SHOO - Earnings call transcript Q2 2019

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Operator

Good morning, ladies and gentlemen, and welcome to the Second Quarter 2019 Steve Madden, Ltd. Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Danielle McCoy, Director of Corporate Development and Investor Relations.

Ma'am, please go ahead.

Danielle McCoy

morning, good and Tom, everyone. Thanks, thank I'd quarter joining second for earnings like call to XXXX and our you webcast.

these forward-looking in Before and or revenues, we statements our these expectations, of call, certain statements risks, our are may you expectations other on performance that as statements. begin, I'd the projections like we to aspects results. or these predictions the not and known operating and from current relate may control. such, factors future. they laws and Because involve company's to federal And unknown earnings securities the company's remind uncertainties about during statements assumptions results regarding defined Generally, the make our materially anticipated based within involving differ as actual

associated report most refer otherwise, applicable comparable judgment of represent after are of the the or to obligation cannot as filed as result or forward-looking are SEC directly measure with events basis, unless today's in Our new disclosures adjusted other call as this other except we an contained reconciliation law. under disclaim or intent the these. statements GAAP information, risk to date. be A statements update any required the to The to a financial future our discussed whether earnings reports Any discussions relied to and revise the publicly results and noted. any current release. otherwise financial our urge time upon detailed annual as from and of you time include of and We company faces, time forward-looking

CEO that, turn is today it Ed over and of Madden. Steve With Ed. call I'll the to Rosenfeld, the Joining Chairman

Ed Rosenfeld

second everyone, compared for Second EPS with to XX% and diluted increasing quarter morning, Steve strong net to We Results. joining Good year. the Madden's us delivered growing sales and you a Danielle. XX% Thanks, Quarter XXXX review thank prior

accessories and performance exceptional with Madden well footwear the and international markets, domestic was as in the wholesale businesses Steve brand on in highlight, flagship as stevemadden.com. strong both Our growth

recorded headwind sales growth footwear, wholesale segment, the net largest not XX% recognizing company's despite of sales The to Payless. from

business for Steve Our women's increase period us to outperform consecutive core Steve a quarter the year compared consumers wholesale assortments double-digit his sales with third the create enabling to had design team significantly prior and that as U.S. resonating percentage merchandise and on-trend are to the competition. continue well Madden footwear

product success. where out soft the have In quarter, across categories, significant we some a second a of we sandals, saw as saw but year, this called which strength range including category

net footwear as new non-Payless growth benefited addition the private our also strong business. our from Wholesale sales of license well Klein, label in Anne as

private double-digit net our In Madden quarter, again, segment. Handbags increased our sales and wholesale were growth quarter the standout that consecutive division year-over-year sales performers. in fourth Steve accessories, the XX% Once of in label

We also the of Anne from business. the benefited addition Klein Handbag

In by also By up were Handbags sales growth X.X%, largest the retail. in store sandals in with XX% category, comparable increasing and sneakers retail, gains. strong e-commerce business. outstanding drove saw overall fashion performance our sales driven

second our quarter performance. with Overall, pleased we were very

in Madden bankruptcy As the of face mostly tariff momentum look retail the including we outperformer handbags, our we strong on clear number tough while in remain a positioning, because in Payless been and ahead, flagship headwinds, our of which confident a we Steve has a environment. the brand,

Danielle, more detail, the financials updates. to wanted to you over provide to in it turn two walk I I Before additional through

XX%. produce, on we accessories call, that tariff current on I quarter is and first on to List to. alluded the earnings other include you first the at was the handbags X products, spoke The just situation we that tariff which When certain

moving China. production the goods remained from level, we impact through of and in use majority levers. our China, vast of on concessions to of the the the we reminder, a that out believe the One, mitigated factories primarily price tariff As at negative two, XX% of Cambodia; had receiving two

increased In administration tariff List May, to XX%, the it where Trump on XX% the X remains today. from

of to net concessions share. a to factories third XX%, gone and $X.XX said, of in for the begun there since is way mitigation currently estimate We prices. of the additional pulling at tariff also price level China approximately is the from negative have no have entire lever, per selling the be XXXX raising back mitigate a impact impact. that earnings We will That which tariffs,

update is in not and have that China. terminate expectations, China joint was transparent agreed our we we now performing On been JV to earnings second our partner to with that venture The our have and respect recent relationship. to calls, our

JV. the new will that the shares company, strong JV in the and a down the we a our that a with We all to are do, a continue remains have Within to partner for but significant process of are one brand. believe week, discussions winding however, about along vision opportunity China in form location. for far closed We we

expect We to on a the we plans the update third partner and by call. our in have you disclose be time the to position new quarter earnings

Danielle, With our in financial to it detail. more turn to that, results review I'll over

Danielle McCoy

Thanks, Ed.

