LONG ISLAND CITY, N.Y., Oct. 30, 2018 (GLOBE NEWSWIRE) -- Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion footwear and accessories for women, men and children, today announced financial results for the third quarter ended September 30, 2018.

Amounts referred to as “Adjusted” exclude the items that are described under the heading “Non-GAAP Adjustments.”

All share and per share data provided herein is adjusted retroactively for the three-for-two stock split effective October 12, 2018.

For the Third Quarter 2018:

• Net sales increased 3.9% to $458.5 million compared to $441.2 million in the same period of 2017.
• Gross margin was 38.2% compared to 37.6% in the same period last year, an increase of 60 basis points.
• Operating expenses as a percentage of sales were 24.0% compared to 23.8% of sales in the same period of 2017. Adjusted operating expenses as a percentage of sales were 23.9% compared to 23.7% in the same period of 2017.
• Income from operations totaled $70.2 million, or 15.3% of net sales, compared to $65.4 million, or 14.8% of net sales, in the same period of 2017. Adjusted income from operations was $70.6 million, or 15.4% of net sales, compared to Adjusted income from operations of $65.9 million, or 14.9% of net sales, in the same period of 2017.
• Net income attributable to Steven Madden, Ltd. was $55.6 million, or $0.64 per diluted share, compared to $44.2 million, or $0.51 per diluted share, in the prior year's third quarter. Adjusted net income attributable to Steven Madden, Ltd. was $55.9 million, or $0.65 per diluted share, compared to $44.5 million, or $0.51 per diluted share, in the prior year's third quarter.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We are pleased with our performance in the third quarter, which included strong financial results as well as progress on a number of our key strategic initiatives. In addition to robust growth in our core Steve Madden Women’s wholesale business, we saw strong gains in international markets, outstanding performance in Blondo and a significant acceleration in our e-commerce business. The momentum in these areas – combined with the power of our brands and the strength of our business model – bolsters our confidence that we can continue to deliver long-term growth and value creation going forward.”

Third Quarter 2018 Segment Results

Net sales for the wholesale business increased 3.1% to $388.5 million in the third quarter of 2018, as a strong gain in wholesale accessories was partially offset by a modest decline in wholesale footwear driven by the transition of the Company’s business with one of its private label customers from the wholesale model to the buying agency model. Gross margin in the wholesale business increased to 34.3% compared to 33.9% in last year’s third quarter, with gross margin improvement in both wholesale footwear and wholesale accessories.

Retail net sales in the third quarter rose 8.8% to $69.9 million compared to $64.3 million in the third quarter of the prior year. Same store sales increased 5.5% in the quarter, including a solid gain in bricks and mortar locations and a strong increase in the Company’s e-commerce business. Retail gross margin rose to 60.1% in the third quarter of 2018, up 80 basis points compared to 59.3% in the third quarter of the prior year due to improved gross margin in the Company’s e-commerce business.

The Company ended the quarter with 210 company-operated retail locations, including seven Internet stores, as well as 46 company-operated concessions in international markets.

The Company’s effective tax rate for the third quarter of 2018 was 20.8% compared to 32.1% in the third quarter of 2017. The reduction in the Company’s effective tax rate compared to the prior year was primarily a result of the impact of the Tax Cuts and Jobs Act.

Balance Sheet and Cash Flow

During the third quarter of 2018, the Company repurchased 416,264 shares of the Company’s common stock for approximately $15.8 million, which includes shares acquired through the net settlement of employee stock awards.

As of September 30, 2018, cash, cash equivalents, and current marketable securities totaled $230.4 million.

Increased Quarterly Dividend

The Company’s Board of Directors approved a quarterly cash dividend of $0.14 per share, reflecting a 5% increase over the previous quarterly dividend. The dividend will be paid on December 31, 2018, to stockholders of record at the close of business on December 21, 2018.

Updated Fiscal Year 2018 Outlook

For fiscal year 2018, the Company now expects net sales will increase 6% to 7% over net sales in 2017, the high end of the previous range of 5% to 7%. The Company expects diluted EPS for fiscal year 2018 will be in the range of $1.70 to $1.72, the high end of the previous range of $1.67 to $1.72. The Company expects Adjusted diluted EPS for fiscal year 2018 will be in the range of $1.76 to $1.78, the high end of the previous range of $1.73 to $1.78.

Non-GAAP Adjustments

Amounts referred to as “Adjusted” exclude the items below.

For the third quarter 2018:

• $0.4 million pre-tax ($0.3 million after-tax) expense in connection with the integration of the Schwartz & Benjamin acquisition and the related restructuring, included in operating expenses.

For the third quarter 2017:

• $0.5 million pre-tax ($0.3 million after-tax) expense in connection with the integration of the Schwartz & Benjamin acquisition and the related restructuring, included in operating expenses.

For the fiscal year 2018:

• $2.8 million pre-tax ($2.1 million after-tax) expense in connection with a provision for legal charges, included in operating expenses.
• $1.8 million pre-tax ($1.3 million after-tax) expense in connection with the integration of the Schwartz & Benjamin acquisition and the related restructuring, included in operating expenses.
• $1.2 million pre-tax ($0.9 million after-tax) expense in connection with a warehouse consolidation, included in operating expenses.
• $1.0 million tax expense in connection with the impairment of the preferred interest investment in Brian Atwood Italia Holding, LLC recorded in fourth quarter 2017.

Reconciliations of amounts on a GAAP basis to Adjusted amounts are presented in the Non-GAAP Reconciliation tables at the end of this release and identify and quantify all excluded items.

About Steve Madden

Steve Madden designs, sources and markets fashion-forward footwear and accessories for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo®, Report®, Brian Atwood®, Cejon®, Mad Love® and Big Buddha®, Steve Madden is a licensee of various brands, including Kate Spade®, Superga® and Anne Klein®. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden's wholesale distribution includes department stores, specialty stores, luxury retailers, national chains and mass merchants. Steve Madden also operates 210 retail stores (including Steve Madden's seven Internet stores). Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including ready-to-wear, outerwear, intimate apparel, eyewear, hosiery, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s boots, fashion sneakers, dress shoes, sandals and more, visit http://www.stevemadden.com.