SHOO - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen and welcome to the Steve Madden Limited Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [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.

Danielle McCoy

morning, good and Phyllis everyone. Thanks, joining Thank call quarter earnings third webcast. you for and XXXX our

known discussions Before may like statements other on earnings begin, expectations our materially its expected response statements we factors and operating the business and actual differ we relate dynamic I'd company's securities aspects or as expectations, from may such, also our that are federal COVID-XX current Such the pandemic involving and involving future. results, results. within uncertain make current of may not call, predictions involve well such during the impact to events. about control. the the performance certain Generally, unknown to regarding our plans projections risks, ongoing on or And forward-looking operations statements laws as these results include as the these and statements. in based company's uncertainties and to defined statements and our remind company's these you revenues, anticipated Because and as assumptions to they including

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

over Rosenfeld, Chairman and and Financial that, Ed Mazouzi, Chief today With call the Ed. Officer. Zine call Officer Chief are Joining to Executive Ed? the turn I'll

Edward Rosenfeld

thank to earnings joining we EPS revenue In disciplined us Good its Danielle. pre-pandemic our highest Steve and and third increasing demonstrate sales history, the to morning, third that everyone. And X% XXXX company's Thanks, with increasing XX% of Madden's the you results. quarterly third in quarter, strategic delivered key quarter for XXXX, the execution review priorities. quarter compared results diluted

Our on with number I our product one ahead that priority it performance of and And as to our trend-right competition. team's front. create happier be not is market always to get could

relied particularly industry combines our teams We speed proven our product which Madden assortments take strategy increased investment marketing. have share, on model, our leading are and competition react winning Steve, to and and in outperform to the brand. capability enabling our with and deliver trend-right supporting us in market design led also great our that to this talented market test flagship We're Steve consumer the product by with

avatars campaign business morph ads immersive includes shoe in elements of our and we business, Normani, reflecting our iconic brand XXs, next content consumers Jordan into empowered called marketing to Madden digital. attitude, that head outstanding back of Sweeney, from Madden with campaign and avatars fueling creative, launched enable which and our In the marketing favorites same harkens progress Skye filters years, the to that to Nessa campaign authentic the feature consumers, features bold, Justine The reality and augmented media in product the scale Alexander, XD of like to digital try led on rebellious addition is on e-commerce This embody our direct-to-consumer artist. an favorite with turn our that Sydney women driving is and but our initiative, to artists brand. spirit connections big our their and fun the the combination Barrett, girl last and avatars by modern enhanced efforts the Verse, month deeper also of drive accelerating social Instagram largest continuing strategic Steve

XX% Our Retail both including the segment quarter and in revenue channels. compared grew digital in performance outstanding XXXX to brick-and-mortar

contribution store brick-and-mortar compared Our expenses gross meaningfully. e-commerce increased revenue the to combined And of stores. and to the $XX.X business the due to outstanding our The promotional included million brick-and-mortar XXXX. well in in versus $X.X retail with Global low EBIT XX% from gain sales segment performance, strong XXXX, momentum, XXX% of continued compared revenue increasing in XXXX. of XX% third resulted U.S. controlled margin with XX% million its as as store exceptional versus quarter a XXXX our accelerated comp levels comp in activity business quarter,

handbag apparel strategic of of on in domestic Steve as that heights business focused branded business. dividends. handbags, handbags, continues we investment are non-footwear business Another markets. our of and our And initiatives in here expand both new in emerging to channels as multi-year well Madden our is In outside With direct-to-consumer international year pay reaching wholesale our our footwear. category both and our largest business this to

third business approximately While to due increase revenue Steve full-year, track compared a The channels. of the remains for to delays. as direct-to-consumer XXXX was growth in more bag XX% supply on quarter Madden to to Madden to out shipments than down XXX% QX wholesale that chain including handbag Steve XXXX result moved

shirt are across to in Steve performance are vegan sell-through Madden our with driven where also apparel classifications. by BB and we that Dakota key gain wholesale accounts business, all We traction seeing leather strong dresses, continue jackets, success

