Welcome to the second quarter, 2026, Stephen Madden Limited Earnings Call and Webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Danielle McCoy, Vice President of Corporate Development and Investor Relations. Please go ahead.

Thanks, Debbie, and good morning, everyone. Thank you for joining our second quarter, 2026 earnings call and webcast. Before we begin, I'd like to remind you that our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to materially differ from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our press release issued earlier today and filings we made with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings call, if at all. Financial results discussed on today's call are on an adjusted basis, unless otherwise noted. A reconciliation to the most directly comparable GAAP financial measure or other associated disclosures are contained in our earnings release. Joining me on the call today are Ed Rosenfeld, Chairman and Chief Executive Officer, and Zane Mazzuzzi, Chief Financial Officer and Executive Vice President of Operations. With that, I'll turn the call over to Ed. Ed?

Okay. Thanks, Danielle. And good morning, everyone. And thank you for joining us to review Steve Madden's second quarter 2026 results. We delivered robust top and bottom line growth in the second quarter, reflecting the strength of our brands and our team's disciplined execution of our long-term strategy. Total revenue grew 19% in the quarter, or 11% excluding Kirk Geiger, and diluted EPS more than doubled from the second quarter last year. Our flagship brand, Steve Madden, was the highlight, continuing to gain momentum as consumers responded enthusiastically to the trend-bright assortments created by Steve and his design team. In women's footwear, we saw strong performance with dress shoes at various heel heights and outsized growth in the casual category. We capitalized on a variety of trends in style and materials, including split toes, jellies, hidden wedges, rhinestone mesh, ballet-inspired looks, thongs, and needle heels. Men's footwear also performed well across a range of categories, with particular strength in loafers. And in handbags, we returned to strong growth with totes, hobos, and crossbody styles that incorporated trending materials like straw, jelly, and denim. Our marketing team supported these assortments with integrated brand and product storytelling, including a deeper partnership with model Delilah Bell, who fronted our bait-and-switch summer campaign. Together, the combination of compelling product and strong market execution fueled a meaningful increase in brand heat. Global online searches for Steve Madden rose 71% in the quarter. Based on the strong momentum we are seeing, we have increased our forecast for Steve Madden brand revenue for the year and now expect a high single-digit increase compared to 2025. We also made meaningful progress in the quarter on our key growth initiatives for the Kirk Geiger London brand. In the U.S., building out Kirk Geiger's store base is an important part of our strategy to increase brand awareness, showcase the full brand experience, and drive profitable growth. We opened two full-price stores in premium malls in the quarter, Tyson's Corner and Dadeland, bringing us to a total of seven full-price stores in the U.S. The new stores are off to a good start, and the existing stores are performing well, driving strong four-wall profitability and delivering a 12% comp store sales gain in the second quarter. Six of the seven stores offer Kurt Geiger's unique one-of-a-kind personalization service, which enables customers to design their own Kensington bag and walk out with it in minutes. In the stores where it's available, the one-of-a-kind offering drove 17% of handbag sales, and we see this as a key differentiator for the brand that we will lean into going forward. Outside the U.S., we acquired a business in Spain and Portugal from our distributor in Q2, and will now operate that business in-house. We are in active discussions with a number of potential distribution and joint venture partners for Kirk Geiger around the world. For the year, we continued to expect mid-teens pro-former revenue growth in Kirk Iver. In Dolce Vita, we had an outstanding second quarter with strong growth across wholesale and DTC channels, driven by a compelling product assortment highlighted by jellies, ballet flats, Mary Janes, mid-heel dress shoes, and thongs. We also continued to gain momentum in handbags and make progress in international markets, including Canada, Mexico, and the U.K. Based on the momentum we are seeing, we have increased our forecast for Dolce Vita revenue for the year and now expect high single-digit to low double-digit growth. Overall, our lead brands are deepening their connections with consumers and gaining relevance in the marketplace, and each is poised for meaningful growth ahead. Based on the strong performance in the second quarter, we are raising our consolidated revenue and earnings outlook for 2026. And looking out further, we believe our powerful brands, proven business model, talented team, and sound strategy position us to deliver sustainable revenue and earnings growth over the long term. And now, I'll turn over to Zim to review our second quarter financial results in more detail and provide our updated outlook for 2026.

