Steven Madden, Ltd 10-Q for FY2024 Q1

Steven Madden, Ltd. (SHOO)

10-Q 2024-05-02 For: 2024-03-31

Added on April 04, 2026

About this 10-Q

Steven Madden, Ltd filed this 10-Q on May 2, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $552.38M; up 19.1% from $463.83M a year earlier
Net income: $44.56M; up 21.1% from net income of $36.79M a year earlier
Diluted EPS: $0.60; up 25.0% from $0.48 a year earlier

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Delaware						13-3588231
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	SHOO	The NASDAQ Stock Market LLC


PART I – FINANCIAL INFORMATION

ITEM 1.	Condensed Consolidated Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Income	2

	Condensed Consolidated Statements of Comprehensive Income	3

	Condensed Consolidated Statements of Changes i n Stockholder' Equity	4

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements - Unaudited	6

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30

ITEM 4.	Controls and Procedures	32

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	33

ITEM 1A.	Risk Factors	33

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

ITEM 5.	Other Information	34

ITEM 6.	Exhibits	35

	Signatures	36


	March 31, 2024		December 31, 2023		March 31, 2023
(in thousands, except par value)	(unaudited)				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	131,501	$	204,640	$	209,979
Short-term investments	11,556		15,173		13,740
Accounts receivable, net of allowances of $4,874, $4,828 and $7,208	44,457		40,246		46,138
Factor accounts receivable	380,613		320,723		283,893
Inventories	201,960		228,990		179,937
Prepaid expenses and other current assets	28,324		29,009		22,267
Income tax receivable and prepaid income taxes	8,883		16,051		12,079

Total current assets	807,294		854,832		768,033

Note receivable – related party	—		—		301
Property and equipment, net	47,490		47,199		41,519
Operating lease right-of-use asset	127,464		122,783		112,501
Deposits and other	15,991		16,250		11,750

Deferred tax assets	609		609		1,963
Goodwill	180,869		180,003		168,228
Intangibles, net	124,436		126,267		100,826
Total Assets	$	1,304,153	$	1,347,943	$	1,205,121
LIABILITIES
Current liabilities:
Accounts payable	$	170,154	$	161,140	$	101,678
Accrued expenses	109,173		154,751		112,395

Operating leases – current portion	40,020		40,342		33,977
Income taxes payable	4,474		5,998		3,934
Contingent payment liability – current portion	3,738		3,325		1,153
Accrued incentive compensation	4,953		12,068		4,105
Total current liabilities	332,512		377,624		257,242
Contingent payment liability – long-term portion	11,212		9,975		—

Operating leases – long-term portion	102,637		98,536		95,797
Deferred tax liabilities	9,016		8,606		3,923
Other liabilities	5,169		5,170		10,461
Total Liabilities	460,546		499,911		367,423
Commitments, contingencies and other (Note M)
STOCKHOLDERS’ EQUITY
Preferred stock – $0.0001 par value, 5,000 shares authorized; none issued; Series A Junior Participating preferred stock – $0.0001 par value, 60 shares authorized; none issued	—		—		—
Common stock – $0.0001 par value, 245,000 shares authorized,136,996, 136,471 and 134,746 shares issued, 73,324, 73,681 and 76,011 shares outstanding	7		7		8
Additional paid-in capital	592,115		586,155		526,844
Retained earnings	1,708,018		1,679,500		1,591,814
Accumulated other comprehensive loss	(30,549)		(29,046)		(34,863)
Treasury stock – 63,672, 62,790 and 58,735 shares at cost	(1,444,355)		(1,407,018)		(1,262,761)
Total Steven Madden, Ltd. stockholders’ equity	825,236		829,598		821,042
Noncontrolling interest	18,371		18,434		16,656
Total stockholders’ equity	843,607		848,032		837,698
Total Liabilities and Stockholders’ Equity	$	1,304,153	$	1,347,943	$	1,205,121


	Three Months Ended March 31,
(in thousands, except per share data)	2024		2023
Net sales	$	550,567	$	461,737
Licensing fee income	1,814		2,097
Total revenue	552,381		463,834
Cost of sales (exclusive of depreciation and amortization)	327,566		268,742
Gross profit	224,815		195,092
Operating expenses	166,369		148,581

Impairment of intangible	1,700		—
Income from operations	56,746		46,511
Interest and other income – net	1,555		2,020
Income before provision for income taxes	58,301		48,531
Provision for income taxes	13,739		11,745
Net income	44,562		36,786
Less: net income attributable to noncontrolling interest	628		56
Net income attributable to Steven Madden, Ltd.	$	43,934	$	36,730


