Steve Madden Posts Mixed Quarter, Expects ‘Bumpy’ Road Ahead
As it continues to navigate the coronavirus pandemic, Steven Madden Ltd. is expecting an uneven road to recovery ahead.
The fashion footwear retailer today posted mixed second-quarter financial results: It logged an adjusted net loss of $14.7 million, or a loss of 19 cents per diluted share, compared with the prior year’s net income of $39.5 million, or earnings of 47 cents per diluted share. Revenues for the period ended June 30 declined 68.2% to $142.8 million. Market watchers had anticipated a loss of 27 cents per share and sales of $183.5 million.
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“We know the path forward will continue to be bumpy in the near-term,” chairman and CEO Edward Rosenfeld said in a statement, “but we are confident that our strengths — powerful brands, a fortress balance sheet, a proven business model and most of all, our talented and dedicated employees — will enable us to successfully navigate this crisis and return to profitable growth once conditions normalize.”
Sales for Steve Madden’s wholesale business fell 72.5% to $100 million, including a 72.8% dip in footwear and a 71.5% drop in accessories and apparel. This decrease, reported the company, was driven by “significant” order cancellations.
Meanwhile, retail revenues — impacted by widespread closures in the chain’s brick-and-mortar fleet — slid 49.2% to $41.4 million. This figure was partially offset by a solid performance in its e-commerce business, including an 88% revenue growth on SteveMadden.com in the second quarter.
At the end of the three months, Steve Madden operated 225 locations — eight of which are online — as well as 17 concessions in international markets.
“The past few months have been challenging for all of us due to the COVID-19 pandemic,” Rosenfeld added. “We have prioritized the health and safety of our employees, customers and communities while also moving quickly to adapt to the current retail environment, mitigate the impact to our business, preserve liquidity and enhance financial flexibility.”
In an effort to bolster liquidity, Steve Madden moved to suspend share repurchases and halt its quarterly cash dividend. Like many other companies, it implemented furloughs and pay cuts, as well as reduced nonessential operating expenses, capital expenditures and planned inventory receipts.
Last week, the retailer also entered into a new $150 million, five-year asset-based revolving credit facility. It ended the quarter with $356.9 million in cash, equivalents and marketable securities.
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