QX, exceptional progress channels. grow our the share move that particularly we own driver. our year, acquired operated in wholesale the make and in priority we our we to to business, as our to business to in that remaining And Revenue Europe key to initiative. significant growth international increased that on remains not digital continue did venture. SM outs XX.X% XX% have this European already compared the Earlier also joint is we leading directly despite region, Another business international for continue quarter, XXXX shipment momentum of

category capitalize in on, we to the increased channel digits This the women's, our strong distribution QX, heat expansion on brand the wholesale including But and the our touched product in Finally, we increase the customers to Due strengthening U.S. U.S. business a core on assortment is market saw that moved right brand product in to remained footwear third quarter, I've XXXX, to footwear up even brand. wholesale with improvement QX. of seek to overall business trend reacted shipments out remain our focused our single our business. opportunities orders. flagship XXXX footwear XX% low wholesale as Steve performance sell-through down as XX% and U.S. that Madden was revenue revenue to in demonstrating Steve Madden our wholesale

in ahead versus footwear Looking the to quarter, U.S. business strong deliver fourth overall. XXXX the are growth wholesale we poised to

of as Planet Steve Howard business Madden. Cool group its new at new this, with employee also people do in embrace the for launch all well create months Madden opportunity we we of the change our adaptive University responsibility kids resource the communities. As last and for by of we in as to three Highlights our and the partnership to the our included continue new reimagine [indiscernible] Steve for launch line our a curriculum the to establishment positive collections have the of retail school

laid will the more broadly foundation quarter with In to and the and summary, also groundwork growth and our Steve seek our third the in us positive our year as enable on to making to of end profitable are with initiatives I'm continue the by that impacts performance the drive going pleased strategic strategy forward. to Madden very we progress the the sustainable We going key establish charitable enhance giving organize to we maximize forward.

Now, review our in to quarter it more our fiscal over detail XXXX. guidance turn I'll provide financial to third results updated for and Zine

Zine Mazouzi

morning, good everyone. Thanks, Ed. And

$XXX.X XX.X% XXXX, consolidated in versus increase, the million, to was Our third X.X% compared XXXX. increase a quarter a and revenue

Europe move the to outs. increase from in the women's from XX.X% prior compared Our million, to XXXX. XX% to XXXX. fourth million, compared XXXX. Madden U.S., Vita included was low $XXX absence into the not X.X% and to increases supply standout XX.X%, significant by moved and XXXX, revenue for from X.X% Klein XXXX XXXX, was and had due impact out Spade XXXX, QX in revenue Steve of delays. up due Kate decline compared to accessories quarter delays. We and supply increase declines the In by were Blondo, a strong Johnson those of the chain strong Betsey BB partially XXXX, a and $XXX.X shipments wholesale impact if gains Dolce apparel to Wholesale performance XXXX. down of million, wholesale by result the the increased X.X% results business have U.S., chain to from had Wholesale increase would offset His revenue footwear single slower license in Outside in as by the a last recovery delays, for in primarily in we in softness When Dakota label. driven pandemic the portion the year, was supply XX.X% a private the Anne quarter apparel a in a $XX.X Canada, comparing to versus XXXX, and well down in offset XXXX. segment footwear of and the the chain was estimate a year, also these to revenue only that was to was to offset an decline as owned as up digits

retail to was for Brick-and-mortar compared and was growth XXXX. XX.X% revenue and wholesale In of XXX segment, XX both Ed six comp compared show revenue apparel growth markets. e-commerce compared XXXX. increase, domestic websites, store compared XXXX concessions increased a XX% international to segments and accessories increase compared same XX% increased double-digit E-com company versus stores, driver stores as well fourth was accounted quarter to $XXX.X E-commerce period. footwear to to in of XXXX, mentioned, compared versus to expect outlets We company XX% XX.X% our strong sales wholesale XXX% to E-commerce and total a with compared XXXX. strong million, XXX.X% to our XXXX, and ended in We sales primary XXXX. including also global direct-to-consumer XX in operated quarter. Retail the the operated grew retail the in as as quarter XX% the and the XXXX performance

segments. and First licensing Cost our to Turning

the year, Our in licensing $X.X last million XXXX. royalty and was quarter $X.X in compared $X.X to million income million

gross a or year, partially investment gross GST increase million by XXXX. selling e-commerce offset $X margin XXXX. by and to more margin compared result activity, the million digital XXXX XXXX. of XXXX. increased freight and last from business. to basis XXXX million in and modest or include XX.X% increase headwinds reduction both income the in was versus was versus Cost XXXX. $XX.X quarter in gross The in XX.X% feel points Consolidated of driven and million and million prior was $X.X rates. for improvement offset and in Retail from in in XX.X% quarter, XXXX. The to continued non-renewal $X.X $XXX.X in year driven or our were year of year the XX% commission in last up XX.X% XXX increased $XX.X the decline First in and brick-and-mortar and last is was the million of the Wholesale income from primarily million, compared our markdowns. promotional $XX.X year, XX.X% XXXX to $XXX.X of lower to freight compared XX.X% margin to up performance was Operating last channels, year revenue growth XX.X% margin million XX.X% XXXX, of in $XX.X million an in than the revenue of The increase average by rates marketing and expenses higher XX.X% compared XX.X% to which last revenue prices Operating XX.X% the was quarter, compared

