SHOO - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2024 Steve Madden Limited Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Danielle McCoy, VP of Corporate Development and Investor Relations. ahead. go Please

Danielle McCoy

good fourth and and Thank for you Thanks, and morning, full our quarter call year joining Kevin, everyone. XXXX webcast. earnings

by on within that begin, remind that your we we like be our statements that -- forward-looking to statements Before results the such questions, contain our meaning expressed risks that to Private are statements subject those including . Securities follow, I'd remarks of statements. from believe cause answers the forward-looking Litigation to actual forward-looking or differ Reform to implied Act. you These to materially could

include, forward-looking matters today all. in and risks which updated be statements, obligation SEC. next we earlier our make we have any with the may earnings at not These described if among our conference others, call, filings We until issued these press quarterly update release disclaim that to

directly otherwise and basis The reconciliation our to financial an contained are on results earnings most adjusted GAAP are in discussed release. today's A noted. associated call disclosures comparable financial unless on the other measure

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

Edward Rosenfeld

and Danielle, All right. and Madden's for thank you us morning, Well, thanks, to quarter full good year everyone, and joining fourth Steve review XXXX results.

capping end to We model our as XXXX, results team's strong diluted the our and guidance results a strength power well demonstrate our EPS of high for of our XXXX. in business brands delivered X% of the strategy. range These execution revenue are fourth which and our of disciplined to the compared XX% have of as off pleased at we year the quarter earnings grew

you walk the me let . highlights. So through

our test trend-right teams our foremost, consumers. always industry-leading react win create XXXX, top product design speed-to-market categories capability across model, and In brands with combines talented product. that our and our and various product proven to which priority teams, assortments resonated and to utilized strategy a First with an is

with our letter our global we New City, marketing love delight increased Song highlighted that then in Miss this featuring to We hometown Be, investment product Never fall funnel marketing of strategy, our called in Madden a York full great in groups the brand the campaign the Steve for iconic supported by heart.

deepen of combination with this our and Together, across product and X marketing our drive consumers to effective key business us enabled outstanding our drivers. results connection

in markets. including those Middle despite prior growth our game XXXX, environment, of in the The key in international in retail XX% our and East versus expanding year. business the first Revenue is business region challenging In in EMEA strong South Africa. the increased expansion revenue grew a drivers Europe XX%, solid explosive international a

Canada as gains X%, which off ex In in the grew percentage the mid-single-digit venture U.S., to Americas our Mexico start. from including strong as well Latin new America, is a joint contribution revenue and in

We to also key to ownership transition in from markets. an distributor model the model continue

we America, in partner joint also Croatia we Serbia quarter QX XXXX. Europe, company including in joint converted formed In second the venture fashion XXXX, for in to distributor our aforementioned with Southeastern the Latin of a countries addition in venture our business certain to which and

Australia, a and X Myers. in in JV ventures the in we currently with currently structure. including e-commerce e-commerce JV and we January, stores converted we for operate Valiram leading JV Jones in in we also partnership where majority-owned We retailers, have January, to fourth in stores wholesale new Then through and our joint XX Valiram distribution formed in David the quarter, a Malaysia Group. player in operate formed Valiram And Singapore regional a with with

accessories overall accessories like expanding key Almost XXXX driver XXXX, business increased excluding and compared apparel XX% in and Famous. revenue categories outside footwear second of apparel. is or our Our to In XX%

the revenue handbag in business and outstanding, million first $XXX compared prior Madden Steve the mark crossing was Our increasing time the XX% year. for to

Since basis, traction, per with on XX% contributing Almost apparel first has a year margin to XXXX, our XX% nearly and compounded under gain Famous in revenue annual exceeded continued Steve expectations increased also revenue XXXX, XX%. million year operating revenue versus an division full $XXX in Madden of its handbag the up ownership, with

$XXX X%, growing increase on a key while XXXX X% our or channels. versus driver XX%. X% basis. in revenue revenue business DTC Vita was is comp Dolce Steve DTC in grew revenue third Our direct-to-consumer increased million, DTC XXXX growth a Madden

our And our is business. key driver footwear strengthening last core wholesale U.S.

many strategic our with initiatives. control, strong inventory top compared robust to business XXXX, bottom with to for a X% XXXX. growth to increase key and our customers return XXXX to was on prioritize orders as wholesale growth in Overall Madden, a key continue a we Steve driven by they progress this approach in year take tangible revenue While line of pleased to were cautious

