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STEVEN MADDEN, LTD. (SHOO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue rose 6.9% year over year to $667.9M, but came in below S&P Global consensus ($694.2M*); adjusted diluted EPS was $0.43, slightly below consensus $0.446, with tariffs driving margin compression and shipment delays in wholesale. *
  • Direct-to-consumer (DTC) surged 76.6% to $221.5M (up 1.5% ex-Kurt Geiger), while wholesale fell 10.7% (down 19% ex-Kurt Geiger); adjusted gross margin improved to 43.4% on mix, despite tariff pressure.
  • Management initiated Q4 2025 guidance: revenue +27–30% YoY; GAAP EPS $0.30–$0.35; adjusted EPS $0.41–$0.46, citing stronger Steve Madden product trends, tariff mitigation, and Kurt Geiger contribution.
  • Key near-term catalysts: Q4 guidance inflection, accelerating boot/dress categories, price/mix AUR gains, and normalization of wholesale orders; risks include continued tariff headwinds and outlet drag in border markets.

What Went Well and What Went Wrong

What Went Well

  • Strong DTC growth and product resonance: DTC revenue +76.6% (61.9% adjusted DTC GM) with boots, dress shoes, and casuals driving mix-led strength; marketing investment amplified Gen Z/millennial conversion. “Boots have been the standout… casual tall shaft styles… dress shoes across various heel heights… loafers, Mary Janes, and mules.”
  • Kurt Geiger momentum and integration: Comp sales up mid-teens; >70% DTC mix supports consolidated gross margin; management advancing revenue synergies and logistics cost savings.
  • Reinstated quarterly outlook: Q4 revenue +27–30% and adjusted EPS $0.41–$0.46 guided, underpinned by improved wholesale order patterns and pricing/sourcing mitigation.

What Went Wrong

  • Tariff shock compressed margins and delayed shipments: Wholesale GM fell to 33.6% (from 35.5% LY), DTC GM to 61.9% (from 64.0% LY); GAAP operating margin dropped to 4.7% and adjusted to 6.9%.
  • Wholesale contraction (organic): Wholesale revenue down 10.7% (down 19% ex-Kurt Geiger), with accessories/apparel underperforming (still expected down mid-to-high teens ex-KG in Q4).
  • Outlet channel drag and value channels pullback: Outlets saw notable weakness, with five of eight largest stores on the Mexico border running ~40% down; mass/off-price were most impacted during the 145% tariff spike.

Financial Results

Consolidated Actuals (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$553.5 $559.0 $667.9
GAAP Diluted EPS ($)$0.57 ($0.56) $0.29
Adjusted Diluted EPS ($)$0.60 $0.20 $0.43
Gross Margin (%)40.9% 40.4% 41.5% (Adj: 43.4%)
Operating Income Margin (%)9.7% (7.2%) 4.7% (Adj: 6.9%)
EBITDA ($USD Millions)$61.1*$23.1*$45.5*

Values retrieved from S&P Global.*

Actual vs Consensus (S&P Global) and Surprise

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus ($USD Millions)$556.3*$576.6*$694.2*
Revenue Actual ($USD Millions)$553.5 $559.0 $667.9
Revenue Surprise (%)(0.5%)*(3.1%)*(3.8%)*
EPS Consensus ($)$0.456*$0.241*$0.446*
Adjusted EPS Actual ($)$0.60 $0.20 $0.43
EPS SurpriseBEAT (by $0.14)*MISS (by $0.04)*MISS (by $0.02)*

Values retrieved from S&P Global.*

Segment and Margin Mix (oldest → newest)

Segment MetricQ1 2025Q2 2025Q3 2025
Wholesale Revenue ($USD Millions)$439.3 $360.6 $442.7
Wholesale Gross Margin (Adj) (%)35.7% 30.9% 33.6%
DTC Revenue ($USD Millions)$112.1 $195.5 $221.5
DTC Gross Margin (Adj) (%)60.1% 61.3% 61.9%

KPIs (oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Stores (company-operated)314 392 397
Outlets (included in stores)—98 99
E-commerce sites5 7 7
Concessions (intl)61 130 133
Inventory ($USD Millions)$238.6 $437.0 $476.0
Cash + ST Investments ($USD Millions)$147.2 $111.9 $108.9
Total Debt ($USD Millions)—$293.5 $293.8
Net Debt ($USD Millions)—$181.6 $185.0
Dividend per share ($)$0.21 $0.21 $0.21

