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Steven Madden (SHOO) Stock Gains 31% in a Year: How to Play Ahead?
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Steven Madden, Ltd. (SHOO - Free Report) has experienced a remarkable jump in its stock price over the past year. The stock has gained 31.1% against the Zacks Shoes and Retail Apparel industry’s sharp 11.9% decline. The company focuses on driving growth across its direct-to-consumer business, leveraging digital capabilities, expanding categories beyond footwear such as handbags and apparel and enhancing its international market presence.
This strategic approach, along with its market expansion and product diversification endeavors, has helped it outperform the broader Consumer Discretionary sector’s 8.1% growth in the past year. Closing at $43.97 as of Aug 22, Steven Madden’s stock is currently trading 6.9% below its 52-week high of $47.24, attained on Jul 31, 2024.
Technical indicators are supportive of Steven Madden’s strong performance. The stock is trading above both its 50-day and 100-day moving averages, thus indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in the company’s financial health and prospects.
From a valuation perspective, Steven Madden’s shares present an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-sales ratio of 1.39, below the five-year median of 1.41 and the industry’s average of 2.23, the stock offers compelling value for investors seeking exposure to the sector. Additionally, SHOO’s current Value Score of B reinforces its attractiveness.
Image Source: Zacks Investment Research
Decoding the Tailwinds of SHOO
Steven Madden has demonstrated a solid strategic approach to driving growth across various segments, with a strong focus on its DTC business and international markets. The company’s efforts to expand beyond footwear into categories such as handbags and apparel, coupled with its investment in digital capabilities, have proven successful, resulting in significant revenue increases across these segments in the second quarter. The acquisition of Almost Famous has further bolstered its apparel offerings, contributing to Steven Madden's robust growth trajectory.
The wholesale business exhibited strong performance, with revenues increasing 22.5% year over year to $385.3 million in the second quarter. Notably, wholesale accessories and apparel revenues surged 86%, reflecting the company’s successful diversification beyond its core footwear segment. Excluding the Almost Famous acquisition, wholesale revenues grew 8.2%, with accessories and apparel revenues rising 29.8%.
The DTC segment also showed resilience, with revenues growing 6.4% year over year to $136.4 million. Comparable DTC sales increased 4.1%, driven by strong product assortments and disciplined inventory management, which reduced the need for promotional activities.
In addition to product diversification, Steven Madden has been aggressively expanding its international footprint, viewing it as a critical long-term growth opportunity. International revenues grew 13% year over year in the second quarter, with the EMEA region standing out as a strong performer. The company anticipates EMEA revenues to grow more than 20% in 2024.
SHOO’s Prudent Financial Stewardship
Steven Madden's second-quarter financials underscore its strong fiscal health and strategic capital management. With cash and cash equivalents totaling $180.5 million and short-term investments of $11.8 million, the company maintains a solid liquidity position. The absence of debt as of Jun 30, 2024, highlights its prudent financial stewardship.
Additionally, the repurchase of $38.2 million worth of common stock, including shares acquired through net settlements of employees’ stock awards, reflects the company’s confidence in its valuation and commitment to returning value to shareholders. The approval of a 21-cent quarterly cash dividend, payable on Sep 23, 2024, to stockholders of record as of Sep 13, reinforces Steven Madden's solid financial standing and its shareholder-friendly policies.
Steven Madden's Path Forward
Looking ahead, Steven Madden is well-positioned to capitalize on growth opportunities in both domestic and international markets. The recovery in the U.S. wholesale footwear business is a positive sign of inventory normalization and improved relationships with key retail partners. The company expects 2024 revenues to increase in the band of 11-13% from 2023, with adjusted earnings per share (EPS) projected to be in the range of $2.55-$2.65 compared with $2.30 in 2023.
How to Play SHOO?
Analysts seem quite optimistic about Steven Madden. The Zacks Consensus Estimate for its 2024 sales and EPS is pegged at $2.22 billion and $2.62, respectively, indicating year-over-year growth of 12.3% and 6.9%. Also, the consensus estimate for its 2025 sales and EPS is pegged at $2.33 billion and $2.93, respectively, implying year-over-year growth of 4.7% and 11.7%.
The company’s focus on expanding its product categories, enhancing digital capabilities and growing its international presence has contributed to its robust stock performance and favorable market perception. With solid financial health, shareholder-friendly initiatives and positive technical indicators, Steven Madden is well-positioned to continue capitalizing on growth opportunities in both domestic and international markets, thus making it an attractive investment prospect for the future. The company currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 8.9% and 10.7%, respectively, from the fiscal 2023 reported figures. BOOT has a trailing four-quarter average earnings surprise of 7.1%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It carries a Zacks Rank of 2 at present. ANF delivered a 28.9% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2024 earnings and sales indicates growth of 52.6% and 11.5%, respectively, from the fiscal 2023 reported levels. ANF has a trailing four-quarter average earnings surprise of 210.3%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Deckers’ fiscal 2025 earnings and sales indicates growth of 8.3% and 11.5%, respectively, from the year-ago actuals. DECK has a trailing four-quarter average earnings surprise of 47.2%.
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Steven Madden (SHOO) Stock Gains 31% in a Year: How to Play Ahead?