Basic net income per share	$	0.61	$	0.49

Diluted net income per share	$	0.60	$	0.48

Basic weighted average common shares outstanding	72,292		74,498
Effect of dilutive securities – options/restricted stock	573		1,357
Diluted weighted average common shares outstanding	72,865		75,855

Cash dividends declared per common share	$	0.21	$	0.21


	Three Months Ended March 31, 2024
(in thousands)	Pre-tax amounts		Tax expense		After-tax amounts
Net income					$	44,562
Other comprehensive income/(loss):
Foreign currency translation adjustment	$	(3,426)	$	—	(3,426)
Income on cash flow hedging derivatives	1,687		(455)		1,232

Total other comprehensive loss	$	(1,739)	$	(455)	(2,194)

Comprehensive income					42,368
Less: comprehensive loss attributable to noncontrolling interests					(63)
Comprehensive income attributable to Steven Madden, Ltd.					$	42,431

	Three Months Ended March 31, 2023
(in thousands)	Pre-tax amounts		Tax benefit		After-tax amounts
Net income					$	36,786
Other comprehensive income/(loss):
Foreign currency translation adjustment	$	939	$	—	939
Loss on cash flow hedging derivatives	(463)		174		(289)

Total other comprehensive income	$	476	$	174	650

Comprehensive income					37,436
Less: comprehensive loss attributable to noncontrolling interests					(140)
Comprehensive income attributable to Steven Madden, Ltd.					$	37,576


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Non-Controlling Interest		Total Stockholders' Equity
(in thousands except per share data)	Shares	Amount								Shares	Amount
Balance - December 31, 2023	73,681	$	7	$	586,155	$	1,679,500	$	(29,046)	62,790	$	(1,407,018)	$	18,434	$	848,032
Common stock repurchased and net settlements of restricted stock awards	(882)	—		—		—		—		882	(37,337)		—		(37,337)
Exercise and net settlement of stock options	9	—		222		—		—		—	—		—		222
Issuance of restricted stock, net of forfeitures	516	—		—		—		—		—	—		—		—
Stock-based compensation	—	—		5,738		—		—		—	—		—		5,738
Foreign currency translation adjustment	—	—		—		—		(2,735)		—	—		(691)		(3,426)
Cash flow hedge (net of tax expense of $455)	—	—		—		—		1,232		—	—		—		1,232
Dividends on common stock ($0.21 per share)	—	—		—		(15,416)		—		—	—		—		(15,416)


Net income	—	—		—		43,934		—		—	—		628		44,562
Balance - March 31, 2024	73,324	$	7	$	592,115	$	1,708,018	$	(30,549)	63,672	$	(1,444,355)	$	18,371	$	843,607


(in thousands)	Fair Value
Accounts receivable	$	1,394
Inventories	22,718
Factor accounts receivable	51,940
Operating lease right-of-use asset	2,902
Prepaid expenses and other current assets	172
Property and equipment, net	248
Intangibles, net(1)	32,950
Accounts payable	(31,857)
Accrued expenses	(1,699)
Operating leases - current portion	(474)
Operating leases - long-term portion	(2,703)
Total fair value excluding goodwill	$	75,591
Goodwill	10,937
Net assets acquired	$	86,528


	March 31, 2024								December 31, 2023
	Fair value		Level 1		Level 2		Level 3		Fair value		Level 1		Level 2		Level 3
Assets:



Forward contracts	1,242		—		1,242		—		708		—		708		—
Total assets	$	1,242	$	—	$	1,242	$	—	$	708	$	—	$	708	$	—
Liabilities:
Contingent consideration(1)(2)	$	14,950	$	—	$	—	$	14,950	$	13,300	$	—	$	—	$	13,300
Forward contracts	792		—		792		—		1,904		—		1,904		—
Total liabilities	$	15,742	$	—	$	792	$	14,950	$	15,204	$	—	$	1,904	$	13,300


	Balance at January 1, 2024		Acquisitions		Adjustments(1)		Balance at March 31, 2024(2)
2024
Liabilities:
Contingent consideration	$	13,300	$	—	$	1,650	$	14,950

2023	Balance at January 1, 2023		Acquisitions		Adjustments(1)		Balance at December 31, 2023

Liabilities:
Contingent consideration	$	—	$	13,300	$	—	$	13,300


	Classification on the Balance Sheet	March 31, 2024			December 31, 2023
Assets
Noncurrent(1)	Operating lease right-of-use asset	$	127,464		$	122,783

Liabilities
Current	Operating leases – current portion	$	40,020		$	40,342
Noncurrent	Operating leases – long-term portion	102,637			98,536
Total operating lease liabilities		$	142,657		$	138,878

Weighted-average remaining lease term		4.5 years			4.5 years
Weighted-average discount rate		5.2		%	5.1		%


