Steve Madden returned to a profit in the fourth quarter as its results improve after the slump caused by the Covid-19 pandemic.
The American designer of footwear, accessories and apparel posted a 15.9 percent year-on-year decline in revenues to $353.0 million but the gross margin increased to 38.3 percent from 37.7 percent. The adjusted gross margin grew by 0.40 percentage points to 38.2 percent.
Revenues for the wholesale business decreased by 16.2 percent to $263.0 million, including a 19.7 percent decline in footwear and a 5.9 percent drop in accessories and apparel. The gross margin in the wholesale business narrowed to 28.3 percent from 29.2 percent in the fourth quarter of 2019 due to the disposal of excess inventory resulting from Covid-19 disruption.
Retail sales contracted by 14.9 percent to $86.1 million due to a significant decline in the brick-and-mortar business, partially offset by continued strength in the e-commerce business. Retail gross margin rose by 4.0 percentage points to 65.6 percent in the fourth quarter of 2020 from 61.6 percent a year earlier due primarily to less discounting.
Steve Madden ended the quarter with 218 company-operated retail locations, including seven internet stores and 17 concessions in international markets.
Overall operating expenses were reduced to 31.8 percent of revenues from 33.1 percent in the same period of 2019. Income from operations totaled $21.3 million, up from $19.5 million. But on an adjusted basis, income from operations slipped to $25.6 million from $33.0 million.
Net attributable profit was $22.6 million compared to $17.8 million, but adjusted net income dropped to $21.8 million from $32.2 million.
The chairman and CEO, Edward Rosenfeld, said that the pandemic continues to have a negative impact on the business, but nevertheless the fourth quarter “exceeded our expectations and showed strong sequential improvement from the third quarter.”
For the whole of 2020, revenues decreased by 32.8 percent to $1.2 billion. The net loss was $18.4 million compared with a $141.3 million profit in 2019. On an adjusted basis, the net profit was $51.8 million against $162.8 million.
Steve Madden decided to reinstate quarterly dividend payments, starting with $0.15 per share payable on March 26. But, due to the ongoing uncertainty caused by the pandemic, the company did not provide a full-year guidance.