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth (YoY)Q4 2025None (FY 2025 guidance withdrawn in Q1/Q2) +27% to +30% Initiated
GAAP Diluted EPSQ4 2025N/A$0.30–$0.35 Initiated
Adjusted Diluted EPSQ4 2025N/A$0.41–$0.46 Initiated
DividendQ4 2025$0.21 (ongoing) $0.21 (Dec 26, 2025 pay date) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Tariffs/macroWithdrew FY’25 guidance; highlighted new tariff impacts and uncertainty (Q1/Q2) “Third quarter was challenging… tariffs led to order reductions and shipment delays; worst is behind us as orders normalize.” Stabilizing, mitigations increasing
Supply chain & sourcingShifting production; agility emphasized (Q2) Midstream shifts out of China; leveraging Mexico for 30-day reorders; cautious re-diversification as China tariffs ease. Diversifying; improving speed
Product performanceStrong Kurt Geiger handbags; core categories mixed (Q1) Boots led (casual tall shaft), dress shoes recovery, casuals (loafers/Mary Janes/mules) offset sneaker softness. Positive, broadening
Pricing/AUR & promotionIncreased promo in Q1 DTC, cautious pricing (Q1) AUR up high-single digits in Q3 DTC; mid-teens in Q4 run-rate; reduced promotional days given product strength. Price/mix tailwind
Channel mix (wholesale vs DTC)DTC expanding (Q2); wholesale impacted by tariffs (Q2) DTC +76.6% (ex-KG +1.5%); wholesale –10.7% (ex-KG –19%); value channels lag, regular price channels stronger. Mix skew to DTC
Kurt Geiger integrationCompleted acquisition; expected growth (Q1) Mid-teens comps; Q4 rev $182–$187M with ~$135M DTC; SG&A synergy focus; international ramp into 2026. Accretive; synergy ramping
Regional/retail dynamicsNot detailed (Q1/Q2)Outlet drag; Mexico border outlets ~40% down; full-price stores better; international Steve Madden high-single-digit growth FY’25. Mixed; outlet pressure

Management Commentary

  • “As anticipated, the third quarter was challenging, driven largely by the impact of new tariffs… Consumers have responded favorably to our Fall assortments… position us to deliver stronger financial results beginning in the fourth quarter.” — Ed Rosenfeld, CEO (press release)
  • “Order patterns from our wholesale customers are normalizing… mitigating a larger percentage of the gross margin pressure through strategic pricing actions and sourcing initiatives.” (prepared remarks)
  • “Boots have been the standout… dress shoes… casuals like loafers, Mary Janes, and mules… marketing… increased investment across YouTube, TikTok, Snapchat, and Pinterest.” (prepared remarks)
  • “Kurt Geiger comp sales were up mid-teens… integration remains on track… cost savings in freight and logistics.” (prepared remarks)

Q&A Highlights

  • Core vs. Kurt Geiger in Q4: Core revenue guide ex-KG down ~2% to 4%; wholesale footwear and DTC positive; KG revenue $182–$187M ($135M DTC, >70% DTC mix).
  • Margin trajectory: Tariff impact to gross margin worsened ~100 bps in Q3 vs Q2; net impact in Q4 expected “considerably less” as mitigation builds; KG lowers gross margin mix by ~300 bps in Q4.
  • Pricing and AUR: AUR up high-single digits in Q3 DTC; mid-teens in Q4; surgical pricing (fashion-forward styles tolerate increases better than basics).
  • Channel dynamics: Value channels (off-price/mass) pulled back most during 145% China tariff spike; regular price channels stronger; outlet drag including border stores ~40% down.
  • Kurt Geiger margin path: 2025 (May–Dec partial) ~6% EBIT; intermediate target to reach legacy Steve Madden levels or higher over time via SG&A leverage.

Estimates Context

  • Q3: Revenue $667.9M vs $694.2M consensus (MISS); adjusted EPS $0.43 vs $0.446 consensus (MISS). Q2: Revenue $559.0M vs $576.6M (MISS); adjusted EPS $0.20 vs $0.241 (MISS). Q1: Revenue $553.5M vs $556.3M (MISS), but adjusted EPS $0.60 vs $0.456 (BEAT). *
  • Forward implications: Q4 top-line guidance (+27–30% YoY) likely triggers upward revenue estimate revisions, while margin expectations should reflect ongoing tariff mitigation, mix (higher DTC/KG), and reduced promotions; wholesale accessories/apparel remains a headwind ex-KG.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term inflection set-up: Q4 guidance signals revenue acceleration with improving product trends and pricing/mix tailwinds; monitor execution vs +27–30% growth and adjusted EPS $0.41–$0.46.
  • Mix matters: DTC growth and KG’s >70% DTC skew support consolidated gross margin, but mix and tariff impacts keep operating margin below historical levels near term.
  • Tariff mitigation progressing: Strategic pricing, sourcing diversification (including Mexico) and factory discounts are reducing net margin impact heading into Q4.
  • Category strength: Boots/dress/casuals drive AUR and reduce promotional intensity; sustained product momentum is pivotal for Q4 holiday performance.
  • Wholesale recovery: Order patterns normalizing, but value channels and wholesale accessories/apparel remain pressured; watch ex-KG wholesale footwear uptick (up 2–4.5% guided).
  • Kurt Geiger synergy ramp: Revenue/SG&A synergies and international expansion into 2026; medium-term margin pathway toward legacy levels or higher.
  • Balance sheet capacity: Net debt ~$185M with liquidity and new credit facilities; dividend maintained at $0.21 per share.