Thanks, Ed, and good morning, everyone. In the second quarter, consolidated revenue was $665.9 million, a 19.1% increase compared to the second quarter of 2025. Excluding Kurt Geiger, which we acquired on May 6, 2025, consolidated revenue increased 11.2%. Wholesale revenue was $407.5 million, up 13% compared to the second quarter of 2025. Excluding Kurt Geiger, our wholesale revenue increased 11.5%. Wholesale footwear revenue was $240 million, a 9% increase, or up 7.8%, excluding Kurt Geiger, driven by strong growth in the branded business, partially offset by a decline in private labels. Wholesale accessories and apparel, the revenue was $167.5 million, up 19.2% compared to the second quarter in the prior year, or up 17.5%, excluding Kurt Geiger, also driven by strong growth in the branded business, partially offset by a decline in private label. In our direct-to-consumer segment, revenue was $255.4 million, a 30.6% increase compared to the second quarter of 2025. Excluding Kurt Geiger, our DTC revenue increased 11.1%, with double-digit growth in both brick-and-mortar and e-commerce channels. The Madden brand global comp sales rose 9% in the quarter, including a 17% increase in the US and a 1% increase in international markets, which were impacted by the conflict in the Middle East. Excluding our business in the GCC, international comp sales increased by 4%. We ended the quarter with 382 company-operated brick-and-mortar stores, including 92 outlets, as well as eight e-commerce websites, and 164 company-operated concessions in international markets. Our licensing royalty income was $3 million in the quarter, compared to $2.9 million in the second quarter of 2025. Consolidated gross margin was 46.5% in the quarter, up from 41.9% in the second quarter of 2025, driven by significant increases in both wholesale and DTC channels. Wholesale gross margin was 35.2%, up from 30.9% in the second quarter of 2025, due to higher average selling prices, a smaller negative impact from tariffs, and a lower penetration of private label. Direct consumer gross margin was 64 percent, up from 61.3 percent in the prior year due to higher average selling prices, a reduction in promotional activity, and a small negative impact from tariffs. Operating expenses as a percentage of revenue were 39.8% in the quarter compared to 37.9% in the second quarter of 2025, primarily reflecting the inclusion of a full quarter of Geiger as well as higher incentive compensation. Operating income for the quarter was $44.5 million, or 6.7% of revenue, compared to $22.6 million, or 4% of revenue in the prior year. The effective tax rate for the quarter was 26.3%, compared to 25.6% in the second quarter of 2025. Finally, net income attributable to Steve Madden Limited for the quarter was $31.7 million, or 44 cents per diluted chair compared to 13.9 million or 20 cents per diluted chair in the second quarter of 2025. Turning to the balance sheet, our financial foundation remains strong. During the quarter, we received 92.1 million in refunds related to the reversal IEPA tariffs, which included $3.1 million in interest. We only have approximately $1 million in potential refunds still outstanding. We used the refunds to pay down debt, and as of June 30, 2026, we had $124.8 million in debt and $94.7 million in cash, cash equivalents, for a net debt of $30.1 million. Inventory at the end of the second quarter was $377.2 million, down 13.7% compared to $437 million in the prior year, driven by a 30% reduction in the Kirk Agro business. Our capex in the quarter was $8.5 million. We did not repurchase any shares in the open market during the second quarter, and we spent approximately $1 million on shares acquired through the net settlement of Employee Stock Awards. The company's board of directors approved a quarterly cash dividend of $0.21 per share. The dividend will be payable on September 24, 2026 to stockholders on record as of the close of business on September 11, 2026. Turning to our fiscal 2026 guidance, we are raising our revenue and diluted earnings per share outlook. We now expect revenue to increase 11 to 13 percent, up from our prior guidance of 10 percent to 12 percent, and diluted earnings per share to be in the range of $2.05 to $2.15, up from our prior guidance of $2 to $2.10. sense. Unlike last year, when tariff disruption resulted in an unusual back half, where the fourth quarter revenue and earnings exceeded third quarter levels, we expect a more typical cadence this year. Specifically, we expect Q3 to contribute more than Q4 to back half revenue and earnings. Now I would like to turn the call over to the operator for questions.

