Steve Madden interim CEO pleased with 2008 consumer response
Steven Madden, Ltd. (Nasdaq:SHOO) interim CEO Ed Rosenfeld said the apparel and shoe maker is encouraged by the response from consumer’s this year. Rosenfeld made the comments during a Thursday morning conference call.
“We are pleased with the product that is being turned out by Steve and our design teams,” Rosenfeld said. “We continue to position our business to achieve long-term growth.”
Rosenfeld said the firm’s distribution agreement in Asia is off to a “solid start this year.” The partner has opened new stores in Hong Kong and Tokyo and plans to open a new location in Beijing by the middle of June, he said.
“We continue to believe there is tremendous growth potential for our brand in this market, as well as other international markets,” Rosenfeld said.
The company also plans to open two new stores in Manhattan and expand its e-business, the interim chief executive said.
For 2008, Rosenfeld said Steven Madden is maintaining its full-year earnings guidance of between $1.55 and $1.65 per share, excluding one-time charges in the first quarter related to the former CEO’s resignation. Including the charge impact, Steven Madden expects 2008 earnings ranging from $1.39 to $1.49. The firm also expects sales to be flat or an increase of 2%, which would mean a range of $431.1 million to $439.7 million. Wall Street analysts anticipate earnings of $1.51 per share on $430.6 million in sales.
Early Thursday, the Long Island City, N.Y.-based company announced first-quarter net sales of $100.5 million, down 6% from $106.7 million a year earlier. The sales decline beat Wall Street’s expectation of $98.9 million in sales.
“Our performance in the first quarter continued to reflect the effects of weak consumer spending that we experienced in the second half of last year,” Rosenfeld said. “However, given the challenging economic environment, we are pleased with the sell-through of our merchandise and the general strength of our brands. Further, we did see some improvement in our results compared to the second half of 2007.”
Rosenfeld said the firm feels “very good” about its current merchandise and the new designs that will be released over the next months.
During the three months ended March 31, Steven Madden’s profit plummeted 78% to $2.1 million, or $0.10 per share, versus $9.5 million, or $0.43 per share, a year ago. The plunging profit missed Wall Street analysts’ anticipation of $0.29 per share.
The company’s first-quarter profit was hurt by a hefty $4.9 million charge resulting from the resignation of former CEO Jamieson Karson. Madden announced the departure of Karson on March 24. Rosenfeld said Madden has retained an executive search firm and the search for a new CEO has been initiated.
“We have the luxury of taking our time here; we don’t feel like we’re in any rush because we feel very confident that we can manage and grow the business with the team that we have,” Rosenfeld said. “We’ve got an experienced group here who’s been together for a number of years so we can take our time and find the right person.”
During the quarter, Madden repurchased 2.6 million shares at $17 a share for a cost of $44.2 million.
“These shares represented approximately 12.9% of the outstanding shares of the company,” Rosenfeld said. “We are pleased to have been able to return significant capital to our shareholders we maintain our ongoing focus on maximizing long-term shareholder value.”
In midday Thursday trading, SHOO shares are up 4.49%, or $0.85, at $19.76.