2024 (remaining nine months)	$	35,155
2025	41,478
2026	31,779
2027	20,280
2028	13,351
Thereafter	18,530
Total minimum lease payments	160,573
Less: interest	17,916
Total lease liabilities	$	142,657


Common stock authorized			11,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled awards			(7,970)
Common stock available for grant of stock-based awards as of March 31, 2024			3,030


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2024	1,119	$	35.62
Granted	8	42.00
Exercised	(9)	26.10

Outstanding at March 31, 2024	1,118	$	35.73	3.0 years	$	7,776
Exercisable at March 31, 2024	1,000	$	35.75	2.8 years	$	6,943


	Wholesale						Net Carrying Amount
	Footwear		Accessories/ Apparel		Direct-to-Consumer
Balance at January 1, 2024	$	90,663	$	73,625	$	15,715	$	180,003
Acquisitions	—		641		—		641

Translation	141		—		84		225
Balance at March 31, 2024	$	90,804	$	74,266	$	15,799	$	180,869


	Three Months Ended March 31,
	2024	2023
Volatility	47.4%	47.7%
Risk free interest rate	4.0%	4.0%
Expected life in years	4.0	5.0
Dividend yield	2.0%	2.6%
Weighted average fair value	$15.69	$11.86


	2024			2023
	Number of Shares	Weighted Average Fair Value at Grant Date		Number of Shares	Weighted Average Fair Value at Grant Date
Outstanding at January 1,	1,278	$	35.44	2,111	$	28.45
Granted	534	42.14		284	33.69
Vested	(237)	34.90		(229)	34.58
Forfeited	(18)	36.76		(5)	38.15
Outstanding at March 31,	1,557	$	37.78	2,161	$	28.47



	Estimated Lives	Cost Basis(2)		Accumulated Amortization		Impairment & Other(1)(3)		Net Carrying Amount
Trademarks	10 - 20 years	$	32,195	$	(16,263)	$	(2,743)	$	13,189
Customer relationships	10–20 years	62,580		(27,926)		(1,545)		33,109


Re-acquired rights	2 years	1,450		(66)		—		1,384

		96,225		(44,255)		(4,288)		47,682
Re-acquired right	indefinite	35,200		—		(9,357)		25,843
Trademarks	indefinite	58,833		—		(7,922)		50,911
		$	190,258	$	(44,255)	$	(21,567)	$	124,436



	Estimated Lives	Cost Basis(1)		Accumulated Amortization		Impairment & Other(2)(3)		Net Carrying Amount
Trademarks	20 years	$	27,745	$	(16,263)	$	(2,545)	$	8,937
Customer relationships	10–20 years	62,580		(27,267)		(1,382)		33,931




		90,325		(43,530)		(3,927)		42,868
Re-acquired right	indefinite	35,200		—		(8,862)		26,338
Trademarks	indefinite	63,283		—		(6,222)		57,061
		$	188,808	$	(43,530)	$	(19,011)	$	126,267


2024 (remaining nine months)	$	3,465
2025	4,619
2026	3,855
2027	3,607
2028	3,571
Thereafter	28,565
Total	$	47,682


As of and for the three months ended,	Wholesale Footwear		Wholesale Accessories/Apparel		Total Wholesale		Direct-to-Consumer		Licensing		Corporate(1)		Consolidated
March 31, 2024
Total revenue	$	295,660	$	142,576	$	438,236	$	112,331	$	1,814	$	—	$	552,381
Gross profit	108,297		45,150		153,447		69,554		1,814		—		224,815
Income/(loss) from operations	$	63,115	$	18,171	$	81,286	$	(2,225)	$	1,314	$	(23,629)	$	56,746
Capital expenditures	$	897	$	94	$	991	$	2,211	$	—	$	777	$	3,979
March 31, 2023
Total revenue	$	282,321	$	79,816	$	362,137	$	99,600	$	2,097	$	—	$	463,834
Gross profit	107,522		26,514		134,036		58,959		2,097		—		195,092
Income/(loss) from operations	$	62,056	$	9,438	$	71,494	$	(4,247)	$	1,818	$	(22,554)	$	46,511
Capital expenditures	$	137	$	60	$	197	$	1,955	$	—	$	1,639	$	3,791


	Three Months Ended March 31,
(in thousands, except for number of stores)	2024				2023
CONSOLIDATED:
Net sales	$	550,567	99.7	%	$	461,737	99.5	%
Licensing fee income	1,814		0.3	%	2,097		0.5	%
Total revenue	552,381		100.0	%	463,834		100.0	%
Cost of sales (exclusive of depreciation and amortization)	327,566		59.3	%	268,742		57.9	%
Gross profit	224,815		40.7	%	195,092		42.1	%
Operating expenses	166,369		30.1	%	148,581		32.0	%

