SHOO — Steven Madden, Ltd.

Summary of Steven Madden, Ltd. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $753.7 million, a 29.4% increase year-over-year. Excluding Kurt Geiger, revenue decreased by 1.4%.
• Wholesale Revenue: $433.3 million, up 7.5% year-over-year; down 2.6% excluding Kurt Geiger.
• Direct-to-Consumer Revenue: $316.6 million, a 79.9% increase compared to Q4 2024; up 1.6% excluding Kurt Geiger.
• Gross Margin: 43.8% in Q4, up from 40.4% in 2024.
• Operating Income: $50.9 million (6.8% of revenue), down from $52.6 million (9% of revenue) in Q4 2024.
• Net Income: $34.3 million, or $0.48 per diluted share, compared to $39.3 million, or $0.55 per diluted share in Q4 2024.
• Full Year 2025 Revenue: $2.5 billion, an 11% increase; net income was $120.9 million, or $1.70 per diluted share, down from $192.4 million, or $2.67 per diluted share in 2024.

2. Strategic Updates and Business Highlights

• Core Business Performance: Strong demand in women's footwear and improved product assortments led to growth in the latter half of 2025, continuing into early 2026.
• Kurt Geiger Acquisition: Contributed positively with pro forma revenue growth of 11% in 2025; integration is on track, and the brand is expected to drive significant growth.
• Dolce Vita Growth: Continued expansion in international markets and adjacent categories like handbags; expected high single-digit revenue growth in 2026.
• Marketing Strategy: Enhanced storytelling and targeted marketing efforts aimed at Gen Z and millennials are driving brand engagement, with online searches for Steve Madden up 10% year-over-year.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to increase by 9% to 11% compared to 2025, with Q1 2026 projected to grow by 15% to 17%.
• Private Label Concerns: Anticipated decline of nearly 20% in private label revenue in 2026, contributing to overall revenue challenges.
• Earnings Guidance: No earnings guidance provided due to uncertainty surrounding tariff policies.

4. Bad News, Challenges, or Points of Concern

• Tariff Impact: New tariffs have significantly affected revenue, particularly in the private label segment, which is expected to see a 30% decline in Q1 2026.
• Increased SG&A Costs: Anticipated higher operating expenses due to restored executive salaries and increased incentive compensation, alongside ongoing warehouse fulfillment cost pressures.
• Private Label Decline: Revenue from private label decreased by 15% in 2025, with expectations of further declines in 2026, raising concerns about long-term viability in this segment.

5. Notable Q&A Insights

• Guidance Uncertainty: Management indicated that recent developments regarding tariffs created too much uncertainty to provide earnings guidance, emphasizing the need for clarity before making commitments.
• Sourcing Strategy: The company has diversified its sourcing footprint, reducing reliance on China from over 70% in 2024 to the high 30s in 2025, with plans to continue this trend.
• Market Positioning: Management expressed confidence in the ability to regain private label business over time, citing strong relationships with customers and the company's fashion expertise.
• DTC Performance: Notable growth in e-commerce and full-price channels, with plans to open new stores for Kurt Geiger and maintain a stable store count for Steve Madden.

Overall, while Steven Madden, Ltd. demonstrated strong growth in certain segments and strategic initiatives, significant challenges remain, particularly related to tariffs and the private label business. The company's outlook for 2026 reflects cautious optimism amidst these headwinds.