Steven Madden Ltd. CEO Edward Rosenthal had nice information concerning the shoe agency’s prospects, and buyers cheered.
Shares of Madden spiked up 13.6 % to shut the buying and selling day Wednesday at $37.32 following Rosenthal’s remarks in a convention name after the corporate posted third quarter earnings outcomes.
“Through the interval in April and Could, when new tariffs on Chinese language imports reached 145 %, wholesale prospects reduce meaningfully on orders for the third quarter, and we shifted giant quantities of manufacturing out of China midstream, which led to cargo delays,” Rosenfeld stated. “These elements, along with the adverse influence to gross margin from the numerous improve in our landed prices, resulted in substantial strain on each income and earnings in Q3.” He additionally famous that the worth aspect of the wholesale channel have been those that “pulled again most importantly.”
Rosenfeld additionally spoke concerning the China tariff discount and its influence on sourcing. “It’s a welcome growth to see the discount within the tariff on China. The way in which that this tariff regime appears to be like proper now, the mathematics would inform us we might transfer fairly a bit again to China,” he stated, explaining that there’s a have to be cautious too.
“I believe that we’re going to watch out about that. We wish to stay diversified. We don’t wish to get again right into a place the place now we have 70-plus % of our sourcing coming from one nation,” Rosenfeld stated. “And so we’re going to proceed to attempt to be diversified, nevertheless it clearly does give us better flexibility to return to China, the place we have to get the appropriate deliveries and high quality, pricing, pace, et cetera.”
For the three months ended Sept. 30, internet revenue 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 Could.
The excellent news from Rosenfeld was that whereas the corporate will proceed to see adverse impacts from tariffs, “We imagine the worst is behind us.” He stated order patterns from wholesale prospects are “normalizing and we’re mitigating a bigger share of the gross margin strain by way of strategic pricing actions and sourcing initiatives.” The CEO added that underlying shopper demand “for our manufacturers and merchandise is powerful.”
Rosenfeld stated that the autumn product assortment for Steve Madden is resonating with customers, enabling the corporate to “outperform the competitors.” He cited boots as a standout led by informal tall shaft types, though the corporate can also be seeing sturdy efficiency in gown sneakers throughout varied heel heights, in addition to informal equivalent to loafers, Mary-Janes and mules. The CEO additionally famous how the corporate has been “actually happy up to now with the shortage of value resistance that we’ve seen, notably within the Madden model.”
However Rosenfeld additionally emphasised that the “actual takeaway on the worth will increase” is that when you’ve actual trend for product or new trend, the buyer is keen to pay. “The place you must be rather more cautious with value will increase is on the core and extra primary product,” he stated, including that the upper costs have been deliberate out, type by type, versus a blanket uptick evenly throughout the board for each merchandise.
He stated 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 stated.
The advertising group 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 tendencies for Steve Madden have accelerated meaningfully in latest months, Rosenfeld stated.
As for Geiger, he stated it has “sturdy momentum” as customers 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 have 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.Okay. by way of the Geiger platform. Rosenfeld additionally stated 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 shall be prolonged to different classes equivalent 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 good points for the complete 12 months 2025, regardless of the headwinds from tariffs,” he stated.
Waiting for vacation, Rosenfeld stated the corporate has been in a position to be much less promotional “due to the power of the product and the pattern.” He stated 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 aim to proceed to be much less promotional the place we are able to.”