We second with performance. our are pleased quarter

net sales sales XX.X% million. $XXX.X compared net consolidated prior to Our of $XXX increased to million year

our Anne million, core addition growth of XX.X% by Wholesale recognizing Steve to growth Payless. the the sales in label footwear which led our strong and increased Madden quarter Klein net of increased private brand, not to despite business, sales the of $XXX.X

of from handbags sales to the In XX.X% the Klein. Wholesale increased and quarter. drivers wholesale growth label accessories, Madden $XX.X private addition also in the were handbags Steve Anne million. net accessories benefited

retail million. X.X% our $XX.X segment, In to sales increased net

company-operated the markets. stores, We X stores, ended quarter concessions sales X.X%. for quarter operated retail the with up XX over Stevemadden.com was in XX% same outlets XXX second a as store XX and in including as increased row. international well Our e-commerce

Turning to income. other

commission of income $X.X year. $X.X Cost income, First was the in million million to Our in last compared quarter, million $X.X expenses, licensing second year's compared $X.X royalty was while quarter last net million to

by prior compared in decreased increase This XX XX.X% compared to an mix, for was The sales a XX.X% in year wholesale an increase compared pressure due quarter. the gross primarily to in margin offset as in to to margin margin wholesale year. well was List on mix to and Consolidated prior partially impact accessories, XX.X% the to margin in by of tariff. apples-to-apples points driven year increase X by the basis gross last quarter as modest basis. sales Wholesale increased XX.X% primarily footwear, the gross wholesale driven the

company's to in as China retail to in of our markdowns American of North aggressive margin compared slow-moving venture as gross primarily XX.X% Retail inventory in inventory was connection joint liquidation liquidation relationship prior well the and the period, wind-down the due XX.X% year operations. the in with

net year. second XX.X% for or $XXX.X quarter Operating $XX XX.X% expenses increased totaled quarter sales. period Operating expenses XX% last million the the sales quarter $XX.X or of compared net net XX.X% same operating of of million sales $XXX.X operating income to to of million net income the of compared or for last sales or million year's of in to

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

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

balance the sheet. to Moving

strong. remains foundation financial Our

year, million and had X.X%. $XXX.X in no XXXX, compared the of $XXX.X prior increase and June securities an million cash million totaled XX, to debt. of As of we $XXX.X marketable Inventory

the and months last was the June turn our inventory in Our consolidated $X.X XX CapEx XX, for quarter ended was million. X.Xx,

we awards. net repurchased million, During settlement stock for which the shares acquired through quarter, million of approximately employee the X.X $XX includes share

September a have XX, the declared of Directors dividend of Board of the $XXX per to XX, of quarterly shareholders company's as business of to the we XXXX, on September million $X.XX nearly stockholders our The share. Last, payable cash XXXX, returned be and record Since share dividends. on of repurchases in form dividend XXXX. close will

Now turning our to guidance.

despite and an to share our $X.XX in tariff XXXX XX. of increase incremental on XX% as products to are from X estimated approximately sales from related effect We of per China, net the XX%, headwind May maintaining in guidance the List EPS

in full and net range diluted EPS year to of to For we the X% of XXXX, $X.XX growth $X.XX. sales expect continue to the X%

don't rate, year. and headwind the combining to guidance, to we $X.XX impact compared negative While when please Payless, the note, tax a to earnings tariff purposes, the prior specific is quarterly quarter for provide there third higher modeling related

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

Operator

of Instructions] comes line from [Operator Piper Erinn the from Murphy first Our Jaffray. question

