STEVEN MADDEN, LTD. SEC 10-K Report

Steven Madden, Ltd., a leading designer and marketer of fashion-forward footwear, accessories, and apparel, has released its 2024 Form 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the competitive fashion industry.

Financial Highlights

Steven Madden, Ltd. reported robust financial performance for the year ending December 31, 2024:

• Total Revenue: $2,282.9 million, an increase of 15.2% compared to 2023, driven by growth in the Wholesale Accessories/Apparel, Direct-to-Consumer, and Wholesale Footwear segments.
• Gross Profit: $936.9 million, representing 41.0% of total revenue, compared to 42.0% in 2023. The slight decrease was attributed to the acquisition of Almost Famous and a greater mix of the private label footwear business.
• Income from Operations: $224.9 million, or 9.9% of total revenue, compared to $213.2 million, or 10.8% of total revenue, in 2023. The increase was due to expense leverage on a higher revenue base.
• Net Income Attributable to Steven Madden, Ltd.: $169.4 million, compared to $171.6 million in 2023, with the decrease primarily due to a higher effective tax rate.
• Diluted Earnings Per Share: $2.35 per share on 71,963 diluted weighted average shares outstanding, compared to $2.30 per share on 74,565 diluted weighted average shares outstanding in 2023.

Business Highlights

The company achieved significant milestones in its business operations:

• Revenue Segments: The Wholesale Footwear segment accounted for 46.4% of total revenue, focusing on dress shoes, boots, fashion sneakers, and casual shoes. The Wholesale Accessories/Apparel segment represented 29.0% of total revenue, primarily driven by handbags and apparel. The Direct-to-Consumer segment contributed 24.1% of total revenue, with sales through retail stores and e-commerce platforms.
• Geographical Performance: Steven Madden, Ltd. operates in the United States, Canada, Mexico, Europe, South Africa, the Middle East, Israel, Latin America, and the Asia-Pacific region. The company focused on expanding its international markets, particularly through joint ventures, with new ventures in Singapore and the full acquisition of the China joint venture.
• Sales Units: As of December 31, 2024, the company operated 291 brick-and-mortar retail stores, including 218 Steve Madden full-price stores and 68 Steve Madden outlet stores. Additionally, there were 42 concessions in international markets.
• New Product Launches: The acquisition of the ATM Collection in November 2024 expanded the company's product offerings in elevated basics apparel, enhancing its presence in the high-end fashion market.
• Future Outlook: The company plans to focus on expanding its international business, growing non-footwear categories, and enhancing its digital commerce operations. Strategic initiatives include investing in marketing, operational efficiency, and sustainability efforts.
• Operational Efficiency: The company is streamlining operations and managing costs to enhance profitability, with a disciplined approach to inventory management.
• Sustainability Focus: Steven Madden, Ltd. is committed to minimizing environmental impacts and maximizing positive impacts on people and communities, aligning with corporate social responsibility initiatives.

Strategic Initiatives

Steven Madden, Ltd. is executing key strategic initiatives aimed at driving growth and improving operational efficiency:

• Expansion in International Markets: The company is focusing on expanding its presence in the Americas, EMEA, and APAC regions.
• Growth in Non-Footwear Categories: Efforts are being made to grow categories such as handbags, accessories, and apparel.
• Direct-to-Consumer Business: The company is expanding its direct-to-consumer business with a focus on digital growth.
• Sustainability: Steven Madden, Ltd. aims to minimize environmental impacts and maximize positive impacts on people and communities.

Capital Management:

• The company maintains a strong liquidity position with cash, cash equivalents, and short-term investments totaling $203,408 as of December 31, 2024. It has no debt and a $150,000 asset-based revolving credit facility for additional liquidity.
• The company repurchased 2,090 shares of its common stock for approximately $90,153 and paid $61,039 in dividends in 2024. The Board approved a quarterly dividend of $0.21 per share payable on March 21, 2025.
• The company entered into a commitment letter for debt financing of up to $550,000 to fund the acquisition of Kurt Geiger.

Future Outlook:

• The company plans to continue focusing on delivering trend-right products, deepening consumer connections, and expanding its international business.
• It aims to enhance its digital commerce business and strengthen its core U.S. wholesale business.
• The company will also focus on efficiently managing inventory and expenses while making progress on corporate social responsibility initiatives.
• Future dividend payments will depend on earnings, financial condition, and other factors, and the company will continue to explore opportunities for capital investment.

Challenges and Risks

Steven Madden, Ltd. faces several challenges and risks in the competitive fashion industry:

• Competitive Industry: The company operates in a highly competitive fashion industry with low barriers to entry, facing intense competition from both established companies and new entrants. This competition could lead to pricing pressures and loss of market share.
• Foreign Manufacturing Reliance: The company is heavily reliant on foreign manufacturing, particularly in China, which exposes it to risks such as supply chain disruptions, geopolitical tensions, and changes in trade policies.
• Consumer Preferences: The fashion industry is subject to rapid changes in consumer preferences, and failure to anticipate these trends could harm sales and brand loyalty.
• Retail Industry Restructuring: The company faces risks from the consolidation and restructuring of the retail industry, which could reduce the number of stores carrying its products.
• Key Personnel: The loss of key personnel, including the founder and senior executives, could disrupt operations.
• Foreign Sourcing Risks: The company is exposed to foreign sourcing risks, including increased tariffs and trade restrictions, particularly with the recent U.S. tariffs on imports from China.
• Geopolitical Tensions: Geopolitical tensions, such as the Hamas-Israel and Russia-Ukraine conflicts, could adversely affect the company's operations and financial condition.
• Information Technology Risks: The company is vulnerable to information technology risks, including potential cyber-attacks and data breaches, which could harm its reputation and financial results.
• Macroeconomic Challenges: The company is navigating macroeconomic challenges such as persistent inflation, high interest rates, and recession concerns, which impact consumer spending and demand for its products.
• Foreign Exchange Rate Fluctuations: The company is exposed to foreign exchange rate fluctuations, which may affect the cost of products sourced overseas and the relative pricing of its products in different markets. While the company uses forward foreign exchange contracts to hedge against adverse changes, no strategy can completely eliminate foreign exchange risk.

SEC Filing: STEVEN MADDEN, LTD. [ SHOO ] - 10-K - Mar. 03, 2025