We also returning million commitment to repurchases. combined and nearly shareholders with dividends in ongoing $XXX capital demonstrated share our to our

imported ahead, efforts and our face for the out production impacted meaningful cautious United new as be Most headwinds. As we into aggressively by XXXX are we near-term to we China. by notably, will our negatively diversify look however, on States, outlook tariffs on of earnings our goods

for business, pressure parts have certain customers. handbag channel growth leading buys ordering resulting in the of our and as open to more us in inventories which to year, has key this expect driver in up, backed been wholesale wholesale years a cautious recent handbag constrained also face from We

categories the categories, forward image, have business attractive distinctive navigate a aesthetic markets, we design agile powerful led positioning proven in engine handbags, a of are to XXXX. and second in our Kirk compelling with looking elevated strategic have expanding Kurt quarter unique the accessories difficult to value of alignment its addition growth by Geiger of initiatives make market and London we on proposition direct-to-consumer its it's brand differentiated expect has we multiple new The brand to the growth the our acquisition to said, which and company also And a February success adding model. conditions with close XX channels, to Geiger, and exhibited ability That it highly over last as with in complementary our portfolio. exceptional across several and years international driven announced

in Kurt luxury to brand addition sells portfolio within footwear where Geiger Kurt premium Carvela. KG Kingdom, the Selfridges own operates both and third-party Geiger department Geiger it United In London, And and company its including concessions Kurt Harrods brands. also the and and stores includes

GBP transaction reflects an X, balance Geiger price over value purchase to the million XXX with months XX the upon Kurt closing of cash XXXX, the of payable XXX of X-year The a ended in For February due million. achievement certain targets. and XXX enterprise pounds at management period million revenue GBP financial had of GBP

continue of management years. Geiger CEO, on to for agreed led over Kurt lead who and to the executive our Importantly, have under ownership, including XX Geiger stay team members all Kurt Neil Clifford, has

long Kurt model, supplemented driver the to sustainable our us combination we while and in are headwinds our So and Geiger, drive growth revenue as in are earnings proven by And key meaningful a will faced term. and of in that new progress revenue strong clearly in significant have pleased delivered XXXX. some XXXX, on over enable initiatives brands to we confident we sum, earnings business strategic well strong the growth as growth

turn to fourth full in I'll detail financial Now initial for and and quarter to year over it results our Zine our outlook more XXXX provide review XXXX.

Zine Mazouzi

million, was a $XXX.X the good everyone. fourth consolidated Thanks, quarter, XX% of In Ed, to compared revenue our morning, quarter and the fourth XXXX. increase

XXXX. accessories XX.X% up domestic was up prior of compared year, across the million, quarter the was by in $XXX.X apparel the XXXX. revenue the percentage was private and Our a $XXX.X fourth to period and international million increase wholesale label branded from . million, board apparel and and the in Footwear revenue to XX.X% double-digit and markets strong revenue quarter Wholesale $XXX.X driven fourth businesses. categories, growth gains X% comparable accessories with Also, in

$XX in of million, and X.X% to our businesses. e-commerce Comp January brick ship up and rose were business in well retail motor and quarter including increases increase XX in as the ended were end as from websites benefited brick-and-mortar and XXXX in X.X% markets. We quarter. to both was compared the quarter $XXX mass the stores, segment, with XXXX XXX that expected in to wholesale company-operated OpEx the international company-operated of In the XXXX. shipments XX QX Our also the sales fourth with revenue e-commerce concessions X channel to of an approximately direct-to-consumer the million moved year

of period greater the $X.X to XX.X% a Wholesale the royalty mix of fourth quarter margin was quarter compared Our fourth XX.X% the million to in in quarter private primarily in XX.X% compared the licensing in gross businesses. XXXX. compared margin quarter gross by Consolidated driven the to XXXX, of of in $X.X comparable XX.X% label income was was million XXXX.

margin by gross comparable compared to promotional XXXX, increase XX.X% XX% Direct-to-consumer driven period an the in in activity. was in

saw not promotional compared concentration of we While we promotions, during more a year. periods or prior spend higher deeper the the did consumer run to

