Steven Madden's Q2 2025: Navigating Tariff Turbulence and Consumer Dynamics Amid Contradictions

Impact of tariffs on gross margin, sourcing and production shifts, consumer response to price increases, impact of Kurt Geiger acquisition, inventory and tariff exposure are the key contradictions discussed in Steven Madden, Ltd.'s latest 2025Q2 earnings call.



Impact of Tariffs on Financial Performance:
- Steve Madden Limited's consolidated revenue for Q2 2025 was $559 million, a 6.8% increase compared to Q2 2024. However, excluding the newly acquired Kurt Geiger, consolidated revenue decreased by 10%.
- The financial performance was negatively affected by new tariffs on goods imported into the United States, leading to wholesale customers canceling orders, reducing open-to-buys, and shipment delays.

Wholesale Revenue Decline and Channel Impact:
- Wholesale revenue was $360.6 million, down 6.4% compared to Q2 2024, and excluding Kurt Geiger, wholesale revenue decreased by 12.8%.
- The majority of the decline was attributed to order cancellations and delays, particularly in channels such as mass and off-price, which accounted for approximately 95% of the wholesale revenue shortfall.

Direct-to-Consumer Segment Growth:
- Direct-to-consumer revenue increased by 43.3% to $195.5 million. Excluding Kurt Geiger, direct-to-consumer revenue decreased by 3%.
- The growth was driven by the acquisition of Kurt Geiger, which provided a higher-margin mix, and an increase in digital sales.

Diversification of Sourcing and Pricing Strategies:
- To mitigate tariff impacts, Steve Madden diversified sourcing, currently planning to source approximately 30% of U.S. imports from China for fall 2025, down from 71% in full-year 2024.
- The company also selectively raised prices to wholesale customers and consumers, with an average increase of 10% across products to offset increased landed costs.