rate and Our effective compared XX.X% for in XXXX. quarter tax XX.X% to XXXX in the was XX.X%

million $XX.X or $X.XX attributable diluted diluted income XXXX $X.XX Steven quarter share million, in Limited Madden per up share or million $X.XX $XX.X XXXX. from per and Finally, per in diluted net share or was to $XX for the

financial Moving strong. foundation very the our remains sheet, balance to

XX the XX.X% end hand end and between On approximately our of of to inventory XXX% quarter-end and at inventory approximately $XXX.X down investments short-term up had supply and September that due of year million to the the compared compared cash inventory As up XXXX, compared million XXXX. 'XX last of In-Transit third at XXXX. or was XX% Note no we to debt. up cash, Inventory quarter global chain of compared equivalents $XXX.X to to was QX disruption the represented XX% XX.X% totaled XX% of at XXXX.

Our CapEx in the quarter was $X.X million.

an of shares includes stock During repurchase net we the Board of acquired Yesterday, also Directors December repurchase approved company's settlement XX, as share. $XX.X Directors the of on will authorization the quarterly Board in which to approved quarter, XXXX or of approximately the a million. record $XXX business The $X.XX to payable dividend of awards. employee the on XXX,XXX close to stockholders be cash share per million, The shares December company's dividend XXXX. XX, increase of of

outlook, the to supply significant disruption while global Turning chain a remains our headwinds.

questions. operator now in would diluted and EPS Our performance like raise be to We in our And in I call to to third to to us for the increase the of expect gives confidence our to seen quarter. XXXX range now turn revenue momentum we've expect XX% the to $X.XX. guidance. XX% fiscal compared we the the to Phyllis? XXXX And $X.XX business over

Operator

[Operator Instructions].

question proceed with BTIG. Lyon question. from first of Your line Please the with your comes Camilo

Camilo Lyon

Thank with to quarter. QX very is guidance. everyone. job The morning, strong I out Good a guide start you. the on Great guidance. the want

maybe I versus think are sales the think you X% QX, into XX% slipped is compared that's unpack parse implied and wholesale that up Again, raised reorders, to above QX. XX. much in QX quarter how $X.XX fourth it or what's implied the between so of to by And DTC? shipments acceleration later current about estimates. street Can up you that EPS I driving be about splits the from out

Edward Rosenfeld

the morning, question. good for Sure, well, Camilo. Thanks

this. to It's in So seeing brand. in Steve heat strength the the raise like guidance gives we're what Madden us the the confidence brand really and terms the and momentum that of flagship

we'll at versus the look have out Steve our was momentum direct-to-consumer incredible in compared even XX% you that ago, if and business internal both where in raised XX% two areas also are Women So up QX. then earlier XX% and where which have anticipate months And we continues see wholesale forecasts channels. our called in faster digital U.S. QX, growth that to were we footwear big just brick-and-mortar Madden business, three we we to to

you're In XX%, at forecasting growing terms X% clip, XXXX very our acceleration even about the it's going but grow you that XX% to wholesale, been down about QX, QX, be in than up from we've it's to mid-teens in our We function to XXs was to year, about wholesale QX that throughs business versus these QX low up business, up. been the the of that's rapid think the said you acceleration in but was to shipping a outpacing which were the talking how we're up customers. our incredible we've and really that in to DTC. QX to that's really our XX and And of if just faster throughs levels you're a wholesale, all our of compared at dramatically to wholesale sell to seeing catch wholesale had, stock now customers sell XX, catching

outs, we to expect QX QX. move is moved of the to there excuse move wholesale about we estimate of the some You million the anticipate $XX from that QX, for we shipments outs from move -- out QX me, impact about asked that outs, benefit

built However, about our into out end QX we've forecasts into million assumption QX. the $XX an also falling of of of

So relatively million. the about modest is net impact only $XX there

Camilo Lyon

color. great that. Thank That's you for

perspective XXXX questioning, conversation is strategy, with partners? really follow-up the be question digital you've digital say sales just you you how of versus the years you that'd kind As the half of update and helpful. where for strategy, made second kind profitability us to question today where progress on And first line could on a your ago very a broader does from three an my with then of your a are this of impact if that that wholesale give more your of were

