Three leading footwear companies reported quarterly financial results late last week for the three months ended September 30 that topped Wall Street estimates, with two of the three taking the news a step further and upping guidance for the current fiscal year.
Steve Madden (SHOO) reported a net sales increase of 5.5% to $413.5 million, driven primarily by a 15 percent increase in sales at its own retail stores to $56.4 million. Same-store sales rose by 11.2%. Net sales in the company’s wholesale business increased by 4 percent to $357 million.
Gross margin expanded 130 basis points to 36 percent compared to 34.7% in the same period last year. Wholesale gross margin increased 80 basis points to 32.1% due to improvement in the wholesale footwear segment. Retail gross margin increased by 150 basis points to 60.4% as a result of decreased promotional activity.
During the third quarter, the company opened two full price stores in Canada, one full price store in Mexico and one US outlet location. The company ended the quarter with 165 company-operated retail locations, including 120 full price stores, 37 outlets, four Internet stores and four joint venture locations in South Africa.
Net income rose by 9.4% to $42.9 million, or $0.70 per share, from $39.2 million, or $0.62 per share, in the prior year period.
However, based on lower-than-anticipated back half sales in its private label footwear business, Steve Madden has reduced its sales increase outlook for fiscal year 2015 to six percent over net sales in 2014 from prior expectations of a seven percent increase, and now expects earnings per share to be in the range of $1.85 to $1.95.