Forget recovery. Steven Madden Ltd. posted earnings and revenue results that surpassed its pre-pandemic performance.
The New York-based footwear company on Wednesday delivered its highest-ever quarterly sales and earnings in the firm’s history. For the third quarter, revenue increased 52.4% to $528.7 year-over-year and increased 5% compared with 2019. Net income was $66.6 million, or $0.82 per diluted share, up 22% from 2019.
Shares of Steve Madden jumped Wednesday following the results and were as high as 9% by late afternoon.
Even amid global supply chain headwinds, Steve Madden managed to pull off a quarter of record growth. According to analysts, its success will likely be even greater once delays and congestion are cleared.
“When supply chain headwinds subside, [the company’s] industry-leading speed to market, combined with Steve Madden’s chameleon-like ability to deliver trend-right product and develop a loyal following, will result in profitable revenue growth and further share gain,” wrote Williams Trading analyst Sam Poser in a note.
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Here are three factors setting up Steve Madden for long-term growth:
Expanding outside of footwear
Steve Madden is focused on expanding its business beyond footwear into other high-growth categories such as handbags and apparel.
In a call with investors, chairman and CEO Edward Rosenfeld said that the company’s handbag category is set to increase about 20% for the full year compared with 2019, including more than 100% growth in DTC channels. In apparel, the BB Dakota by Steve Madden brand is showing signs of strong sell-through for dresses, shirt jackets and vegan leather products across key wholesale accounts.
“Our handbag growth is pretty explosive,” said Rosenfeld. “It’s outpacing what we’re seeing in shoes, and we’re really excited about that momentum in handbags, particularly in direct-to-consumer channels.”
Strength in dress
As parties and social gatherings return, dress shoes are having a major comeback. According to Rosenfeld, penetration in the dress shoe category is higher than 2019 levels. And even as other brands continue to flood the dress category, Steve Madden has continued to perform well.
“Opened-up dress, closed-up dress, various heel heights, it’s just been a fantastic category for us,” Rosenfeld said, “and particularly in our direct-to-consumer channels, really a significant driver.”
However, when it comes to work dress shoes, Rosenfeld said the business is still not where it was before the pandemic.
Investments in marketing
Steve Madden is also making new investments in marketing to drive digital growth.
In October, the company launched “Maddenverse,” a brand campaign that features 3D avatars of female artists and influencers such as Normani, Sydney Sweeney, Nessa Berat, Justine Skye and Jordan Alexander. The campaign, which includes an augmented reality shoe try-on feature, is meant to connect with consumers and drive digital DTC growth.
According to Rosenfeld, the consumer response has been strong in terms of social media engagement and search interest, which has fueled sales.
“We’re excited about the new campaign and we feel really great about the response,” Rosenfeld said. “We just felt like, given the brand heat that we have in Steve Madden and this really, really strong product assortment and what we’re seeing in the brand overall, that now is the time to kind of throw gas on it and really step up with some exciting marketing.”