Edward Rosenfeld

open the as into of wholesale we're for the at obviously throughs so 'XX. obviously that part for commitments we with nice buy to retail, yes, part customers go that us having the our first Sure, the 'XX, of first seeing, sell positions we're success well

I out today. guidance we're not putting think 'XX

positioned not an share feel expect been in first of channel sell and going we how we're do wholesale that. through. 'XX. we've And we're the terms part in good I'm outperformer But put to about that around So to taking numbers for certainly, of

connected terms we results. invested over we top really that has then marketing, for brands our company in In of been talent, And has e-commerce enhancements. years. as have have that ongoing respect a yielded strong have all we business, we in priority and powerful to invested specifically digital, our of and And to the the we product. have have some few outstanding know, of really our you last in with operated digital and And owned invested that combination site

about a $XX think million making asked And in we XXXX, ago we little it's in doing our were operated margin. over where a revenue owned business. you So I were years and was million, operating single-digit about $XX three e-commerce it

there contribution a owned $XXX profit are than with was e-commerce later and three to years In XX% going $X the in contribution. we operated So XXXX, million approach margin million. less operating revenue

So early don't feel to I because improves business. our we our going over change it that opportunities three that stages of period, still digital also that's say it have forward a year like of journey. think we really really in that think we're growth I meaningfully overstating the this And complexion it's that the in fundamental

Camilo Lyon

Good That's with year. fantastic color. luck the the close Thank of you.

Edward Rosenfeld

Thank you.

Operator

Please question from your Murphy line next with the comes Erinn proceed of Piper Sandler. Your with question.

Erinn Murphy

how opportunities then that you a campaign. you far little the the just about versus marketing Ed, customer is more share within morning, you. thus it response hoping spoke converting conversation. thank the on Madden your is been handbag bit to? and Great, footwear What new following up maybe could Good I was

Edward Rosenfeld

Erinn. Yes, thanks asking for about that,

also response. and really the like now it which about And just step on we feel fun, about had product in online. brand up into we've and that done but viral really been the and marketing. fantastic we we're sales seeing the exciting Steve in felt has campaign stores. like throw is And but Madden, really, feel here, interest excited and heat and traffic on had assortment what brand yes, response engagement, the this big search gas So digital really to we've with that increase we strong TikTok, great some great, moments given the the some driving social that the online been for it's has We new time in overall the brand we're

response. So customer really about just the excited

And so you asked about right? that campaign footwear versus the to with respect handbags was

Erinn Murphy

just that Yes, against because seeing how categories? come it's customer just converting campaign curious two that I'm you're across the convert or how

Edward Rosenfeld

Yes, was I was guess the focused. more footwear campaign more certainly

is So we really lean would direct-to-consumer that much the handbag overall, that about channels, in what in directly fact, growth particularly excited explosive. momentum campaign, shoes. then direct-to-consumer from that more seeing in we're coming And and about our handbags if sales towards channels. in you're pretty talking certainly it's shoes outpacing our in But are think we're

Erinn Murphy

second chain. and supply Great. then it question Got your is around my

been you to the and into Spring of resort production now with holiday step to thanks. have biggest kind lead nimble then even and deliveries, Brazil, seeing you early you Mexico, take time where production about all with think moving an very give of for if guys had kind and us air right at You a can what are have concentrations overview are of you and your back just

Edward Rosenfeld

surprise, is has chain been as big headache it supply no for a the look been it has for else. yes, us everybody Sure,

did Madden Asia we production Brazil half those move their or we're the Mexico outside As out, Fall. did that, off think have close has that. without of having for China inline to pleased think we it of been you Steve we outside to for And very to and point Women's that countries but certainly done not better challenges, we we're that's that of

of If We we're spread largest a would majority company countries. country then of second a in origin. number you lot of China course, And our make with out look handbags overall there. of still at be the across Cambodia other we're

up That's have had and primarily having about A of our was, yes our more in year direct-to-consumer via to probably were is year the air, ago that year-to-date, retail coming to that to utilize goods XX% right? XX% terms think our I we of do air In around it this Zine, we're segment for air, freight. was business.