$XXX.X XX.X% of expenses for effective the XX.X% million fourth in the million revenue compared XX.X% the compensation. in comparable the was or to rate income Operating benefits of million quarter XXXX Operating period by XX.X% the quarter to $XX.X were revenue or in quarter of revenue the $XXX.X $XX driven was or of The in lower quarter stock-based compared fourth X% for compared to XXXX. or of the quarter revenue related to prior million discrete XX.X% year. of in tax

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

on briefly for compared $X.XX million to compared Now $XXX.X $X.X Net ended per or XX, share full the to billion to XX.X% Limited $X.XX XXXX. I'd million Steve $X XXXX. the for $XXX.X XX, Total share or Madden December results. ended diluted like in year increased XXXX, was December for billion income per attributable year to XXXX to touch revenue year diluted

the to Moving balance sheet.

strong. financial Our remains foundation

cash million we no cash, As of investments Inventory the XX.X% debt. had December year. of prior to $XXX.X XXXX, short-term was XX, and up and equivalents million, $XXX.X

$XX.X quarter Our year the million. CapEx in and the $X.X fourth million for was was

acquired approved repurchases and of be a dividend stockholders employee close the to and of $X.XX settlement XX, of common XX, fourth share. stock including $X.X the XXXX, stock $XX.X During dividend as XXXX. net the of full shares March of year record the payable XXXX, company's spent of March quarterly awards. company on Board on through its per The quarter million, will on Directors cash business respectively, of The million

Turning to our outlook.

Kurt for Geiger be $X.XX expect diluted range from to we revenue We and includes XXXX, that to closed to to XX% the of May acquisition increase outlook EPS $X.XX. This compared date. Geiger the XXXX expect Kurt XX% on assumes to and X in

expect Kurt diluted Excluding single $X.XX. we to Geiger, low on EPS basis of range be we revenue the digits to expect a $X.XX to in and percentage increase

In quarter, comparison toughest quarter to to year. we the first EPS QX as to decline approximately XX% our XX% of XXXX the first represents last versus expect

We investment are our DTC increasing under business also our has market quarter-to-date. and in QX, significantly pressure year-over-year been

to the would like Kevin? questions. I Now over for call operator turn to the

Operator

Instructions] [Operator

Our first Lejuez Citi. from with question comes Paul

Paul Lejuez

lived you that as it versus baking be to from Can any investment business throughout investment, are this thinking see you're if forward. that then plans year, you any the what you you about Geiger that year kind also on move occurs maybe of the pressure And about the year? should the talk if about drag gross going what get in tariff investment needed mitigate needed you'll given curious, impact we in, are . just throughout thinking and into margin Kurt how there's your as

Edward Rosenfeld

Yes. Thanks, Paul.

question, previously, tariffs outlined terms that production of mitigate is with yes, it's one, China, playbook are really pressure the already. respect The in with we are the significant essentially plan dealing diversifying number So strategy making part this year. of out first of the that obviously, to progress from we and we've to

on XX% China, the United today the that brought from the to number call, sitting that on that we so is at said those that already about imported down year this here last that what's on coming far in were of what States recall to goods time that based we we've and order, XX%. You'll already on

year. call, continue the expect since a make XX% progress the to reduction we throughout last and almost further to So

that You'll we're to be low in year recall from to goods terms the down was that a goal election. of our XXs placing the

of So year and low that this essentially we we placing are we're when November we're think goal. marching XXs, goods, towards targeting

not we're price concessions, back piece And going raising be of about across-the-board a selectively it, factories and looking that The And course, increase, those more think be little discussions but in goods, we we of and price the will third we plan going ongoing. and prices. are, bit other to then will to pieces get mitigation we're do for we an fall. the it's -- we be can the starting will is that surgical are for

terms we're up at margin specific gross margin not we think specific commitments provide the In revenue fluidity, but guidance uncertainty get today. for clarity more throughout as prepared tariff time. any around the given a not color impact today. guidance, the of obviously, to and We're we provide essentially, that the that margin EPS and But more make go gross here, the gross or you year will here specific disclosed, I signing going to and we've all

Yes. to Sorry. I forgot I second to the apologize. part. respond

So We business, see a margin opportunity investments. to or don't operating meaningful of on I think no, But required the we'll there's be certainly in Geiger, no that grow for there's big any Kurt first lot upfront. X year drag investing. investment and

Paul Lejuez

And of that won't your terms half? in on -- half to efforts? first in some back offset the second those Any ability seeing for you to Or color we the come mitigation gross half? is the execute of that going then Are not as something margin, see that first second just the just through is that an Ed. pressure, half

Edward Rosenfeld

even is the Look, more situation quarterly again, in this all, And of uncertain. provide place. that's we a first don't guidance first

the longer the to try hesitant are, too quarterly to the Obviously, I'm out much around we But have an mitigation the the in cadence color give -- the there. further So more efforts impact. we're our in with give . term, also seeing in engaging discussions well. as we us near of and help bit the term to factories little certain a can what near do

Operator

comes Andreeva with from question Piper. Anna next Our .