You will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Anna Andreeva with Piper Sandler. Please go ahead.

Hey, guys. Great. Thank you so much for taking the question. This is Noah on for Ana. Just wanted to follow up on the annual sales guide. It implies more modest expectations in the second half. Can you elaborate just on that given the momentum we're seeing across the portfolio? Any color on what you're seeing in direct to consumer quarter to date and how you're approaching back to school? And just as a follow-up, can you comment on how Nordstrom's anniversary sale is going across the portfolio as we've been seeing some sellouts.

Yeah, in terms of the top-line sales guide, I think it, you know, we, in an organic basis, we're looking for continued strong performance. I think that if you're looking at a slowdown on a consolidated basis, that's because we anniversary Kirk Geiger or distant anniversary in May. and so obviously the the uh the inorganic growth contribution uh goes away um in terms of uh dtc the momentum uh really continues into uh the quarter to date period and we're seeing trends uh similar to uh to what we saw in excuse me in q2 uh and the north stream anniversary has been a really positive story. Of course, we're having really a phenomenal event. I think every division in the company that participates in that sale is seeing increased sell-through versus the prior year. But the real standout has been that Steve Madden women's footwear business. If you recall, we had a very strong event last year. That's really when we started to see the inflection in that business and a significant improvement in sell-through. But even on top of the very strong or the very tough comparisons, we're seeing big increases in both the overall volume and sell-through percentage. So very pleased with the Nordstrom anniversary performance. Great.

Thanks for the caller.

The next question is from Paul Lejus with Citigroup. Please go ahead.

Hey, thanks, guys. I was curious if you can talk about how much of the full year raise was from the second quarter beat versus something that was changed in the second half. Maybe if you can talk about what has changed in your second half assumptions, if anything. and also would love to hear any more detail about how you're thinking on DTC versus wholesale in the second half and what you build into guidance for footwear versus apparel and accessories on the wholesale side.

Okay. Sure. So in terms of the second quarter and then the back half with respect to the raise in revenue and earnings, So second quarter on a revenue, from a revenue standpoint, came in pretty close to our internal expectations. So the revenue raise is really related more to what we're seeing going forward. However, we did exceed expectations, our internal expectations, on the gross margin line in Q2. And that was the primary driver of ABEAT versus our internal forecast in Q2. So one comment I'll make there, though, is that we were modeling that, you know, if you're looking at the street consensus numbers, you know, we were modeling the quarterly breakdown differently from the street. And so we were ahead of our internal forecast was ahead of the street for Q2. So while we did have a beat versus Q2, I think it was more like seven cents. We came in ahead of our expectation. And as you see, we're raising the full year by five. Keep in mind that we have incorporated an additional six cents of pressure from freight as the impact from the Iran conflict has gone on longer than we contemplated in the prior guidance.

Sorry.

Okay, so the next, yeah, next part was DTC versus wholesale. So for the full year, I'm just going to give you the full year numbers. So, I guess you'd probably like it without Kirk Iger just to make it cleaner. So, high single digits for DTC, excluding Kirk Iger. You know, with Kirk Iger, we're in the kind of low to mid-20s. And then wholesale, excluding Kirk Iger, we're looking at low single digits. and then with Kurt Kiger, mid-single digits.

And, Paul, just to add some color on the – sorry, I was just going to add some color on the freight senate, and Ed mentioned the conflict has gone on longer than contemplated. We actually successfully managed our ocean freight and the – reduced kind of the impact that would come from those EBS or emergency bunker surcharges for oil rising. But what we're seeing is higher air and air costs as we chase bestsellers and also as we chase product in international market due to the supply chain or the ocean supply chain being disrupted in international markets. We're also using more air to chase product, hence why we added the six pennies to the back house.

And then just one follow-up. Did anything change in how you're thinking about the private label business?