Erinn Murphy

job A in tough couple Ed. Nice market. a of for questions you,

or it just into the heading you environment. First, kind channel, about back key maybe could how inventory comment wholesale of your you half? curious in maybe sandals American on just strength, of giving into really or reflect department by can on sneakers, Whether feel some accounts, seen stores? you if levels the the to a North I'm half you've speak style portfolio, And off-price maybe across back then perspective? whether merchants, just you your from spread its style broad of mass a just confidence the what's -- lot

EdRosenfeld

Sure. missed the a U.S. Yes, sales I was big were a think I the We retail of think environment in bit customers their had little and overall, first lot wholesale in that challenging. pretty half our disappointed the perhaps plans.

like the a think, numbers, the looks question in asked the channels better, the about value channels you the you little merchants, bit of I top look it mass if price off-pricers, a If overall performed line. terms clearly, at the different mean, I

in our increases, cases and particularly a businesses that even Madden Steve were strong in our the that's with brand, spring, we a significant generally were sell that customers overall particularly environment, But across not speaking, we performance really it challenging outperformer really, was their very -- saw because and why this strong. where different really into, we were pleased

continue -- look, In the we're from to world sandals right terms sandals. selling so style lot still and It's buy-now-wear-now be us. seeing a of obviously very a of now, perspective, what for a important we're

our into sandals. with course, think very be we wedges, also we and even Doing here and into Sneakers, will flatforms, very continue as important that back-to-school great important increasingly of our some fall. get flat to with be

and also we feel some on optimistic really And We've boots reads early had this booties. boots then about good year.

have feel about years. that than that's little a think time I a bit better few So this year of something we we in

Erinn Murphy

give hosting that that's of just that that any you're it, relates helpful. kind then kind of reads Nordstrom you of there there confidence? that it is seeing trends is Got those and the as to are Or currently? maybe seeing reads, these some sale -- you're anniversary early that at And

EdRosenfeld

excited from our Yes, the there. Nordstrom what sale, as sale, really Nordstrom But from as our we're specifically own anniversary own anniversary performance the stores. we see -- in really our are about well reads

company. think I as sale it best a had was that we've anniversary ever the

really pretty about us tells excited how in Blondo, item in Steve Madden, in fall. so big performance Vita, positioned what about we're tremendous Dolce very it a and had So also we're strong that into

Erinn Murphy

margin. gross my Got it. just just really second around retail then is And question the

on well of China, both on referenced, transition you in the winding in the think America. be long as this one in unpack announce the a you'll both profile margin new Can with North you China the guess, I a will inventory of drivers? some of slower particularly then I drag moving of kind JV, QX. as year? that JV, And just How the those

EdRosenfeld

Sure.

if wind-down and of the look of touch margin retail going be in behind impact half should that the just related much meaningful decline So forward. it China gross a QX, JV, pretty a the over at was that's us, we so not in to

proactive moving what just compared in bit heading very different was saw that really and QX. to a really we America, in the into The was year We clean about other slow-moving of and and inventory North getting QX prior the this little were through year. approach aggressive a piece

starting So year positions in that for QX. think retail in I QX improved us than and ago were a we're do cleaner going margin much into gross we

Operator

the of Yruma comes question Markets. line from next Capital KeyBanc Our from Edward

MattDegulis

on This for is Matt Ed.

made months fully on So any significant? and given a us sell-through of Klein, Maybe couple now from shorter or progress delivery, can that there? owning Anne you you're update margin design changes from any

EdRosenfeld

Yes.

there. think I seeing right in target we're with we're really Anne pleased We're on what Klein.

to delivery goals basis than margin. Certainly, got number our improved last the XXX more terms spring where all As maybe into basis XXX from the of would you from significantly. we could the principal one this of of was was points were seven my spring, head, in up we gross but to is off to -- we the as see there points, of fall it margin, top be and -- design gross processes one know, control

nice some And improvement seeing we're what pleased year-over-year and see drive so continue and we're that forward. there with to business to in margin gross expect fall,

MattDegulis

back the kind And bit number to to adding you're business the of wholesale Wholesale should in expect that correct? we in lapping third that half? accessories a wane growth? quarter, So accessories

EdRosenfeld

question Yes, to we the answer your the Anne follow-up footwear just on think wholesale begin is, Klein accessories to because I both Partially lapped slow accessories. of half. both -- to yes, in back should wholesale -- in wholesale and But that.

partially Just the of because difficult but balance also because business. the -- of of Klein, just the comparison it's Anne in

Operator

Our from line Anderson of B. Riley next the Susan question comes from FBR.

