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Here's Why Steven Madden (SHOO) Stock Surges 90% in a Year
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Steven Madden, Ltd. (SHOO - Free Report) appears promising, thanks to immense strength in its e-commerce business and other strategic initiatives. The e-commerce wing has been quite successful for the company amid the pandemic so far. The said business continues gaining from prudent investments in digital marketing as well as efforts to optimize the features and functionality of its website. Management also remains encouraged about a slew of judicious buyouts made by the Fashion-footwear dealer. Its cost-containment efforts are too fruitful, thus driving its margins.
Buoyed by the aforesaid strengths, shares of this Long Island City, NY-based company have increased 90%, outperforming the industry’s 64.3% rally over the course of a year. The stock also got a solid boost from Steven Madden’s recently reported sturdy second-quarter 2021 results. Now let’s delve deeper to find out the company’s positives that are likely to help it sustain the momentum.
Growth Efforts
Detailing e-commerce initiatives, we note that the company has been significantly accelerating its digital commerce efforts with respect to distribution for a while now. Solid gains from increased investment in digital marketing and robust capabilities, such as try before you buy are steadily contributing to its performance.
It added a high level talent to the organization, ramped up digital marketing spend, improved data science capabilities, launched try-before-you-buy payment facility, rolled out buy online, pick-up in store across its entire U.S. full-price retail outlets plus introduced advanced delivery and return options. E-commerce momentum continued in the second quarter of 2021 with revenues surging 105%, including a 119%-increase in Steve Madden e-commerce business. Going forward, strength in e-commerce is likely to stay and keep boosting the company’s overall results.
Now speaking of the company’s discreet buyouts, management concluded the acquisition of the remaining 49.9% share of its European joint venture (JV). This transaction distributes the company’s branded footwear and accessories across majority countries in Europe. It formed the JV roughly five years ago. Notably, this joint venture registered solid double-digit percentage revenue growth each year with a 21% revenue increase in 2020. Another acquisition that appears commendable is the buyout of BB Dakota, a California-based women's apparel company, through which Steven Madden has been expanding its apparel category for sometime now.
Overall, the company is focused on creating trendy products, deepening relations with customers via marketing, enhancing digital commerce solutions and expanding in the international markets. Strength in the company’s brands and a robust business model position it well to cash in on the market-growth opportunities and boost its stakeholders’ value.
Q2 Highlights & Outlook
Both sales and earnings beat the Zacks Consensus Estimate and increased year over year. Total revenues surged 178.6% year over year while the adjusted earnings of 48 cents a share came against the adjusted loss of 19 cents reported in the year-ago quarter.
Results gained from a strong e-commerce momentum, trend-right product assortments and an accelerated business recovery. Brick-and-mortar business was also strong. The company’s retail stores rebounded sharply and surpassed the pre-pandemic levels. Management highlighted that the company benefitted from increased consumer demand and spending on fashion products.
Steven Madden expects the growth trends witnessed during the second quarter to sustain through 2021. For the current year, management now projects revenue growth of 43-47% year over year from total revenues of $1,201.8 million reported in 2020. Adjusted earnings per share are likely to fall in the bracket of $2-$2.10, significantly up from 64 cents earned last year.
Additionally, analysts look pretty optimistic about the stock, apparent from the company’s higher earnings estimate revisions. The Zacks Consensus Estimate for 2021 earnings stands at $2.08 while the same for 2022 is pegged at $2.42 moved 23.8% and 14.7% north, respectively, over the past 30 days.
Encouragingly, Steven Madden has a Zacks Rank #2 (Buy), currently. A VGM Score of B coupled with an expected long-term earnings growth rate of 15% speaks volumes for the company’s potential.
Image: Bigstock
Here's Why Steven Madden (SHOO) Stock Surges 90% in a Year
Steven Madden, Ltd. (SHOO - Free Report) appears promising, thanks to immense strength in its e-commerce business and other strategic initiatives. The e-commerce wing has been quite successful for the company amid the pandemic so far. The said business continues gaining from prudent investments in digital marketing as well as efforts to optimize the features and functionality of its website. Management also remains encouraged about a slew of judicious buyouts made by the Fashion-footwear dealer. Its cost-containment efforts are too fruitful, thus driving its margins.
Buoyed by the aforesaid strengths, shares of this Long Island City, NY-based company have increased 90%, outperforming the industry’s 64.3% rally over the course of a year. The stock also got a solid boost from Steven Madden’s recently reported sturdy second-quarter 2021 results. Now let’s delve deeper to find out the company’s positives that are likely to help it sustain the momentum.
Growth Efforts
Detailing e-commerce initiatives, we note that the company has been significantly accelerating its digital commerce efforts with respect to distribution for a while now. Solid gains from increased investment in digital marketing and robust capabilities, such as try before you buy are steadily contributing to its performance.
It added a high level talent to the organization, ramped up digital marketing spend, improved data science capabilities, launched try-before-you-buy payment facility, rolled out buy online, pick-up in store across its entire U.S. full-price retail outlets plus introduced advanced delivery and return options. E-commerce momentum continued in the second quarter of 2021 with revenues surging 105%, including a 119%-increase in Steve Madden e-commerce business. Going forward, strength in e-commerce is likely to stay and keep boosting the company’s overall results.
Now speaking of the company’s discreet buyouts, management concluded the acquisition of the remaining 49.9% share of its European joint venture (JV). This transaction distributes the company’s branded footwear and accessories across majority countries in Europe. It formed the JV roughly five years ago. Notably, this joint venture registered solid double-digit percentage revenue growth each year with a 21% revenue increase in 2020. Another acquisition that appears commendable is the buyout of BB Dakota, a California-based women's apparel company, through which Steven Madden has been expanding its apparel category for sometime now.
Overall, the company is focused on creating trendy products, deepening relations with customers via marketing, enhancing digital commerce solutions and expanding in the international markets. Strength in the company’s brands and a robust business model position it well to cash in on the market-growth opportunities and boost its stakeholders’ value.
Q2 Highlights & Outlook
Both sales and earnings beat the Zacks Consensus Estimate and increased year over year. Total revenues surged 178.6% year over year while the adjusted earnings of 48 cents a share came against the adjusted loss of 19 cents reported in the year-ago quarter.
Results gained from a strong e-commerce momentum, trend-right product assortments and an accelerated business recovery. Brick-and-mortar business was also strong. The company’s retail stores rebounded sharply and surpassed the pre-pandemic levels. Management highlighted that the company benefitted from increased consumer demand and spending on fashion products.
Steven Madden expects the growth trends witnessed during the second quarter to sustain through 2021. For the current year, management now projects revenue growth of 43-47% year over year from total revenues of $1,201.8 million reported in 2020. Adjusted earnings per share are likely to fall in the bracket of $2-$2.10, significantly up from 64 cents earned last year.
Additionally, analysts look pretty optimistic about the stock, apparent from the company’s higher earnings estimate revisions. The Zacks Consensus Estimate for 2021 earnings stands at $2.08 while the same for 2022 is pegged at $2.42 moved 23.8% and 14.7% north, respectively, over the past 30 days.
Encouragingly, Steven Madden has a Zacks Rank #2 (Buy), currently. A VGM Score of B coupled with an expected long-term earnings growth rate of 15% speaks volumes for the company’s potential.
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