Not materially, I would say it got, I think our expectation for the year got modestly better, but it's still obviously a pressure point. We're looking at that business to be down mid to high teens for the year. And so just as additional color, you know, I mentioned that the wholesale business, excluding Geiger, is forecasted to be up low singles. But, obviously, that's being dragged down by that decline in private label. The branded business, we're looking at a high single-digit growth expectation for the year.

Thanks, guys.

Thank you.

The next question is from Janine Stichter with BTIG. Please go ahead.

Good morning. Can you elaborate a bit on what you're seeing on the branded side for the wholesale business? Just curious if you're – it sounds like you're now chasing if you're getting reorders in the quarter, and then what the conversations with your wholesale partners have been like for the back half, if there's any change there. Thank you.

Yeah, look, we feel very good about that business. Seen very strong performance. It was up – the branded business in wholesale in Q2 was up 20% year over year. And we continue to be very pleased with the sell-throughs. We're obviously getting reorders, and we've been chasing into strong sellers, and it's a positive story.

And for your full-year forecast, it does assume some deceleration. Does that continue to assume reorders in the holiday period, or is that kind of assuming just a basic business?

Well, keep in mind, we were still down in that business in Q1. So you're right. I guess we're not assuming 20% for the full year, but we started a little bit in the hole, and we're catching up. You know, I would say there's a, you know, we've obviously got a reorder assumption in for Q4. You know, is there upside to that potentially? But, you know, we're just, we got to get into the fall season and see how it goes before we build, you know, a lot of that activity into the forecast. do.

All right. Thanks so much.

Thank you.

The next question is from Marnie Shapiro with the Retail Tracker. Please go ahead.

Hey, guys. Congratulations. I just wanted to check one thing on the sixth sense related to freight. I'm assuming that includes freight from the factories and then distributions to stores. What about shipping costs to customers for your direct to consumer businesses, have you raised hurdles or changed prices, or are you just absorbing that excess cost?

We're seeing pressure in that as well, and that's also built in our guide, but we're absorbing that cost in the guide.

Okay, so no impact to the consumer. And then could you just talk a nice rebound in the bag business that's exciting. Are you seeing increased orders from your wholesale partners in the bag business now, or is it mostly your own and direct-to-consumer?

Yeah, we're seeing a big increase. So just for context, Steve Madden Bags in the quarter overall across all channels was up about 30%. It was up more than that in wholesale. Now, again, we had easy compares, and it's not going to remain at that level, But still, Steve Madden Bags for the year is on track to be a double-digit. So we feel good about the we're back on track there.

That's amazing. Can I just sneak in one more? There's so many more styles now that are what I would call kind of seasonless, like boots are selling all year. At the moment, suede is so trendy, so suede is selling all year. So does that give you guys a little bit more of a base of solid product that could live a little longer on the shelves it doesn't have to get marked down end of season or like how does that change your thinking i guess in how markdowns would happen because it feels to me like you could let some of this live longer but i don't know yeah i think that's right i mean i think that we've got uh we've got a number of products in the assortment here that that they can sell all year round and um and you know particularly if you look at like this this spring, you know, the category that declined the most was the most seasonal category of sandals.

And we saw increases in categories that, you know, that we can sell more all year round. So we like that. That being said, you know, we're still in the business of trend and the trend cycles move faster than ever today. So, you know, we're not going to suddenly become a company that It has a lot of styles that run for years and years and years.

Fantastic. I'll leave it for somebody else. Best of luck for back-to-school and fall.

Thanks, Marnie.

The next question is from Aubrey Tianello with PNB Proibus. Please go ahead.

Hi, good morning. This is Leah Young on for Aubrey. Congrats on a nice quarter. So my first question is going to be on gross margin. I want to ask about gross margin for the rest of the year, especially now that you are lapping the acquisition of Kurt Geiger a couple months ago? How should we think about the progression of gross margin in 3Q and 4Q?

I think for fall, when you look at the balance of the year, you have to remember that the KG mixed impact is pretty much going away in fall as we lapped the acquisition, which was in May of last year. And we also start to lap our pricing initiatives, which went into effect last fall. So now we start to lap those. And there is less of a mixed benefit from private label. And as we mentioned earlier, we're factoring in some pressure on the cost due to the conflict in the Middle East and on freight. And also, we're seeing cost pressures come in from our suppliers since the conflict has gone on longer than expected. And it's becoming a lot harder to push them off. So, we're absorbing some costs in our margin as well.

