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- **Q3 Challenges & Resilience**: Tariffs caused 14.8% organic revenue decline, but DTC sales surged 76.6% driven by KG. Steve Madden boots and dress shoes outperformed, with DTC sales accelerating 1.5% excluding KG.
- **Q4 Growth Outlook**: Revenue expected to jump 27-30% YoY, driven by KG ($182-187 million) and improved Steve Madden execution. EPS guidance of $0.41-0.46 reflects margin recovery efforts.
- **Strategic Moves**: KG expansion in US and international markets, with 70% DTC mix. Tariff mitigation through pricing, diversification, and sourcing from Mexico. Reduced promotions in Q4 due to strong product demand.
- **Long-Term Vision**: Targeting pre-tariff margins through consumer price pass-through and KG margin expansion to Steve Madden levels over time.

**【CEO Summary Section】**
- Q3 was challenging due to 145% tariffs on Chinese imports, causing order cancellations and shipment delays. However, consumer demand remains strong, with Steve Madden boots and dress shoes outperforming. DTC sales for Steve Madden accelerated, driven by effective marketing on TikTok, YouTube, and other platforms. Kurt Geiger London (KG) saw mid-teens comp sales growth, and integration efforts with Steve Madden are progressing, including expanding KG in international markets.
- Despite tariffs, the team executed strategic pricing and sourcing to mitigate margin pressure. The fall product assortment, particularly boots, resonated with consumers, leading to improved sell-throughs. The CEO expects Q4 to show improved financial performance and long-term growth through brand relevance and operational efficiency.

**【CFO Financial Commentary】**
- Q3 revenue: $667.9 million (+6.9% YoY), excluding KG: -14.8%. DTC revenue: $221.5 million (+76.6%), driven by KG. Gross margin: 43.4% (up from 41.6% YoY) due to KG's higher DTC mix. Operating expenses: $243.4 million (+39.7% YoY), reflecting higher DTC investments. Net income: $30.4 million ($0.43 EPS) vs. $4.8 million ($0.91 EPS) YoY.
- Q4 guidance: Revenue +27-30% YoY, EPS $0.41-0.46. KG contributes $182-187 million, with ~70% DTC mix. Margins impacted by tariffs but expected to improve as pricing actions and diversification efforts take effect.

**【Q&A Highlights】**
- **Tariff Impact & Sourcing**: Tariffs reduced wholesale revenue (-19% excluding KG), but order patterns are normalizing. The company is diversifying sourcing beyond China, with 30-day reorder capabilities in Mexico. A 10% tariff reduction on China may allow some production shift, but diversification will continue.
- **KG Expansion**: KG plans to open new US stores and expand internationally. Q4 KG DTC revenue预计$135 million, contributing to higher margins. Long-term, KG aims to achieve Steve Madden-like margins through SG&A synergies and scale.
- **DTC vs. Wholesale**: DTC outperformed wholesale, with Steve Madden e-commerce up mid-teens. Outlet stores lag due to border closures and supply chain disruptions. Promotional activity reduced in Q4, reflecting stronger product demand.
- **Margin Recovery**: CFO estimates tariffs added ~100bps margin pressure in Q3, with Q4 slightly worse. Over time, pricing actions and diversification should offset tariffs, with KG margins improving as synergies materialize.

Steven Madden, Ltd. (SHOO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

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Net Income from Continuing Operations

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

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SHOO

SHOO fundamentals

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