Anna Andreeva

from us. A couple

just seeing macro and First, well. as you mentioned tariff have out Feb? versus think parse guys hurting are And improvement pressure Any some but is you what DTC under follow-up. mostly you is Can then a January in quarter-to-date. you do is February? . you And in the weather we this conversation,

Edward Rosenfeld

Yes.

to particular, start folks the talked that this is we've slow And stores. to I we including consistent Madden a selling I of not have something just a a and the slow and in We traffic we're a spring seen Steve seen weak that to in of think industry, is the start year. products, something would say, lot sandals, to from hearing a the we phenomenon, retailers lot of other speak with. overall

are year hearing that start because we we I'll need a there other watching. cold folks some other I country. the to the to obviously that that point, this to it's say have very think that while to we at be to in are they're to a look, with But slow think been have weather, attributing -- folks, other this are across of blame going we're to the monitor the we my signs loath from of in weather, I lot industry lot conversations

weeks the couple Obviously, consumer sentiment. seen I shown in all pretty have think confidence we've over that the significant last figures drop a consumer of

we'll So February to between terms carefully. any monitor that major January Not trend? in have of difference the and

Anna Andreeva

for think business, KG, Can the in offsetting we think revenue do from of now right And about How super production mentioned China. EPS acquisition. how secondly, you should on talk I there? why contribution year? think you . XX% this exposure congrats acquisition? tariff time about on their contribution this you over the the is think and about helpful. make to guys the That's Okay. And the you is

Edward Rosenfeld

Sure.

big why we London And we this of brand. So became Look, can profitable fundamentally, acquisition this available. to is this the Geiger terms opportunity -- very want in very be make brand now, because think Kurt and a

As it's a I unique with mentioned in design image prepared brand brand aesthetic. remarks, and the differentiated really and

shoe well. led is last of accessible years. really the part that's price value over it's a lack would a strong really as of plays obviously generated with and a heat handbags, a by a we sustained several And It with the strong term, better call, growth outstanding market, attractive what consumers. very really combined brand business that, with proposition, And luxury in resonating for brand

up that on was year XXXX. over per it XX% over So a XX% a annual brand year, was basis since last compounded

years, I If you But journey. untapped that year. ahead of that $XXX million of of look a just the $XX that XXXX innings and lots still growth the did early in it's recent in and all U.S. growth think despite still million growth it what's it. runway, exceptional really its at very business exciting the U.S., It's in over about was it's potential under last is in

It very the also very It's it's brand a very -- think image, very a different in different brands fit from different really a that other with company. our has a our good aesthetic, portfolio. point price I just different positioning,

talking So advances it's initiatives international in accessories, respect, the that strategic in last and penetration we've is that about our been the which increases and it it because years, and several DTC. -- for complementary in

So high-quality think assets. at really and And I for a fit pretty we're got such us, excited think high-growth it. it's an and a attractive frankly, for it we value we perfect about

that business is it's I In States. good United their the the do want point us, a in of of tariff different only exposure, done XX% out terms question. from to overall

It's sourcing is U.S. in they by XX% virtue today. are XX% from about majority you have it's the China right, do tariff their is considerably the that while because the of China. significant they that do that have coming just U.S., done the exposure business on the exposure, of So fact less to of a outside

be that -- working help we in I I think we'll something to think clear able them of a with. product place over that have a handbags based path to we their as higher them. time. and as there's think There's well on their short be with we'll diversify points, them, that's plan diversifying And relatively to majority price a And period being mix do a

year. impact, of of X it's year Again, EPS the partial in the year. about the In terms we've that $X.XX May the that's through end for built for this

Operator

Our next with BTIG. Stitcher question comes from . Janine

Janine Hoffman Stichter

within growth Steven the wholesale, DTC? how and it's on So just for mass . low versus you're the Madden whether maybe And about thinking planning you business, unpack that about how different year the the can branded you're then off-price segments, organically, you're thinking single-digit wholesale .

