NEW YORK (TheStreet) -- Shares of Steve Madden (SHOO) are higher by 2.32% to $33.07 in pre-market trading on Friday after the company announced it has completed the acquisition of the privately held Dolce Vita for $60.3 million.
Both Steve Madden and Dolce Vita design, market, and sell name-brand and private-label footwear.
The company expects the purchase to be two cents to three cents dilutive to earnings per share for fiscal 2014 and modestly accretive in fiscal 2015.EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE
Additionally, analysts at Sterne Agee raised their rating on Steve Madden to “buy” from “neutral” as a result of the Dolce Vita purchase.
Separately, TheStreet Ratings team rates MADDEN STEVEN LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MADDEN STEVEN LTD (SHOO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, growth in earnings per share, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $46.64 million or 20.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -21.73%.
- MADDEN STEVEN LTD's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MADDEN STEVEN LTD increased its bottom line by earning $1.98 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.98).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, MADDEN STEVEN LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 36.88% is the gross profit margin for MADDEN STEVEN LTD which we consider to be strong. Regardless of SHOO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SHOO's net profit margin of 9.36% compares favorably to the industry average.
- You can view the full analysis from the report here: SHOO Ratings Report