Luke Hatton

for strategy impacts, how opportunity is details I tariff you for This you're provide wondering without product prices raise rate pushback. any on Susan. lines to able sort different Luke think much channels? of between And the Hatton if more there price have how do about your the to vary you mitigating then was does and this customer

EdRosenfeld

And be in consumer we're over really if low mean, remains in now, time, looking to would at push early price to then, up XX% look We at handle that further. it's will that. we increases. the the I early place we're Yes, tariff -- single-digit Sure. Right the there. able the that stages think level

You I challenging to be asked channels, think the more there's It's more value own go part about of you the about the the probably little as in going department bit think, chain. and more room -- to in into the down price. stores, take stores different a you've look, our

label So the that mass do the private off-pricers or merchants. in we

Luke Hatton

in then a you decision bit a more -- JV? the on you as region? maybe current partner can China, qualities provide new then some back for Got it. And look for of some the little background And your to looking that on down you're wind China just sticking

EdRosenfeld

I the JV wasn't and Well, current all that company, Yes. it -- the that our partner, our don't good the think wasn't mentioned And think to our end, just in because about that respect fit. pretty I the the and remarks, prepared right open much, fact probably think, due performing expectations. like management that it's With we've I the partner as was Sure. JV been in our just we agree a with I respect we to very it and with and strategy distribution, had We a as were And other on on the aligned their were on in the marriage. remainder as concessions in to focused, right focus big highly place department terms One focused I not we think, to business where not fairness signed them them, in required areas. something pricing. they changed after highly of they aligned the that ultimately well in as is stores, we of were probably were have strategy. a that business distribution deal

somebody our e-com. really on in for next be is our with partner focused potential I we're think space -- expertise partner, the in we'll in with we're has that -- digital partner more looking the discussions now that the much who and an

Operator

question next comes line Our from Janine the Jefferies. of from Stichter

Janine Stichter

retail little of some that for looking partners to now private some seeing the there, share business, you're talk about recapture other just ask the to wanted you growth market that label be your grabs I making that that's with a the liquidation. some notwithstanding Payless loss footwear nice up with you're of of bit can Payless, progress about may

EdRosenfeld

seeing the with really taken we're us. has off merchants, for that strong Yes, really mass growth channel

to in even to Payless. in I pointed I is remarks, we with tell is label think It's the footwear going is strong seeing channel really how customers to headwind were you from the we've that and that and related there, attributable actually the some some that Payless, rather. of capture fact, looking in or up share, away, much as but recapture growth market to private year-over-year, disaggregate to of in share earlier very some hard of of Payless the of and say probably that that growth to to market exactly we're can those all closure out

I -- last in with we we So away, did think million were going $XX even with Payless up still and year we year-over-year. something that like QX

Janine Stichter

can added there think point you've And options, a e-commerce. that? alternative Okay, have on going anything lot got there's I great. driving a still know of you to you things seeing there. then Is growth payment nice upgrade, site just you some really the to I on, maybe really is improvements any year shipping, And so like ago give profitability now? it's on that? e-com comments behind what if is you still you're then looks or you've And think now, in can the margin that seeing profile so before? do what you for a I'm called out the

EdRosenfeld

think has to the it's the I We've replatforming lot really Shopify that platform. very things nice consumers. and of Yes, line. free new is a has improvement lot seen different conversion for a that going driving X-day in of significant I definitely I significant. Plus think attributable think that mobile been think Afterpay are and with very the has do to us. to our very be been a I resonating shipping top

with our efforts -- respect really influencers up have to nice been that are we a success demand. have driving think paid seeing with there. And I social, also what of really lot and do really ramped we're

pieces of with business So product digital having there's the strong of addition a very are that's consumer. to different obviously the marketing that drive lot helping to resonated in

