Steven Madden Ltd. CEO Edward Rosenfeld had nice information concerning the shoe agency’s prospects, and buyers cheered.
Shares of Madden spiked 13.6 % to shut the buying and selling day Wednesday at $37.32 following Rosenfeld’s remarks in a convention name after the corporate posted third quarter earnings outcomes.
“Through the interval in April and Might, when new tariffs on Chinese language imports reached 145 %, wholesale prospects in the reduction of meaningfully on orders for the third quarter, and we shifted giant quantities of manufacturing out of China midstream, which led to cargo delays,” Rosenfeld mentioned. “These elements, along with the detrimental impression to gross margin from the numerous improve in our landed prices, resulted in substantial stress on each income and earnings in Q3.” He additionally famous that the worth aspect of the wholesale channel had been those that “pulled again most importantly.”
Rosenfeld additionally spoke concerning the China tariff discount and its impression on sourcing. “It’s a welcome growth to see the discount within the tariff on China. The best way that this tariff regime seems to be proper now, the mathematics would inform us we’d transfer fairly a bit again to China,” he mentioned, explaining that there’s a should be cautious too.
“I feel that we’re going to watch out about that. We need to stay diversified. We don’t need to get again right into a place the place now we have 70-plus % of our sourcing coming from one nation,” Rosenfeld mentioned. “And so we’re going to proceed to attempt to be diversified, however it clearly does give us higher flexibility to return to China, the place we have to get the suitable deliveries and high quality, pricing, pace, et cetera.”
For the three months ended Sept. 30, web earnings was down 62.9 % to $20.5 million, or 29 cents a diluted share, on complete income that rose 6.9 % to $667.9 million. Income for the wholesale enterprise fell 10.7 % to $442.7 million. Excluding the lately acquired Kurt Geiger model, wholesale income was down 19.0 %. Wholesale footwear income decreased 10.9 %, or 16.7 % when excluding the Kurt Geiger model. Wholesale equipment/attire income decreased 10.3 %, or 22.5 % excluding Kurt Geiger. The corporate closed on its $360 million deal for the Kurt Geiger London model in Might.
The excellent news from Rosenfeld was that whereas the corporate will proceed to see detrimental impacts from tariffs, “We consider the worst is behind us.” He mentioned order patterns from wholesale prospects are “normalizing and we’re mitigating a bigger proportion of the gross margin stress by way of strategic pricing actions and sourcing initiatives.” The CEO added that underlying shopper demand “for our manufacturers and merchandise is robust.”
Rosenfeld mentioned the autumn product assortment for Steve Madden is resonating with shoppers, enabling the corporate to “outperform the competitors.” He cited boots as a standout led by informal tall shaft types, though the corporate can be seeing robust efficiency in costume footwear throughout varied heel heights, in addition to informal akin to loafers, Mary-Janes and mules. The CEO additionally famous how the corporate has been “actually happy to date with the shortage of worth resistance that we’ve seen, notably within the Madden model.”
However Rosenfeld additionally emphasised that the “actual takeaway on the value will increase” is that when you’ve gotten actual style for product or new style, the patron is prepared to pay. “The place you need to be way more cautious with worth will increase is on the core and extra fundamental product,” he mentioned, including that the upper costs had been deliberate out, fashion by fashion, versus a blanket uptick evenly throughout the board for each merchandise.
He mentioned that some objects had stock-outs, however good early reads on among the product enabled the agency to fill some reorders. And since a “good portion” of the product was coming from Mexico, “that’s the place now we have lots of pace and we are able to get again into reorders in 30 days,” the CEO mentioned.
The advertising staff has elevated funding throughout YouTube, TikTok, Snapchat and Pinterest, serving to to drive will increase in consciousness and conversion with key Gen Z and Millennial prospects. “Because of this, each wholesale sell-through and DTC (direct-to-consumer) gross sales traits for Steve Madden have accelerated meaningfully in latest months, Rosenfeld mentioned.
As for Geiger, he mentioned it has “robust momentum” as shoppers proceed to answer its designs and “eye-catching advertising,” together with campaigns that includes actress Emily Ratajkowski. He famous that the model is over 70 % DTC.
Comparable gross sales for the model had been up mid-teens for the quarter, and the corporate is making progress on income methods, together with increasing Geiger in worldwide markets by way of the Steve Madden community, in addition to rising Steve Madden within the U.Ok. by way of the Geiger platform. Rosenfeld additionally mentioned there are plans to open a handful of shops within the U.S. in 2026 for the Geiger model, including that there’s alternative for development in each brick-and-mortar doorways and in wholesale gross sales.
In company-owned manufacturers, the CEO cited success within the U.S. footwear enterprise for Dolce Vita, which is increasing in worldwide markets and will probably be prolonged to different classes akin to purses. The corporate is engaged on renewed cultural relevance for the Betsey Johnson model, in addition to differentiated merchandise assortments. “Each Dolce Vita and Betsey Johnson are on observe to ship income beneficial properties for the complete 12 months 2025, regardless of the headwinds from tariffs,” he mentioned.
Looking forward to vacation, Rosenfeld mentioned the corporate has been in a position to be much less promotional “due to the energy of the product and the pattern.” He mentioned that whereas the corporate wants to stay aggressive into the autumn and coronary heart of the vacation season when everyone’s promotional, “we’re going to try to proceed to be much less promotional the place we are able to.”