Edward Rosenfeld

Yes.

low looking in that we're if a within consolidated wholesale down wholesale mid-single little footwear high single apparel. singles and So excluding bit, singles digits wholesale in KG, up on digits we digits a unpack basis, down at in DTC. and low low that's up wholesale accessories single and in And

we In branded saw will last in . growth from different label. versus terms private actually We of think grow, have branded year. what will private label better than XXXX,

Janine Hoffman Stichter

within about more almost that Great. And and the this that then the apparel the started mean handbags are thinking assume digits. wholesale mid-single lap growth significantly. acquisition? apparel to I would down year accessories How you've you now down

Edward Rosenfeld

right. -- Yes, I that's think

I Madden looking we that at think on are double at down being think Steve that this the point. and we've the we talked digits about business, handbag that pressure

we'll to apparel we're see business Steve bullish nice of on terms In Madden apparel, continue I growth there. and the think

a of a just We to that chunk expect move. as a is well. And Part private there, do pressure. that do apparel some good have see we is label just business of

out called January December. typically significant goods his think move in into there in remarks prepared was go a that out that I Zine would of fairly

pressure there. little And that's of causing a so bit

Operator

question Retail Shapiro Tracker. Our with from next comes Marni

Marni Shapiro

shifts on is the there shift aware past private comment. Or kind we actually from you're other general apparel pressure just side? January, the that, are be of? anything follow from that pressure into or December a I should it any last just up label of The once on

Edward Rosenfeld

well. I think see I side pressure piece that's do it. on a a to as big But of little that expect

get more bit some little We their mass those of are a orders. customers conservative seeing with

Marni Shapiro

specifically to you at the -- And looks growing. fantastic, the little bag? bit just Steve pipeline the customers? slowdown you I That much think beautiful Or is could you the said you in little mass way seeing makes level in the and apparel it Are sets and the a retail see, too could at then inventory was mass all stores at the every it branded the talk at it by about up at Man you're level. shoes. bit sense. nice It's in to seeing way, a more

Edward Rosenfeld

comments Yes. really about progress good Well, really first We're we're there, feel and excited Steve about about of all, that. thank that you the making the Madden. I for

that handbag the bulk Madden and we're of acutely that most of so years. tailwind business, is us, in in And us and terms recent a seeing strong growth where for that that's has business the our been that's is obviously In that handbags, of tier been Steve such distribution. for driving much business

does And and that's it. put so some on when the bulk of numbers because one that handbags pressure it overall . the slows down

Marni Shapiro

able one the in. It's just product the to obviously, month came shipping the Because before? went over spring last to tariffs you product you've Those following in. sneaking up of or goods come more, in been just on much in continue before so. how tariff bring going I And were back conversation. to your guess

feel peak but impact. came is product that you tariff, of, wane I want Is really does QX call Or to around any it that? is and start to in the or when to when don't So -- it QX? that sort start guidance the pre-tariffs

Edward Rosenfeld

is Yes. the return wholesale going our which even the in companies feel about means contrast in first to of faster that the may into still tariffs on close to earlier than anybody goods. XXx in of it we just channel, on at start early year, to only our February, We mean went you so will end the to than quarter say if others. the that we're in a inventories And certain quickly. particularly effect our because I'll else inventory industry, some inventories follow, feel this other thing turn turn we I that

Marni Shapiro

luck, product makes of looks . Got guys. fantastic, the it. That Best sense.

Operator

Laura Champine from Capital. comes with question Loop next Our

Laura Champine

attractive. I be the kind so, like this if Is Kurt was and valuation M&A big that is you you across widespread? Geiger this feel on other this is And concur Are this for one that to enough a that done seeing Or of open board? the year? that year? would transaction you

Edward Rosenfeld

is opportunity super This this a going impactful is think We transaction forward. a us. for really important

think I focus is time this success. being. be on setting integrating that So we'll our be for focusing oriented never, on Geiger year for to never certainly I'll the up this say towards Kurt but and going this .

Laura Champine

Understood. And then on from of the wholesale wholesale footwear margin business, you of pressured QX label, . without would was private mentioned have penetration channel? in the that footwear because grown gross growth higher mass

Edward Rosenfeld

business branded about The X% in was down QX.