In we terms of see the continue improvement profitability profile, there. do to

in e-commerce time. a there's the improvement, We surpass that of year terms also bricks-and-mortar room of margin think profit but first still lot this for for will

Operator

question Susquehanna. Sam from of the comes Poser next line Our from

SamPoser

could? QX -- little just direction I got give there statement, give Danielle, on that you just color on a you purposes. a for us Can more follow-up your modeling us if

EdRosenfeld

take I'll that Okay. one.

half. simply the was if first EPS half providing help was performance the to you what the I And guidance the EPS our making specifically, year, respect implies really understand year, if that's the that the and the full look simply the a point the driver in color, the tax you half. back you in prior you at down think and down to in should headwind higher prior for obviously at to guidance with down to and rate, was headwind I and $X.XX $X.XX Payless, the from why in our that in And QX. was the tariff context essentially of Danielle when Danielle -- compared the the EPS think be we're look QX, year, we compare the starting, There's hole. back

SamPoser

expect or then do a to back $X.XX mean, it $X.XX be fight and down will... But it's bit. I you I down

EdRosenfeld

that we'll claw back. Yes, some of

SamPoser

mean, is on in I to -- most what gross it ago. based third quarter the be like planning that said -- that is margin few And you of you're up sounds a minutes

line then expense in up So fixed going it's the really of against? like costs

EdRosenfeld

Well, gross to retail, can I up, be we're and see a where we the planning gross going to addressed what accessories, but in mind, related ago continue margin we declines, margin do -- keep minute that's primarily tariff. to you're wholesale think gross in was in

and So basis pressure -- accessories, got points from me, in QX, you've accessories. XXX to gross of tariff a wholesale the QX consolidated number, just margin excuse in that's wholesale not XXX

SamPoser

And third more the quarter that would be fourth increase because more your offset theoretically. impactful would of in DTC quarter in that, the business

EdRosenfeld

if basis, consolidated Yes. a yes, tariff the the is is on of impact QX. The you're in largest tariff, it at looking -- most

SamPoser

And selling, see that then that would doing, next way improvement if the to goods, -- and you in would you work, to want the in so sell. I -- work you you so mean, lapping this negotiating assuming as the is the forth. prices margins the accessories, all stuff do once move on and you expect think into about lap year, we you're

EdRosenfeld

But see until QX pressure this. we you'll in QX anniversary still and

SamPoser

would you when swing? assume. then to that's But QX when expect see it you'd I to QX, and get

EdRosenfeld

the be will goal. That

SamPoser

the about little being you're Okay. And Blondo -- and that's and during -- mentioned we reads opportunity well on, how talk seeing it where could very boots. business -- planned? you did And there? at good You a and then the anniversary bit see early so the on

about talk that you this year? a can driver So as

EdRosenfeld

a now strong I really, Yes, particular, us Blondo years, last season, Sure. year, in heading key is is very and into very of has growth sale a sort their which couple they which a for increase was over been for for Blondo, And event for big them. we're and very Nordstrom obviously last also fall. event had fall really and -- think of course, the over a of the a anniversary nice successful strong kickoff event, vehicle

about So that. we feel good

the year. prior be I think be not growth up seen so a still business increase. years, but we're we've should of in to business this rate same much as nicely that a now, It's very should going nice see bigger

Operator

Capital. next comes of Our from line question the Laura Loop from Champine

Laura Champine

we that? happen? competition, do contingency tariffs, see relative scenario, worst-case X, done and have on of tariffs And should If how positioned into you planning List do you everything would what think the your a you that for kind we get to be

EdRosenfeld

same I Yes. mitigating we see the be on to Sure. to we the X. that with respect we've tariffs pull If ones List footwear, as were pulled would think levers that the would

to be we be on X, customers. would production number to prices number price in wholesale number X, one; to moving selling factories the remain China, concessions would So China; looking and and for we of the would out raise looking that our consumer goods be we from our

little I relative be to percentage footwear. because able that to X of might think about lever more you might the be we little as X, think leverage I X basis pull shoes think to in and bit pull, a but bit perhaps might a a have to move be as much lever not on the easier power quickly, difficult handbags, it if levers and

