Jefferies Reiterates a Buy Rating on Steven MaddenBy Austin Angelo
“SHOO delivered solid performance in wholesale (excl. impact of anniversarying Madden Girl collection LY) and drove impressive GM expansion for 3Q EPS of $0.74, beating guidance and cons. We are esp. encouraged with performance given difficult wholesale backdrop. Reiterate Buy, $40 PT. Investment thesis: We continue to like the SHOO story given: (a) continued performance at core brands, (b) fast inventory turn model that should hum once wholesale further loosens, (c) intl growth, (d) op margins reverting back toward mid-teens level, and (e) company is poised to benefit from strong footwear trends at retail. Core brands at wholesale performing well. Mgmt. underscored strength in Steve Madden and Dolce Vita brands, which led to wholesale revs beating cons. Steve Madden saw strong sell-through in Spring continue into Fall (strong trends in sock booties and velvet) with key retail customers shifting more open-to-buy dollars to the brand. Dolce Vita also performed well, driven by strong trends in ankle booties and over-the-knee, with op margins climbing to 15%. Importantly, these brands (and inventory discipline) contributed to 180 bps of GM expansion to 37.8%, ahead of cons. at 37.1%. This improvement, aided by on- trend assortments (higher initial market-ups) and brand strength (reduce close-outs and markdown allowances), is encouraging considering how clean inv. are (down 9.5% y/y). Retail pulling its own as well. SSS of 1.3% fell short of cons., but did mark the 7th consecutive quarterly increase and was going up against a difficult compare of 11.2%.”
According to TipRanks.com, Konik is a 1-star analyst with an average return of -1.8% and a 41.1% success rate. Konik covers the Services sector, focusing on stocks such as Eros International, Abercrombie Fitch, and ClubCorp Holdings.
Currently, the analyst consensus on Steven Madden is Strong Buy and the average price target is $42, representing a 19.0% upside.
In a report issued on November 1, Canaccord Genuity also reiterated a Buy rating on the stock with a $40 price target.
Based on Steven Madden’s latest earnings report from June 30, the company posted quarterly revenue of $325.4M and quarterly net profit of $24.67M. In comparison, last year the company earned revenue of $413.5M and had a net profit of $42.89M.
Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is neutral on the stock. Most recently, in June 2016, Rose Peabody Lynch, a Director at SHOO sold 1,722 shares for a total of $59,133.
Steven Madden Ltd. designs, markets and sells fashion-forward footwear for women, men, and children. The company operates its business through following segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost and Licensing. The Wholesale Footwear segment is comprised of the following brands: Steve Madden Women’s, Madden Girl, Steve Madden Men’s, Dolce Vita, DV by Dolce Vita, Mad Love, Steven by Steve Madden, Report, Report Signature, Superga, Betsey Johnson, Steve Madden Kids, FREEBIRD by Steven, Stevies, Wild Pair, Brian Atwood, B Brian Atwood and includes the International business and certain private label footwear business. The Wholesale Accessories segment designs, sources and markets name brands including: Madden, Steven by Steve Madden, Madden Girl, Betsey Johnson, Betseyville, Big Buddha and private label fashion handbags and accessories to department stores, mass merchants, value priced retailers, online retailers and specialty stores throughout the United States and Canada. The Retail segment owns and operates retail stores, including Steve madden full price stores, Steve Madden outlet stores, Steven store, Superga and e-commerce websites for Steve Madden, Superga, Betsey Johnson, and Dolce Vita. The First Cost segment earns commissions for serving as buying agent for footwear products under private labels for many of the large mass-market merchandisers, shoe chains, and other mid-tier retailers. The Licensing segment engages in the licensing of the Steve Madden and Steven by Steve Madden trademarks for use in connection with the manufacture, marketing, and sale of sunglasses, eyewear, outerwear, bedding, hosiery and women’s fashion apparel, jewelry, watches, and luggage. The company was founded by Steven L. Madden on July 9, 1990 and is headquartered in Long Island City, NY.