Zine Mazouzi

year was That's that. this XX% year before and about it correct, XX% last year, XX% the

Edward Rosenfeld

have And expensive we more been air. course, up so utilize of Yes, rates because are that's air significantly. that freight

Erinn Murphy

so Great, thank much. you

Operator

with Your your Citi. next question with comes question. Please from the line of Lejuez proceed Paul

Kelly Crago

could Crago to channel, question. to is of I just taking time, retail I around strength, overall on the something and thanks your business the conversation single-digit think EBIT over you want on reached only believe penetration given in channel, about our retail at Paul, Hi, longer-term, the you retail margins where where a think shake maybe and just recent the high could follow-up best. out talked this margin I Kelly for E-com the just for business past, grow the that

curious where think So go Thanks. just you could longer-term? that

Edward Rosenfeld

that we're a really, question, That's it about something what thanks year that's pre-pandemic, about. that's And shift. if the versus like look the you really looks business Yes, significant this a excited Kelly. really at for

segment over profit basis total a more points, be dramatically. quarter is think back up I XXX to contribution about was business. it'll the up XXXX, Retail So And, our this about be it's importantly, of sales. And XX% going of in our the year,

So in whereas profits. back about only it was of our XXXX, a X% year, be of this our profits quarter contributing about it'll

margins bit the potentially year, EBIT track even of we're better mid-teens, even terms which or there, than in that, excited so to on about. this we're little do very And a

Kelly Crago

as drag a And about then future? line be to gross the beyond dig when Thanks. expect in to margin Would there Could was you lead item, some need then pressure quarter? takes how trajectory you XXXX, we that that on and just much normalization could you that the just a color to or I little expect think the talk think in XXXX, do the there, gross into about the it. puts any XQ? margin in fourth free you about bit. of Got And

EdwardRosenfeld

and the take Zine address 'XX. I'll let Yes, freight, then

Zine Mazouzi

Okay, question. so thanks the for

XX was roughly. the year So points. basis brings be somewhere on estimating the for for the point points, which points was GSP we're drag about the basis XXX about XXX freight XXX that basis around about QX, freight QX, to margin. And And the will basis

EdwardRosenfeld

in but providing next low color so can puts you very guidance again, yes, year, has the levels industry of it's yet, on -- I for see us not overall. been terms for So promotional as of give the takes. some we activity and there been Obviously, what this year, and

So we're have at the certainly next maintain we'll going going But to hard competitive what discipline are and like that that industry to see year. work very forward. there play dynamics overall looks to for

potential So of point pressure.

factory FOB seen also on labor and as based on pressure increases are well We materials. as price increases, price

of going a into next headwind a So year. that's bit

other outlined, into significant the as of been selling freight because and to somerelief our a certainly going that's half we hopeful then renewed, on pressure. However, there to that is that are go the combat we're raising headwind prices also side, is we 'XX, the Zine also that, and we get also hopeful back GSP as are of

Kelly Crago

you. Thank it. Got

Zine Mazouzi

Thanks.

Operator

of Your question. next proceed with with Securities. question Tom comes from Nikic your the line Please Wedbush

Tom Nikic

down versus second question. everyone. XX%. I something year think morning, I for looking this first were like taking kind the still in half And the guess of half, good I in of Thanks segment, your wholesale at revenues versus half. And first my your 'XX Hi, your

you to about reason your pre-COVID kind trying anything the revenues first to to that how pre-COVID, about lower I'm like mean, we levels? XXXX, look spring like, would like half like first half back think of I do get we kind than of to some season? they think Is your the think at why were just structurally of be As there

Zine Mazouzi

we back we're in guidance. compared specific if opportunity I no, anything don't going this Well, get obviously, improvement Absent, in putting no, what recall, But didn't in structural year. some we that nice to think we this 'XX. to get I QX area which that did to talked aside one-time 'XX private wholesale, back spring going provide you year. a And have to there earlier of not us we 'XX. that 'XX, the would businesses, to like anniversary target is had for think ongoing in that But prevent we to think about an program do in back to of we the we're certainly label

Tom Nikic

want to touch Understood. on Europe. Got it. also I And then

is anything that. term like Europe come you $XX that if think to to B, know, we this sales, better should been than said like that? think X% on think going you have I better like Europe Is somewhere don't do in put in how can you I Europe which A, Europe Europe trending million longer you of bullish about And year, can this I year, than then And that million. Like targeting out think year. of earlier would you've were meaningful talk this revenue or going sales? be pretty it XX% Yes. $XX be in Like,

would on Just Europe, great. picture bigger thoughts be any Thanks.