We're of in Mexico of of started making fall. And already. got good Madden branded a a moving for Steve China, have products do Madden smaller terms number runs In other to production that Steve out -- in of countries. the we we've chunk products

but positioned production we that would in such to number quickly. way, We stepped come of things prepared countries lot in a of a gas be a we've ourselves other pass, if that sort have the not did of move and moved preemptively pretty on major to

positioned be the relative in is we'd we'd as to same how as mean, boat. our look, far in everybody how our I As I'm be space -- sorry, as competitors, far

some cases, be I we'd positioned. better in think,

of situation really space. us peers, we've think think up well. Mexico better about performing got leverage of our us our attractively very in and our I fortunately, and we're better any a just We're to else give instance, and anybody in And that than also relative performing for would some position peers. set I some than

Operator

[Operator of Vasilescu Macquarie. Laurent from Instructions] Our line next question comes the from

Laurent Vasilescu

question. follow-up parsing to tariffs for from the Sam's $X.XX you on for out the and Thank tax wanted I headwind rate Payless quarter. higher third the

think would that I quarter, digits is really model third digits, for assume for correctly? that a quarter. still it nickel to Or quarter Payless us the last on just EPS that was noted be right high-single down way we the the Is And question, following headwind more down should up think to Sam's about double third year-over-year? like it?

EdRosenfeld

$X.XX you've that can QX to as at Sure. QX I got be think I down real QX get think and still about Yes, and Look, Payless to look guidance, in to XX% similar is pretty for way you to think the to the right it. numbers, half, rough back there. our in XX%

Laurent Vasilescu

I gross last we to call, And modest margin should it gross regards Okay. then with that expansion. margin, think see noted was

with incremental flat we should think gross obviously, year-over-year? margin about still there we incremental tariffs, tariffs, are more like Now -- think the should those

EdRosenfeld

could the still talking XX, think margin gross to most. I'm modest bps get XX I probably at we Yes, expansion, that very XX,

Laurent Vasilescu

how would on the question. last the color Any be appreciated. performed by greatly months, And comps Okay.

EdRosenfeld

month, weakest April were was high June and May that Yes, about up flat. very was Sure. strong, the roughly singles,

Operator

from comes Advisory. question of Dana Telsey the from next Our line Telsey

Dana Telsey

the thinking boots -- nice How sneakers this how of you are you you planning environment. you dad the in are the thinking sneakers? back the of the sneakers? year? of performance how on and And the half performance are fashion for What did with about see Congratulations

EdRosenfeld

to be continues sneakers for us. Yes, important very

that's a business the wholesale trend The most business, important women's even talking now XX% or of it dad sneakers Madden probably continues to Steve within continue be to our You're sneakers. about more perform. so

early very and given to mentioned for last optimistic we're I of us. so few year. reads, that booties, can we're up business as but early, time and expecting for than boots what that us for And to years more earlier, the think we've important this be seen, last this would year. to we're With respect the it's the be for continue we -- And been now optimistic at years say we've I the few

Dana Telsey

And you line, see quarter? outlets in when then what's have the retail I think what And you done better tourism? a full little your about performance, do trend think than this

EdRosenfeld

outperformed drag. Yes, full our tourism a and continues price be stores, outlets, again, to

we domestic when credit and credit than the see down cards the considerably the we So performing look data, at weaker card to cards. international continue much

Dana Telsey

And then last things. two quick

On China label that business? And -- Payless new do merchant the you the do this base, customer mass offsetting strength. key you'll private Payless have you the Is Is want partner? the a base? partner the to think customer what And when be? China

EdRosenfeld

very pleased we The lost that, Yes. were Sure. with mass private what to offset that. Payless, so in merchant customer we growth QX, label did in

Dana Telsey

right? one second China, was about The

EdRosenfeld

Yes.

we're expect really think our particularly, really signed to -- to where have next And distribution and is going I to something the aligned can department brand, you tell hope big a a I as And have of be the when model. we somebody store pushing that, come opposed the that again, and -- I being be that's who is it call. concession vision strategy partner we that strategy. for a can on aligned part China We digital on about on new shares key, to going the talk

