Steven Madden (SHOO) 7 Nov 24 2024 Q3 Earnings call transcript
Steve Madden Limited's recent earnings call for the third quarter of 2024 highlighted a robust performance, with both revenue and earnings exceeding expectations. The company's success was driven by a combination of exceptional growth in the accessories and apparel categories, particularly in handbags and international markets, demonstrating the effectiveness of its long-term growth strategy.
Product and Marketing: Winning with Trend-Right Assortments
CEO Edward Rosenfeld emphasized the company's focus on "winning with product," as evidenced by the success of tall-shaft boots, soccer-inspired sneakers, Mary Janes, and trend-right materials like quilting and patchwork suede. The company's product strategy is complemented by an increased full funnel marketing investment, as seen in the global marketing campaign "Never Miss A Beat," which has positively impacted consumer engagement and sales.
Expanding International Markets and Geographic Diversification
Steve Madden's international revenue grew by 11% in Q3 2024, with significant growth expected in the EMEA region, particularly in Europe and the Middle East. The company's strategic expansion in these regions, coupled with the success of its joint ventures, underscores its commitment to diversifying its geographic footprint and capitalizing on global market opportunities.
Diversifying Beyond Footwear: Accessories and Apparel Growth
The company's focus on expanding beyond footwear was evident in the 48% revenue growth in accessories and apparel, with Steve Madden handbags leading the way. The acquisition of Almost Famous in 2024 contributed $41 million in revenue, and the launch of Madden Girl apparel at Kohl's was particularly successful. These developments underscore the company's strategic diversification and its ability to capitalize on emerging opportunities.
Direct-to-Consumer and Digital Growth
Steve Madden's digital and direct-to-consumer (DTC) business continued to accelerate in Q3 2024, with revenue growth of 8%, including a 5% increase on a comp basis. The company's e-commerce business experienced significant growth, and brick-and-mortar revenue also increased by 6%. These developments underscore the company's strategic focus on digital channels and its ability to leverage technology to enhance the consumer experience.
Financial Performance and Outlook
The company's consolidated revenue for Q3 2024 was $624.7 million, reflecting a 13% increase compared to the same period in 2023. Excluding Almost Famous, revenue grew by 5.5%. The company's wholesale revenue also increased by 14.4%, with significant growth expected in DTC and international markets. Despite a decline in private label and branded business, the company's overall performance was strong, and it has raised its revenue and earnings guidance for 2024.
Corporate Social Responsibility and Sustainability
Steve Madden's commitment to sustainability was also highlighted in the call, with the recent publication of its 2023 Sustainability Report. The company's Let's Get Real sustainability strategy underscores its commitment to reducing its carbon footprint and enhancing social responsibility. These efforts are expected to contribute to the company's long-term growth and value creation for stakeholders.
In conclusion, Steve Madden's Q3 2024 earnings call underscored the company's strategic focus on product, marketing, international expansion, and digital growth. The company's performance in these areas, coupled with its commitment to sustainability, positions it well for long-term growth and value creation for its stakeholders.