit actually pretty split in are a evenly. the I actually mean evenly. little I is half, split but pretty businesses Anne Klein think back most

Scott D. Krasik

licensing out? gross then that have Klein do you positive I be gross there, margins, the a Should balance coming And obligation which versus how assume a Anne you the Payless net to margin?

Edward R. Rosenfeld

I in for pretty margin sort and want of Keep for in think Klein to mind, baked there's Anne gross conservative that we Klein the We've overall in middle into Yeah, but very I assumption But terms here, in Anne this opportunity make point that profitability. time. initially. stepped a breakeven assumed about to the over improve we've it's of one year is modest.

assumed So that bringing we've in, sales the we're profit in all the contribution. back-half, no

Scott D. Krasik

on there then Okay. distributors, just uses last Worldwide, out like a very international, lot sells profitable. a That's interesting. it And pairs, you of Wolverine models have

leveraging in XXXX? XXXX the as got look spending the fast of beyond particularly and year growing this a very we You've and is at lot you your who hopefully money the strategy, future. SKECHERS, but How characterize would

Edward R. Rosenfeld

off financial originally your distributor investment, all as market direct-from-factory inventory. or know, evolving model that's work I nice own They have doing think cetera, market essentially and goods them build They how partners a to out. because the it's way going start There's risk. et stores. of lot a you're we're the over the not selling it's It's basically when great on mean basis. XXX% a it's new the They're you sure a time. we take started our low I partners and the risk. distributor to to

course, it's also Of margin. lower

Europe And to joint now Asia done ventures over Africa. and when us as and markets of of to but much South So for of lower well and works. it transition an key time, we've risk ownership starting Mexico, lower well much bought Canada the as some of model. we're profits for We as more

East, here. very we for we're what in under are we're balance think markets I a have the happy some with doing instance, So model. There a distributor Middle

directly-owned them think make to will it potentially and sense some way, subsidiaries. there I venture markets makes we to over time probably remain are that be think joint a that but that

Scott D. Krasik

profitability, on strategy? profitable do you see this just in And being early that

Edward R. Rosenfeld

margin a It's is on operating The very Yeah. market-by-market Europe SM already profitable basis. discussion. JV an

I basically assumed think We've some that's XXXX. time. to in Asia going take it's breakeven

by going vary So to it's market.

Scott D. Krasik

Thanks. Good luck.

Edward R. Rosenfeld

Scott. Thanks,

Operator

Susquehanna. Poser comes from And ahead. our go next Sam Please question from

Sam Poser

the have answered. Good morning. Most questions all asked been and

real sort of with women's other you that what us a building out tasks Difficulty] give you're Benjamin there on of more footwear Klein, what Anne Just and traditional the quick, seeing M&A color (XX:XX-XX:XX)? out on Schwartz can & more sort on [Technical business and little

Edward R. Rosenfeld

of part Sorry, hear the last didn't that. I

Sam Poser

of expectations space kind so add on for Benjamin, brands their what charge of, you're you are to Sort give to portfolio to and time? And M&A over sort portfolio? but what especially what You've the right in & that, then I'd Benjamin in kinds may that & them, do at, other sort now of of you like that of going you Schwartz your answered seeing you're now? know have of looking kind to brands Schwartz

Edward R. Rosenfeld

where we that think label. really it that business. think go we we Yeah. and private it's I mean both will that more Well, include see a what that I before. mature after I said women's brands platform And as can

what label other there's opportunity we business. that private that a do private to label there our with is nice think I complementary

So that's something interested that in. we're

it after et more also brands, platform us higher-end go the gives luxury, cetera. to course, accessible Of

we'll to So look continue opportunities at there.

that we're disciplined there's something, to company we're do we're of not anything but and find hope opportunities, we terms to In at the on that there reach sure and we're think much the to be out and well. it about strategic going price say than other we we'll going not M&A can continue going to front, is make looking for as we I

Sam Poser

on All success. right. much Thanks very continued

Edward R. Rosenfeld

Thanks, Sam.

Operator

Marotta from next Associates. Steve & comes King our question C.L. And from

Steven L. Marotta

Two morning, questions. Good Ed. quick

international openings concessions X are store there? XX. that unit count as that Do the mentioned you one to all, of First net

Edward R. Rosenfeld

were those freestanding sorry, I'm stores. No.

Steven L. Marotta

Okay.

Edward R. Rosenfeld

So in if addition that's opened XX thereabouts to we or concessions that.

Steven L. Marotta

Okay.

X% accurate? It the review you maybe Could The with the had is on what's but A, shown is, had other balance year-over-year. sheet misunderstood. is in that seem sheet, commentary balance earlier question you call? I didn't inventory inventory reconcile the on the I to down

Edward R. Rosenfeld

it's we down down exclude it sort & year-ago Benjamin consolidated then of because X% Schwartz from XX.X% yet, Yeah. a It's didn't you if own like-for-like.

of very And so, is end clean inventory at the obviously, the year. the

I think there's on things couple a there. going

controlled, was it was just it is, very importantly most it well very – clean. one think I

transit. addition, because itself. in it was a In back we New the as up keep Year in reversed year moved of more though, Chinese earlier had Chinese of And also goods Year, year-over-year that it ago, piece mind, New

Steven L. Marotta

Thank Excellent. very you Helpful. much.

Edward R. Rosenfeld

you. Thank

Operator

back And additional to this remarks. question-and-answer like concludes Rosenfeld to call today's the session. for any I Ed Mr. turn would closing or

Edward R. Rosenfeld

to Great. Well, speaking and a have with thanks everybody forward next great day. this us for on joining We look morning you call. the

Operator

may concludes this you for conference. disconnect. today's and your And Thank now participation, you

Steven Madden (SHOO) 27 Feb 182017 Q4 Earnings call transcript