Shoe and apparel company Steven Madden (NASDAQ:SHOO) missed Wall Street’s revenue expectations in Q1 CY2025, with sales flat year on year at $553.5 million. Its non-GAAP profit of $0.60 per share was 31.7% above analysts’ consensus estimates.
Revenue: $553.5 million vs analyst estimates of $559.1 million (flat year on year, 1% miss)
Adjusted EPS: $0.60 vs analyst estimates of $0.46 (31.7% beat)
Adjusted EBITDA: $65.91 million vs analyst estimates of $49.57 million (11.9% margin, 33% beat)
Operating Margin: 9.7%, in line with the same quarter last year
Free Cash Flow was -$28.68 million compared to -$19.68 million in the same quarter last year
Market Capitalization: $1.46 billion
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased with our performance in the first quarter, as our team’s strong execution of our strategy enabled us to deliver earnings results that significantly exceeded expectations. Looking ahead, we face meaningful near-term headwinds and heightened uncertainty due to the impact of new tariffs on goods imported into the United States. We are moving swiftly to adapt to the changing landscape, with a focus on mitigating near-term impacts while positioning the company for long-term growth. We believe our agile business model – combined with our fortress balance sheet – gives us a competitive advantage in dynamic environments, and we are optimistic that the current disruption will create opportunities for market share gains over time.
Company Overview
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ:SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Steven Madden’s 5.7% annualized revenue growth over the last five years was sluggish. This was below our standard for the consumer discretionary sector and is a rough starting point for our analysis.
Steven Madden Quarterly Revenue
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Steven Madden’s annualized revenue growth of 6.2% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.
Steven Madden Year-On-Year Revenue Growth
We can dig further into the company’s revenue dynamics by analyzing its most important segments, Wholesale and Retail, which are 79.4% and 20.3% of revenue. Over the last two years, Steven Madden’s Wholesale revenue (sales to retailers) averaged 8.2% year-on-year growth while its Retail revenue (direct sales to consumers) averaged 3.7% growth.
This quarter, Steven Madden’s $553.5 million of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 18.9% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and suggests its newer products and services will catalyze better top-line performance.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Steven Madden’s operating margin has shrunk over the last 12 months, but it still averaged 10.2% over the last two years, decent for a consumer discretionary business. This shows it generally does a decent job managing its expenses.
Steven Madden Trailing 12-Month Operating Margin (GAAP)
This quarter, Steven Madden generated an operating profit margin of 9.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Steven Madden’s EPS grew at an unimpressive 9.2% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 5.7% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Steven Madden Trailing 12-Month EPS (Non-GAAP)
In Q1, Steven Madden reported EPS at $0.60, down from $0.65 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Steven Madden’s full-year EPS of $2.63 to shrink by 27.1%.
Key Takeaways from Steven Madden’s Q1 Results
We were impressed by how significantly Steven Madden blew past analysts’ EPS expectations this quarter. On the other hand, its Wholesale revenue missed and its revenue fell slightly short of Wall Street’s estimates. Zooming out, we think this quarter was mixed. The stock remained flat at $19.99 immediately following the results.
