Steven Madden updates Q3 and lowers full year outlook
Steven Madden, Ltd. (Nasdaq: SHOO), fashion designer of footwear and accessories for women, men and children, updated its guidance today for the third quarter and lowered its full year guidance.
For the third quarter, the small cap said it expects to book sales of approximately $113 million, compared with sales of $123.2 million in the third quarter last year. Six analysts polled by Thomson Financial are on average forecasting sales of $115.23 million.
The fashion house cited a challenging selling environment throughout the quarter on account of a lack of strong direction in footwear fashion trends as well as generally softer retail trends compared with last year, which the company said resulted in top line declines for both the wholesale and retail divisions.
CL King analyst Scott Krasik says the issues, for the most part, are secular in nature and not company specific. Despite a weakening macroeconomic environment, Krasik is maintaining a rating of “strong buy” on the stock.
“The stock price has declined more than 60% from its 52-week high while earnings guidance has decreased by less than 30%,” Krasik wrote in a research note. “Steve Madden has transformed itself over the last two years into a better operator which gives us some confidence that when the current consumer environment and footwear cycle turn more positive, Steve Madden will benefit and show earnings growth.”
Krasik said the company executed extremely well in a weak sales atmosphere during the second quarter and ended the quarter with 18% less inventory year-over-year.
Steven Madden said it anticipates third quarter earnings in the range of between $0.40 and $0.42 per share, excluding a one-time gain of $0.13 per share from tax savings related to prior periods, partially offset by a one-time charge of $0.03 per share related to a provision for prior year customs duties. Eight analysts surveyed by Thomson Financial are on average anticipating earnings of $0.46 per share. Earnings for the third quarter of 2006 were $0.57 per share.
Steve Madden also updated its full year outlook given softening in recent and expected business and industry trends. The company now anticipates that total annual sales will decrease 9% to 11% from last year. Sales last year were $475.16 million. Seven analysts polled by Thomson are on average projecting sales of $443.24 million.
The designer is now forecasting full-year earnings of between $1.50 and $1.60 per share, excluding the one-time items expected to be incurred in the third quarter. The firm previously guided for full-year earnings in the range of $2.00 to $2.10 per share. The consensus of eight analysts surveyed by Thomson Financial is for earnings of $1.76 for the full year.
Shares of Steven Madden (SHOO) gained 5.66%, or $1.00, to $18.68 at 11:40 a.m. ET. Shares of Steven Madden have been trading in the range of $17.10 to $44.70 for the past 52 weeks.