So, he gave you a lot of negative things there.

I just wanted to wrap that up by saying we still expect to see year-over-year improvement in gross margin each quarter. it's just it's not going to be as significant as it was in the first half yeah got it and then moving down to SG&A I want to ask about SG&A growth for the rest of the year should we still be modeling like low teams growth in 3Q and high singles in 4Q is there any change to that previous guide you provided last quarter and then can you talk about some of the focus area for the SG&A investment you're making this year. Thank you.

So, I think it's best to think about it as what we built in our guide is a 38.3% SG&A for the year. And when you factor in what the comments were made about a normalized sales flow between Q3 and Q4, that you'll see a lower percent as a percentage to sales in Q3 versus Q4. And from an SG&A perspective, as far as what we're doing, obviously we'll continue to watch everything that we can and anything that we can control. And the only change from the last time and our last guidance is we increased our investment in marketing, in brand marketing.

Got it. That's very clear. Thank you. I'll pass on.

The next question is from Dana Telsey with Telsey Advisory Group. Please go ahead. Hi, good morning.

Nice to see the progress. As you mentioned, part of the uptick in gross margin was the higher ASPs. What are you seeing in wholesale and DTC and ASPs? How are you thinking about it going forward? And then any update on tariffs and how you're planning for the back half? And lastly, just on the retail stores, Ed, any difference between full price and outlet store performance? Thank you.

Sure. So as we got into Q2, you know, we started layering on the price increases in the wake of tariffs. Last year in DTC, they started to hit in Q2. And then, you know, more of those rolled through through the balance of the year. We didn't really see any significant impact to wholesale until we got into the back half. So in Q2, you know, whereas we had been running, like in Q1, we were up AUR, up 17 in DTC. That slowed to up high singles as we started to lap some of the increases from a year ago. And I think that will still moderate again in Q3. Whereas wholesale, we were still up mid-teens in Q2 because we, you know, had not yet lapped any increases from the year before. But, again, that will also moderate as we go into the back half. I'll address the stores, and I'll turn over to Zine for the tariffs. The full-price stores continue to outperform Outlet, but we've seen a really nice recovery in Outlet. As you know, that's been a laggard for us. In the U.S., we were down one in Q1 in outlet, and that rebounded to up 12 in Q2. So a nice recovery there. Again, not as strong as the full-price stores in the U.S., which were up 16, or e-commerce in the U.S., which is up 20, but still a healthy number.

And data from a tariff perspective, top level for Q3 were basically in line with the announcements of the new 301 tariffs related to failure to, I guess, fight forced labor and anything that happened with Brazil. So those, as you know, went into effect Brazil on 7-22, and the main one that actually impacts us is the one, the 10 to 12.5 percent related to forced labor, and that went into effect on July 24th with some four-day grace period. So we're reflecting Q3 as such, and for Q4, we're still assuming 15% built into our number, so it's a little bit higher than the currently announced tariffs. But we also know that there are two more investigations that are pending, one for structural excess capacity and the other one for IP infringements, which targets just Vietnam. The first one, the excess capacity targets about 16 countries, and about five or six of them are countries that we source from. So that's why we have the 15%.

Got it. And just one last follow-up. On the wholesale channel, Ed, how's the difference in performance of whether it's department stores, discounters, off-price? What are you seeing in terms of the difference of performance, and what are you expecting go forward from private label? Thank you.

Yeah, I'd say anywhere we're selling – I mean, the branded business is quite strong, really, across the board. It's strongest in the first-tier channels, the department stores, the pure-play e-commerce retailers, the boutiques that we sell our latest fashion to. But we're doing pretty well with the brands across the board. Obviously, it's well-documented that private labels is a tougher part of the market for us right now in the mass channel, but we're hard at work at getting that straightened down.

Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Ed Rosenfeld for any closing remarks.

Well, thanks so much for joining us today. We hope you enjoy the rest of your summer, and we look forward to speaking with you on the third quarter call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.