Steve Madden (Nasdaq:SHOO), a leading designer and marketer of fashion footwear and accessories for women, men and children, today announced financial results for the first quarter ended March 31, 2014.
For the First Quarter 2014:
- Net sales increased 9.2% to $304.6 million compared to $278.9 million in the same period of 2013.
- Gross margin was 35.6% as compared to 36.8% in the same period last year due primarily to increased promotional activity in the retail segment.
- Operating expenses as a percentage of sales were 24.8% compared to 25.3% of sales in the same period of 2013 due to operating expense leverage on growing sales in the wholesale segment.
- Operating income totaled $36.0 million, or 11.8% of net sales, compared with operating income of $36.4 million, or 13.1% of net sales, in the same period of 2013.
- Net income increased to $23.6 million, or $0.36 per diluted share, compared to $23.4 million, or $0.35 per diluted share in the prior year's first quarter, adjusted for the three-for-two stock split effective October 2, 2013.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased to deliver solid overall financial results in the first quarter in a difficult environment. While a lack of fashion footwear trends and the soft overall retail climate continued to challenge our retail segment, our wholesale business was outstanding. Wholesale net sales increased 13.3%, led by strong growth across all Steve Madden brands. We also added a luxury brand to our portfolio in the quarter with our acquisition of majority ownership in the Brian Atwood® intellectual property. Looking ahead, we remain on track to meet our sales and earnings targets for the year.”
First Quarter 2014 Segment Results
Net sales from the wholesale business grew 13.3% to $265.0 million in the first quarter compared to $233.9 million in the first quarter of 2013, including double-digit percentage gains in the Steve Madden Women’s, Steve Madden Men’s and Madden Girl wholesale footwear divisions. Gross margin in the wholesale business was 32.6% compared to 32.3% in last year’s first quarter, driven by improvement in both branded and private label wholesale footwear margins. Retail net sales decreased 12.1% to $39.6 million compared to $45.1 million in the first quarter of the prior year. The increase in net sales resulting from the net opening of 13 new stores since the end of the first quarter last year was more than offset by a same store sales decrease of 17.2% for the first quarter of 2014. Increased promotional activity resulted in retail gross margin of 55.7% in the first quarter of 2014 compared to 60.3% in the first quarter of 2013.