EdwardRosenfeld

Yes, to momentum really have so continue in strong Europe. we

and the So the that to joint business up. SM Europe business bought $XX year, referring where was the remaining earlier we the out to continued million -- for trend you're has this that we interest venture

$XX year, it'll of over ahead it where So north this XX% of do was million actually puts in it which XXXX.

there. growth strong very So

of If to today. multiples growth like journey early the at very continue year. we you this where are innings close of our and in And what we're look feel terms the to we're what EMEA million of the is, that region in to it's opportunity $XXX overall, in region going we be

Tom Nikic

luck much best Thanks of holiday very Thanks. season. Ed. and this

EdwardRosenfeld

Tom. Thanks,

Operator

question next question. line from Stichter Janine your of comes Your proceed the with Jefferies. Please with

Janine Stichter

a had a bit shoes hoping you've could product the you dress was Curious, you the morning, a category. And I talk know felt you trends all. little the about saw what start good Hi, you're what And head category. if I competition in started bit category. by that then in feel and at through seeing to there. initial you. Thank catch like boost up rebound and has of

Zine Mazouzi

shoes us. for to continues be an outstanding dress category so Yes,

it but some some of get our not with out category, there success a within seeing We of product the products And our that really performance has category. have all. at range more seen competitors slowed down we're in

very closed our dress, channels it's fantastic particularly up great us, boots, And opened then are western things heights, as doing in performing and direct-to-consumer performing category So for that of a Chelsea been us, happening category too. really up boots various boots just boots, heel bunch a very a also dress, significant that's well. a driver. for with And there driving well strong so

Janine Stichter

is just we the expect up more Great, increases, maybe spraying that on magnitude? price should the the then or follow you've quantify it something to already just and and something taken

Zine Mazouzi

for so Yes, that's price layered at lack it But again, single I our you much average digits. are more is that, of as we discounting. the on done think low significantly the of selectively, than because it initials, an AURs look have some we've if to were increases, probably fall,

So direct-to-consumer our segment, go bit retail going you XX%. AURs up into XX% plus we price think to looking are little if as on channels, like versus see take I that more and X% you look could a at initials our we're But 'XX. the our more spring, to

Janine Stichter

Great color. Thank you.

Zine Mazouzi

Thank you.

Operator

with proceed line Shapiro from Please Your question. your the with next Retail Marni question of Tracker. comes

Marni Shapiro

when Hi, they're the guys, outstanding congratulations, stores and in amazing quarter, look stock.

Edward Rosenfeld

Hi, Marni.

Marni Shapiro

initials and normalcy spring, said just into as of AUR Or should in Are clean spring spring? remain your you you same to I half level some back this expecting back layer X% XX%. up half more? assume right, pretty that could and make the even I promotion so some you So it your would up about be the this promotion heard end sure the won't to of the AURs of year? up a this to think just be want that I expecting promotion to year

Edward Rosenfeld

Our continue have plan is controlled very activity. to promotional to

Marni Shapiro

through even holiday? And

Edward Rosenfeld

Yes, it doesn't mean none.

of compared certainly, they but holiday, because activity we expect where promo some pre-pandemic, know, level were You less a during promotions. to

Marni Shapiro

just can ask And of I you sort picture question. bigger one

it's all delivery on you DTC, wholesale to You do to prioritize your get How that guys department products wholesale a Black I stores. last them best so your at own listening reorder the you're the margin chain delivery board, And my go If on factor screen see have you of that happy, your sold your company partners How how it's for really I'm does goes? in but stores, shoe DTC? and I'm of now, own first keeping where Maxima to your out in it or the that stores, in, across own in that going a in, some how wholesale down very chase wide unbelievable DTC the Max, feeding comes products. last like that, pick the When when DTC right the or in reorder, does own work? in you stores. get online customers does businesses? whether

Edward Rosenfeld

parts balancing on a going early we've the the for act the Look, orders. things in been doing has it's sure. is lot year. so Well, website out back our a to and the of back own stock of one throughout of or the year Maxima been of taking And pre-orders

So customers orders. are placing

already channels. important those our placed But as customers wholesale those because us, ecommerce successful business full we as care best take it own prioritizing product who need out be get And have direct-to-consumer obviously well. we're wholesale and we're remains to as soon that the our we an order. So also customers, customers customers, we the of getting then in, them for price to our

Marni Shapiro

great. the of you Best guys. holiday the for Okay, luck

Edward Rosenfeld

you. Thank

Operator

Your question. the Jay next with question UBS. of proceed comes your with from Sole line Please

Jay Sole

seems fashion thanks lot pandemic, just to it And from are share can in gains. wondering bit you a of little parties we so of the cycle? if like return I'm if There's the a to going on. trends, Because market whole there's where or lot rebound there's a elaborate there's on, return work things much. a Great,

to still rebound about you whole different group the in how a lot potential and business? type things those just specifically, to feel see if of wondering where like you work events, So return