Impairment of intangible	1,700		0.3	%	—		—	%
Income from operations	56,746		10.3	%	46,511		10.0	%
Interest and other income – net	1,555		0.3	%	2,020		0.4	%
Income before provision for income taxes	$	58,301	10.6	%	$	48,531	10.5	%
Net income attributable to Steven Madden, Ltd.	$	43,934	8.0	%	$	36,730	7.9	%

BY SEGMENT:
WHOLESALE FOOTWEAR SEGMENT:
Total Revenue	$	295,660	100.0	%	$	282,321	100.0	%
Cost of sales (exclusive of depreciation and amortization)	187,363		63.4	%	174,799		61.9	%
Gross profit	108,297		36.6	%	107,522		38.1	%
Operating expenses	45,182		15.3	%	45,466		16.1	%

Income from operations	$	63,115	21.3	%	$	62,056	22.0	%

WHOLESALE ACCESSORIES/APPAREL SEGMENT:
Total Revenue	$	142,576	100.0	%	$	79,816	100.0	%
Cost of sales (exclusive of depreciation and amortization)	97,426		68.3	%	53,302		66.8	%
Gross profit	45,150		31.7	%	26,514		33.2	%
Operating expenses	26,979		18.9	%	17,076		21.4	%


Income from operations	$	18,171	12.7	%	$	9,438	11.8	%

DIRECT-TO-CONSUMER SEGMENT:
Total Revenue	$	112,331	100.0	%	$	99,600	100.0	%
Cost of sales (exclusive of depreciation and amortization)	42,777		38.1	%	40,641		40.8	%
Gross profit	69,554		61.9	%	58,959		59.2	%
Operating expenses	70,079		62.4	%	63,206		63.5	%

Impairment of intangible	1,700		1.5	%	—		—	%
(Loss) from operations	$	(2,225)	(2.0	%)	$	(4,247)	(4.3	%)
Number of stores (excludes concessions)	258				240

LICENSING SEGMENT:
Licensing income	$	1,814	100.0	%	$	2,097	100.0	%
Gross profit	1,814		100.0	%	2,097		100.0	%
Operating expenses	500		27.6	%	279		13.3	%
Income from operations	$	1,314	72.4	%	$	1,818	86.7	%

Corporate:
Operating expenses	$	(23,629)	—	%	$	(22,554)	—	%
Loss from operations	$	(23,629)	—	%	$	(22,554)	—	%


	Payment due by period
Contractual Obligations	Total		Remainder of 2024		2025-2026		2027-2028		2029 and after
Operating lease obligations(1)	$	160,573	$	35,155	$	73,257	$	33,631	$	18,530
Purchase obligations	264,721		264,515		206		—		—

Future minimum royalty and advertising payments(2)	16,500		4,500		6,000		6,000		—
Transition tax	4,884		4,884		—		—		—
Total	$	446,678	$	309,054	$	79,463	$	39,631	$	18,530


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
1/1/2024 - 1/31/2024	22	$	41.59	—	$	175,462
2/1/2024 - 2/29/2024	16	$	43.17	—	$	175,462
3/1/2024 - 3/31/2024	845	$	42.31	773	$	142,818
Total	883	$	42.31	773


10.1			Form of Restricted Stock Agreement (Steven Madden)#†
10.2			Form of Restricted Stock Agreement (Edward Rosenfeld) #†
10.3			E mployment Agreement, dated as of February 27, 2024, between the Company and Edward R. Rosenfeld (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023)#
10.4			Employment Agreement, dated as of January 24, 2024, between the Company and Lisa Keith (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023)#
31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †*
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †*
101			The following materials from Steven Madden, Ltd.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements, and (vii) information set forth under Part II, Item 5, tagged as blocks of text*
104			Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL) with applicable taxonomy extension information contained in Exhibit 101*



†			Filed herewith
#			Indicates management contract or compensatory plan or arrangement.
*			This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.


STEVEN MADDEN, LTD.

/s/ EDWARD R. ROSENFELD
Edward R. Rosenfeld
Chairman and Chief Executive Officer

/s/ ZINE MAZOUZI
Zine Mazouzi
Chief Financial Officer and Executive Vice President of Operations


Vesting Date			Number of Shares Vesting
01/02/2025			170,213
01/02/2026			16,549
01/02/2027			16,549
01/02/2028			16,548
01/02/2029			16,548


Vesting Date			Number of Shares Vesting
2/28/2025			20% of the Award
2/28/2026			20% of the Award
2/28/2027			20% of the Award
2/28/2028			20% of the Award
2/28/2029			20% of the Award