Laura Champine

in that is expectation you And have XXXX? an to improvement do similar Okay. for --

Edward Rosenfeld

do. Yes, I

I think better. it will get

think singles. really thinking XXXX. low should turn how up that's be QX, And in it for we able to positive we're . I but about

Operator

next Our Poser Trading. Williams with from comes question Sam

Samuel Poser

I've got least a handful. Hopefully, you can half get to them. at of

as Just back out the . to the we for look to year some what expense you're anticipating on be interest half the housekeeping

Edward Rosenfeld

-- new loan on there not we're guide line the what assumed the will the that at -- to would I transaction in, that new do start. I are May to that you statement. SOFR We've transaction. we've again, plus XXX X closes income But guess be incurring that, to the term Well, is built what going I debt tell every we to would

gives enough modeling. . your So hopefully, that to do you

Samuel Poser

how how that revenue with much lift changes those does so how to do where moving all it? much on JVs JVs or -- being done things or other and the like the to work on, Anyway, You me of planning to in of but places revenue, in on you've equal it's well -- accurate, that the okay. sort it know know distributors enough to subsidiaries that not

Edward Rosenfeld

revenue actually us those million. is negative does exchange Unfortunately, a probably this than more this also say rate translation, year million. there's impact going from a changes to year bump. revenue from $XX incremental Yes. I $XX approach would That give the is which

that all stronger more offset by is So dollar. being a and

Samuel Poser

how help mean, Geiger the do Kurt of guess, is and primarily at what do concessions -- maybe you business, Kurt synergies with Kurt what the you the then, grow have percent just Geiger Kurt of in of Europe foresee, U.K. initially the And some international might Geiger other Okay. that I help I let's when -- say, you plus you U.K.? incur business businesses growth the their in other And have, Geiger look

Edward Rosenfeld

Yes. Sure.

Geiger about, as So little the geography, Europe U.K. if is rest balance in of at it's over world, you U.S., XX% we the and of in obviously U.S., a XX% look which Kurt a XX% those mentioned, at by about the of in revenue in the the is and important. the it's If business, the little the in we it, excluding world. branded concessions, just the the rest in XX% over at U.K. look then balance the

that and those Kurt capitalizing that that, we and So relationships the once top start of on think in that's markets, one a work some synergy be we do international close infrastructure the synergy our we is really significant area markets. going of network new priority expand to And on to us to these have transaction the some opportunities. to Geiger for utilizing into pretty opportunity is Steve Madden

the they and been X stores of we another Kurt their already in under look, that to exciting they terms stores Steve London, we'll already and -- have operation, They concessions. the here. for obviously out U.K. for years, and roll Geiger expand look but of we with partnering In us Geiger piece synergy have, in have already also Madden that in operate concessions Kurt more relationship that's

Operator

Tianello . comes Paribas question with Our BNP Aubrey from next

Aubrey Tianello

think double give the it And last On rate right then grew could expand Geiger, about digits you business? to existing year. the margin should about how color to there? there? Is margins the to are Kurt I think on we more think longer-term And your opportunities profile what long do the term? that growth compare how and

Edward Rosenfeld

are frankly, that of this growth double think I And years digits Geiger there's we -- here. that grow for forecasting a year. runway for double-digit number this Yes, Sure. for Kurt for business to

of last margin of the terms EBITDA XX%. margins had over year, In they a profile, little

that how amortization intangibles, this be take an how been certainly, more for double-digit to haircut today's then line about opportunity want the just X.X%, come to has to for there, team quickly I impact. not the small a we'll current business, to specifics work we're closed, depreciation don't a time taken long margin margin with tariff get we've we'll year, because this on a on But once operating this on our back and and year you which but we'll call. estimate for And looking you at of Now transaction get clear there a out there's when of operating term, think get finalized, with we provide there.

Aubrey Tianello

just That's in time maybe to sheet to And great. a whatever kind And target of balance net plan terms frame position? get your the Is is? what's to back of the get to cash leverage. then

Edward Rosenfeld

Yes. been we think this $XXX approximately we've be position million cash operating need Look, net don't to there. of net I with in cash.

have and will plan talking most be . get of And back debt to small net position look the We modest. a X, to position. about go we try We're then at point, resume that half share of of to likely I would there. repurchases though, neutral at sort a closing. pretty net from debt to to a so net would And EBITDA, turn debt think