Edward Rosenfeld

Yes, a going of running some are. far And say spring, dress it's I even if we it time. was that shoe but you to will ahead the not in it We've significant how party. exactly that of a I terms he shoes for good It's look going that in now, through the had return now out. hard that But pretty -- think to And that's It's to we've say I I think events to going been question. and there right along the at and is margin. to to use continuing strength work. dress return seeing started called really penetration but think out consumers And by in end Steve is actually, where Madden our that that's And XXXX. etc. returning evidence necessarily are again, in going

it dress out have it was. And was it see exactly forward, business is work, returns where back to to where think that to how still if going to we'll pre-pandemic. that shakes I not ever shoe wear

Jay Sole

it. Got

Okay, thank you so much.

Operator

question line question. with Loop Please Your of the with Capital. from Champine Laura comes next proceed your

Laura Champine

and Hi, them know of adequate for in mentioned of into about you XX%. were does which move of supply QX? reorders? you been just taking thanks meet but chain my up the a out I there's know I that demand for tight. lot talk Or inventories, out place run represent inventories into a stock some stocks, we safety issues about question. products has you this Is more to moved getting as It's

Edward Rosenfeld

all, So think comparison is first where I of the I would don't were a say we guess right year-ago. I to

you other much significantly. times that In-Transit, color is Zine, probably down. to Zine And up relative any it to about is sense which were up driven back there? as we all XX%. provide is transit on actually earlier, up. 'XX, The to But there look hand lead In-Transit think that's And makes outlined longer by XXXX. of because obviously, that is number, to the I want

Zine Mazouzi

said QX, And In-Transit as I as for add, at we what we had being the up we're up XXX% well that And at No, shifts down on the hand as you of were and had Ed our of earlier. the and pretty QX. feel $XX our inventory. up mentioned at lines But inventory we the end health against that in of our Everything nicely about that that because balance guidance, in guiding look just when good it for XX%, we're shipping lines look million orders before. you the October, nicely

Laura Champine

Got it.

follow-up. Just impact for this up as of How management gummed spring? your kind does quick strategy a system this inventory

Edward Rosenfeld

we have they place encourage normally farther to out our customers done. place than which bit to they do. a farther than out do, normally Well, wholesale to also their little orders had orders We've do we have

our strategy. to know, as speed So you is market critical really to

don't we we the competition lengthened is times here. good like do compared is lead news that feel are the that So our But fact the our advantage to maintained. relative

our is still that intact. have everybody versus the while everybody are So else advantage extended, times is RX speed like feel else we and lead we

Laura Champine

you. Thank Understood.

Edward Rosenfeld

Laura. Thanks

Zine Mazouzi

Thanks Laura.

Operator

Williams of comes with your question. Sam Your with line proceed from next Please Trading. question Poser the

Sam Poser

of where Thanks But for about ask, to to taking some the my got just stuff. answered. how you question. Most talked want have the going been hot allocate about the products, I choices you you're

slow happening. price the with decisions production where that's the full going -- off-price the and making product large you margin the channel you're lower Given Transit Are accounts, get production or to -- mart margin feed more with to made? the businesses higher slow lower

Edward Rosenfeld

so expect, is you would price as priority always Yes, our full first feeding channels.

Sam Poser

Is like basis? in quarter. also that the like I up a it the right were the mean, basis mart. sounds points merch year-over-year margins XXX on in And merchandise

Edward Rosenfeld

is Let can just shift me and run also here. follow-up. a mix There Zine

a mix. a of there shift retail If you're becoming mix the consolidated various looking from is percentage number, bigger the at

and anything just number merch I across retail. to think you and GSP, consolidated necessarily out were and Is add? margins freight want So it certainly but wholesale else then take the back don't up the can there

Sam Poser

you of Can given? how us on give the especially that you give much details idea on some -- us wholesale the can

Edward Rosenfeld

about GSP that's I XX freight basis 'XX think 'XX. And the of pressure wholesale. wholesale, XXX margins Zine versus to overall bps in from and were points Well, outlined down

Sam Poser

just you're so mean, I So, selling.

normal of with you sort merch have margins. the that going new on Now this

especially much to wholesale than dust go How for about number Going the that you do forward 'XX wants once sustaining, higher stay? is. that the pre-pandemic settles whenever in sort of

Edward Rosenfeld

mostly management I something feel going on we inventory and that's mean, we're about core continue around our and is to strength that. and discipline lean a that of around inventory that's And markdowns, company. to

Sam Poser

label factory, you. on that and you look Do private business? Target us then that business the they lastly, they the business. take What little a give thank does shipping And like your now? And that goods? the possession -- Can last, then color at Walmart with

Edward Rosenfeld

business Yes, so possession of that they most take overseas.

so have the we do goods. where of And they they're most possession take the part it But We again, of ones it, business over bringing here. that land overseas.