Steven Madden, Ltd. (SHOO - Free Report) has experienced a remarkable jump in its stock price over the past year. The stock has gained 31.1% against the Zacks Shoes and Retail Apparel industry’s sharp 11.9% decline. The company focuses on driving growth across its direct-to-consumer business, leveraging digital capabilities, expanding categories beyond footwear such as handbags and apparel and enhancing its international market presence.
This strategic approach, along with its market expansion and product diversification endeavors, has helped it outperform the broader Consumer Discretionary sector’s 8.1% growth in the past year. Closing at $43.97 as of Aug 22, Steven Madden’s stock is currently trading 6.9% below its 52-week high of $47.24, attained on Jul 31, 2024.
Technical indicators are supportive of Steven Madden’s strong performance. The stock is trading above both its 50-day and 100-day moving averages, thus indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in the company’s financial health and prospects.
From a valuation perspective, Steven Madden’s shares present an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-sales ratio of 1.39, below the five-year median of 1.41 and the industry’s average of 2.23, the stock offers compelling value for investors seeking exposure to the sector. Additionally, SHOO’s current Value Score of B reinforces its attractiveness.
Image Source: Zacks Investment Research
Decoding the Tailwinds of SHOO
Steven Madden has demonstrated a solid strategic approach to driving growth across various segments, with a strong focus on its DTC business and international markets. The company’s efforts to expand beyond footwear into categories such as handbags and apparel, coupled with its investment in digital capabilities, have proven successful, resulting in significant revenue increases across these segments in the second quarter. The acquisition of Almost Famous has further bolstered its apparel offerings, contributing to Steven Madden's robust growth trajectory.
The wholesale business exhibited strong performance, with revenues increasing 22.5% year over year to $385.3 million in the second quarter. Notably, wholesale accessories and apparel revenues surged 86%, reflecting the company’s successful diversification beyond its core footwear segment. Excluding the Almost Famous acquisition, wholesale revenues grew 8.2%, with accessories and apparel revenues rising 29.8%.
The DTC segment also showed resilience, with revenues growing 6.4% year over year to $136.4 million. Comparable DTC sales increased 4.1%, driven by strong product assortments and disciplined inventory management, which reduced the need for promotional activities.
In addition to product diversification, Steven Madden has been aggressively expanding its international footprint, viewing it as a critical long-term growth opportunity. International revenues grew 13% year over year in the second quarter, with the EMEA region standing out as a strong performer. The company anticipates EMEA revenues to grow more than 20% in 2024.
SHOO’s Prudent Financial Stewardship
Steven Madden's second-quarter financials underscore its strong fiscal health and strategic capital management. With cash and cash equivalents totaling $180.5 million and short-term investments of $11.8 million, the company maintains a solid liquidity position. The absence of debt as of Jun 30, 2024, highlights its prudent financial stewardship.
Additionally, the repurchase of $38.2 million worth of common stock, including shares acquired through net settlements of employees’ stock awards, reflects the company’s confidence in its valuation and commitment to returning value to shareholders. The approval of a 21-cent quarterly cash dividend, payable on Sep 23, 2024, to stockholders of record as of Sep 13, reinforces Steven Madden's solid financial standing and its shareholder-friendly policies.
Steven Madden's Path Forward
Looking ahead, Steven Madden is well-positioned to capitalize on growth opportunities in both domestic and international markets. The recovery in the U.S. wholesale footwear business is a positive sign of inventory normalization and improved relationships with key retail partners. The company expects 2024 revenues to increase in the band of 11-13% from 2023, with adjusted earnings per share (EPS) projected to be in the range of $2.55-$2.65 compared with $2.30 in 2023.
How to Play SHOO?
Analysts seem quite optimistic about Steven Madden. The Zacks Consensus Estimate for its 2024 sales and EPS is pegged at $2.22 billion and $2.62, respectively, indicating year-over-year growth of 12.3% and 6.9%. Also, the consensus estimate for its 2025 sales and EPS is pegged at $2.33 billion and $2.93, respectively, implying year-over-year growth of 4.7% and 11.7%.
The company’s focus on expanding its product categories, enhancing digital capabilities and growing its international presence has contributed to its robust stock performance and favorable market perception. With solid financial health, shareholder-friendly initiatives and positive technical indicators, Steven Madden is well-positioned to continue capitalizing on growth opportunities in both domestic and international markets, thus making it an attractive investment prospect for the future. The company currently carries a Zacks Rank #2 (Buy).
Other Key Picks
Other top-ranked stocks are Boot Barn Holdings, Inc. (BOOT - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 8.9% and 10.7%, respectively, from the fiscal 2023 reported figures. BOOT has a trailing four-quarter average earnings surprise of 7.1%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It carries a Zacks Rank of 2 at present. ANF delivered a 28.9% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2024 earnings and sales indicates growth of 52.6% and 11.5%, respectively, from the fiscal 2023 reported levels. ANF has a trailing four-quarter average earnings surprise of 210.3%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Deckers’ fiscal 2025 earnings and sales indicates growth of 8.3% and 11.5%, respectively, from the year-ago actuals. DECK has a trailing four-quarter average earnings surprise of 47.2%.