Operator

Telsey with next Telsey comes our from Dana question Group. Advisor

Dana Telsey

And through you almost mentioned did payer. increasing doing or how to Ed, marketing this And $XX compared effective? Almost or they media item price then are the is much? about think price an by social you thinking Famous, you either the go How was tariffs think increases, are increases it investment, you about did what's it? by this you quarter? about think time, do you And last the we how And outlook? what year I do as said what you then and differently, was and category do year the how

Edward Rosenfeld

Yes.

terms price in has we of several over last do a So have careful increases, the price I exhausted we to have think look, here. increases consumer who be by years. Obviously, been

mitigate $XX, through can the think increases the I take do we just some we and same of raise or to what across them to price pushed so styles And exact prices of get board some impact is just the but do need here don't tariffs. raise

have increased of we not and focused again, that's can And we're and we really will really the so the product, being that up materials where then the and value is proposition raising is, there where product, prices things looking is price prices. where will and come we a elevating have be other at really fall the that can in we looking what a perception those And so that newness, there value -- for surgical, very all. of we we're items strong one have raise delivering and we're raise the line is focused detailing really on therefore, at on

some overall XXXX, move of In normally terms a in a very in strong out shipments we gone as in from mentioned, had in a Famous, QX, year very went strong did of Almost have QX. otherwise out they that benefit January would that

with there Madden could how that and label XXXX. you then impact the marketing. cautious was Dana, am XXXX. about I they're branded But marketing. Madden repeat doing on I good question NYC, last business in question the the them piece Girl just And more about in private and So will overall, the about very feel

Dana Telsey

Well, that doing And investment you're in special should on that going anything mindful up we is XXXX? be of? in marketing, much quarter any how

Edward Rosenfeld

I in Yes, you marketing Sure. see think increase XXXX. will

Geiger, be I line. again, excluding Kurt a should relatively as in think it revenue, percentage of

wanted exciting campaign better that with we even marketing Steve that, significant there of to drove that got follow increase increase is And there a QX, However, great marketing is investment significant to QX. results, think up think had in in we really we really something so we QX that investment very successful similar. support and because in launch we've in And for House campaign going week. of calling next a a that that's we're new in spring, fall

we year. balance into more essentially not prior -- seen year you for the the in in Once with we've what will the get QX, line be of

Operator

Our next from comes question with Corey Tarlowe Jefferies.

Corey Tarlowe

the performance inventory. your the up It that as could has double then wondering gotten also you're on of if newness a was bit health touch curious you you was relative about but to if that digits flowing the I talk Great. boots talk what's just the about inventory, if working, low you colder. in, weather could could sales, and of little

Zine Mazouzi

Okay.

. of relates And about at very as it due the we to to increase, period is obviously, due end a it. accounting of QX, increase to So that I'll times. you the the longer take question at of of our we're the if part the first good time primarily feel XX.X% inventory composition look the the fact inventory for transit for

look that's it in longer Middle at our you days here international goods an around Cambodia China X times you as example. peak look it's longer, and an X East both where get But example. On businesses, the and when U.S., XX around the transit days as days to at if are and to average, it probably could globally,

So it of low perspective were year at out last X we're take and expecting digits, from inventory end days an you with year, the to apples-to-apples and look of versus be. of the how at if balance single the up that's those consistent year you next

Edward Rosenfeld

spring in right of things quarter, of obviously, we've good in lot category. Great. we working to we now, felt had terms great And consumer we in our lot getting outperformed boot did But first boots, right focus the that because particular, season. boots And that boots. And yes, cold that in stretched brown to We in very particularly had part boots, our the weather with styles. course, boots, continued the a the really then into we've styles. transition a first a on quite sell the to of year, of market tall-shaft as in is come good with that, of we the

we very I because thing have . very do say going package the in a to Now remain loss one excited will festival that is strong spring still about. we're important

is QX. And big been time more not of we this the boots what for about, as talking category as as of year but we've these days, saw a us in year-round obviously,

Corey Tarlowe

do And the there about -- think at it. you comments to opportunity structure your international these to internationally? Got further else you just of made work an much then made. follow is in agreements How the of you some think on business terms And markets? helpful. question to shifts earlier up very made there's more of That's international changes you've do that optimize to structures where you've in the that be done in

Edward Rosenfeld

some venture owned process. that's these subsidiaries done Yes. markets We of an ventures time, still sense ongoing could And see to the We've a distributor over could joint model. time. joint make have some mean also I that I becoming lot. to transition wholly I think, over

the think continues very I very APAC, a opportunity, is standpoint, though, we've we're doing -- EMEA in regional in a biggest From to meaningful that see business got growth. now strong

small still in the the a call business U.S., America, is Americas we We've cetera. Canada, big et relatively for But us. Mexico, Latin -- also ex a got APAC region

And going of making us that focus so be a big to the for that's years couple is over more meaningful. next

Operator

Williams Our next question comes Poser from Sam with Trading.