Sam Poser

business that looking does how these days? And

Edward Rosenfeld

But we to in be because down shoes accessories in The and label in it get hoping It's out were via tailwind up QX fell shoes QX. accessories both both do was both down outs so doing but private move was we well. 'XX QX. to compared our anticipate, expect of of in products that QX, was to in in we down -- QX, private and that into label

Sam Poser

very Continue Thanks much. success.

Edward Rosenfeld

Sam. Thanks

Operator

from question with next your Susan Your is proceed Anderson question. Susan, B. Riley. your open. comes line line of Please with

Edward Rosenfeld

Hello.

Susan Anderson

hear you Can me?

Edward Rosenfeld

I can.

Susan Anderson

great. Okay,

Sorry, I guess I was on mute.

to just given business that I'm is still space shelf the follow-up chain better And wanted just your it part stock and allowing closer Or you that in still to are And because Mexico. to curious, Brazil you is of curious, is tough that? business in America? just that supply you the chase gains seeing the So then versus on women's some with are all able issues? North moved it be to peers? I'm you to given

Edward Rosenfeld

think out there, was more to I All give right. our our production it at us do we from of is. And of for and Still Yes, the did where opportunity Mexico. Brazil it that particularly Mexico. chase the -- think, to what thanks for ability to I chase ability better shift sure. the question. But have the benefited consumer normally great. do competition. -- great. That's That's big is the is sell that Mexico really country that not the product. the helped competition of us the than product the yes, is And and the shoes thing throughs origin But that. we that really And overall demand the I wants, more us that the versus think that's against are helping for do driver consumer overall

Susan Anderson

think levels? Great. just about on quarter for And one quarter. third question guess in follow-up the should being I magnitude other we similar then fourth SG&A saw as it we in to up 'XX

Edward Rosenfeld

No.

and a higher meaningfully are of definitely in accelerating in the the it's a which sales will QX there's QX, carries Obviously, DTC SG&A. versus higher also a much you're If 'XX, QX. higher, penetration be to or growth higher retail comparing

Susan Anderson

it. Got

Okay, great. this holiday. Good Thanks so luck much.

Zine Mazouzi

you. Thank

Edward Rosenfeld

you. Thank

Operator

your the proceed and King question C.L. Steve Your Please question. Marotta comes next from line with with of Associates.

Steve Marotta

and Good you taking morning, the Zine Danielle. I appreciate Ed, question.

in looks that to year. As a as that the question, the in you curious the of carts little the on composition is now be bit expect this quarter a the South to Central I it composition a what trend answered am pertains America and you where quarter, third meaning and doesn't Americas more as Far know but where it and But versus last how standpoint, It to XXth for East will like the percent. of of and towards? the sort from and I'd numbers maybe generally to next would specific fourth have from

Edward Rosenfeld

anything when shift because look Madden out Well, talked Brazil look at we Brazil up bulk doing we're we but in women's the look add the -- when the some And business. Mexico to business. of makes as in I, you percentage priced in of single-digits we any again, business that at have. China. and we have that XX% the getting bigger, of over label at of Steve you areas still moderately again, overall, Mexico, in total. been We've businesses business, lot business still but of of don't a and private more and then as the or a about have the a that Asia, in -- those Because countries when overall, other countries not the lot still the line you the of now,

And similar what somewhat it look year. to I next still as going that's today. it like now, looks that think is of to So

of pulled shutdowns few the that stuff of instance, the we because right Vietnam last some that over we that for of couple experienced had that the China. back But that to was will obviously out months. of south country We continue now, the Vietnam, in diversify were were

Steve Marotta

sourcing differentials this Single year? major year next versus

Edward Rosenfeld

see No, think be Brazil grow. Mexico still and it will generally speaking, similar. you'll I But

Steve Marotta

Terrifically Thank you. helpful.

Edward Rosenfeld

Thanks.

Operator

remarks. to questions. the time, are for turn any management over no call And like I to back closing there further at this would

Operator

have on Great. this speaking day Well, great morning. you and a quarter thanks And to joining forward call. the fourth everybody us look Bye-bye. with for we

Operator

We thank participating. conference. This for you concludes today's

You disconnect. may now

Steven Madden (SHOO) 3 Nov 212021 Q3 Earnings call transcript