Operator

Our Wedbush. next from of question Svezia line the comes Chris from

ChrisSvezia

the Madden perform the quarter? did second brand, footwear question, label I guess, that how versus private just in first separating Steve

EdRosenfeld

footwear But had label headwind up was label. again, private more Well, Branded branded the from private was double Payless. up footwear single digits. than digits, label, private

ChrisSvezia

Women's that of some on out when and you Okay. expect remind in your for call brand, against? don't encouraging business. Steve what regard up row, year? continue, your digits, women's business, sustainability you the And know your half third just of Madden and that of quarter into commentary, with what's you the more some to the sandal I -- comments based Madden are boots, just the athletic about us And but was it the to about Steve thoughts back up, up a we Just go as double

EdRosenfeld

Well, -- in at but Yes. Madden we were from well, as up nice we I were against up. don't Steve year numbers QX particularly up the we're double remember I Women's QX. some I up the digits. moment, believe definitely double know prior was

that half. have the back in assumed business bit a We the moderates little

far and think relatively got environment be outpacing see we does that's now. prudent, a so and retail And momentum the their slowing that very But we've that the again, open-to-buys conservative that I think, position. said, inventory business overall and continue down market, given are right don't tough. approach overall I customers, we've strong taking been their in to with the

ChrisSvezia

Are seeing you [indiscernible]?

EdRosenfeld

[indiscernible]

ChrisSvezia

point, are Ed, the your you it seeing in quickly, just terms you seeing in I think brand. that I turned know anything anticipation, moderates for inventory just the slowing? of that but it pretty is Or comparison, book? To anything, -- QX, order the

EdRosenfeld

have keep the that the we goods we way Well, off getting big in was in what increase But those how in do really but order started and to mind, was a we order we spring, file, got increase reorders nice forward. the file happened with it going increase. an in the -- turning was

better was order than more much we book. So terms of in -- we it ended started

we So fall, ended where with but increase degree the to an the spring. we're starting not in in

ChrisSvezia

footwear very curious, growing got it's comp, into to the half year? tougher but of the as Klein, the go the the margin as half Got how to see for on I you're of Anne it, on margin the you've do okay. owning I Understood. the profile know And going the back about you're gross we just wholesale think footwear label then private I'm back just be we even gross wholesale a business, -- I segment strong, guess, seems margin,

EdRosenfeld

that to Well, more flattish now. I be expect

had in and it the margin. we a the our things One In up buying year, of did in the a first away, had last the gross moved we other the impact into as -- which recall, sales the half as have agency that showed half, gross so or did line, margin benefit model, was customer. going where income been back you was low Payless not

forward. going don't you So that have benefit

is it to way flat, approximately the back about right that think half. the think I So

ChrisSvezia

a And on between keys Okay, got up the retail breakout physical just -- X%. much How then digital me, for stores. the over just it. what's and little the comp, finally,

EdRosenfeld

were, coming e-com. the is stores down They time. all were low-singles again, physical about, So growth down. from And this

Operator

the next CLK Associates. line Steve Marotta from question comes from Our of

Steve Marotta

and expectations sales given entire the for quarter second Danielle, sales the a the tempered not about Is year, little why half. maintaining you've beat year. be? the your given and sales Ed there any guidance that sales second you talk the expectations increase reason Can bit for quarter for back

EdRosenfeld

Steve. Yes,

the that frankly, our not think, significant was beat relative forecast. internal to has I --

different I think modeling was a numbers. case internal slightly that The from of our Street versus

SteveMarotta

be That's helpful. inventory reason the balance will growth quarter do the is Is And any either my year? of believe there for to with higher-than-expected growth? last growth sales inventory question to that

Ed Rosenfeld

I don't No, think so.

I think be that should relatively in line. it

Operator

[Operator And no would I this to at for comments. back further Ed Instructions] like it turn there are time. any to Rosenfeld, further questions

Ed Rosenfeld

rest the forward joining to much us to look for your talking day. call. a you and of great third very we Enjoy the Great. summer, today. Have quarter on Well, thanks

Operator

you your wonderful Ladies a conference. have and Thank concludes and today's participation for day. gentlemen, this

You may now disconnect.

Steven Madden (SHOO) 1 Aug 192019 Q2 Earnings call transcript