Samuel Poser

I got another chance.

Okay.

Mexico, to speed the and I how future and I the -- with China as at with places to we'll more going from well longer, other market you does your move the visual is I move in that sort going to the you of days to X look -- out shift product week, Vietnam, the on taking U.S. how see X . find So out, but said guess, future guess, in that -- inventories change increases quarters, longer other do to guess, you areas as as was that's how product with next the again, What moving unknown you days primarily, total it inventory

Zine Mazouzi

to the to just everything of just the know one, chain not about. business Year sways seeing being also earlier That's of also basically, canal the up days clarify, to the on doing diversification. the load New and Chinese that in we're that and was pressure that always add X X supply front reasons: the for that, clogging X is a So we lot were folks chain. And supply

to So that and the to forward But diversification, either I mentioned that move at, we to would that was expect as see. days reason meetings said we earlier. a in or X main think other countries it looking as from get in I had, we XX basically, longer what calls we're China, our takes to week the the behind versus that's about on and X days earlier we these

And the thing DTC transit I inventory will it our in move seems we this of is impact it expect days and said, we be and to as penetration in just point the forward. And only time, to continue by that as at line also total. the it impacted is to

Edward Rosenfeld

ahead... Just to Go follow up go ahead. on that,

Samuel Poser

Go ahead.

Edward Rosenfeld

operate. meaningful to the going fast any we how reduction not And say, to accept market obviously, just going is absolutely we critical way was speed we're be. in I to can to

those to under guidelines. that have operate we So under

And need do so We -- can that. we The leave China mentioned, we of these certain where we countries move have some that. around in Asia, as things to lead to slightly Zine we to plan moved faster. longer plan can we times, around have in other but the

there, we a mentioned Obviously, particularly been next will because a the But can that going to us brand Mexico, are there's for that Steve Madden has a resolved, much shorter obviously move been due the situation. times, potential that of Hopefully, again. because transit the Mexico you Mexico. of we and can actually tariffs priority in plan to products, into be week. start monkey now scheduled bit . wrench we'll little monitor that on to focus faster get

Samuel Poser

Okay. frame Kurt their And I using up then what how Geiger, in footwear, is resources, -- with does is there, you mean, your that how does as that could And something well. work? speed time

Edward Rosenfeld

we I longer. of business. also a imagine product get and do the their collaborate that. our bit price necessarily certainly to Yes. kind have to there little model sourcing speed-to-market times us different, think that Look, are a with that utilize test But a for them. to we'll lead assortments, where It's will nature capability . we I need by don't them, a their positioning, And to same areas points, their do. react it's have into of and that their the help different are

Operator

comes Our Paul with . next question Citi. Lejuez from

Kelly Crago

This Paul. for on is Kelly

Or China in a you just are income assumptions well? much Mexico are Just just you And follow-up of you missed terms of this tariffs how tariffs? is you . maybe year? your assuming but first Are including What embedding currently. on from did your your I as this, previous tariff Mexico say comments.

Edward Rosenfeld

Yes. Sure.

that's that as then those included an have but as of have mid-single we fall. well, would tariffs out if in Mexico And we move digits our percentage about -- in assumed of also effect, a We from impact that overall back are sourcing. products Mexico --

over the would be And already months, the so or are in built way. on in the we've impact things next primary work that that few

And then there's guidance duties as anti-dumping and implemented embedded China, also have the that's on an in in they the well. country goods impact additional also from because Mexico of

Operator

showing like closing over And I'm I'd to this call further any . to turn at remarks. Ed the back time. questions not any for

Edward Rosenfeld

a Great. and Well, much the the day, on thanks speaking great with so Have us you next today. look to we for call. . joining call on forward

Operator

Thank conclude does and you. gentlemen, Ladies today's this presentation.

You may day. now disconnect, and a wonderful have

Steven Madden (SHOO) 26 Feb 252024 Q4 Earnings call transcript