Steve Madden is off to a strong start in 2019, with results for the first quarter exceeding the company's expectations. The flagship Steve Madden brand was the highlight of the quarter, with robust increases in its wholesale footwear and accessories businesses, as well as a strong performance on stevemadden.com.
Overall, the company's revenues jumped by 5.6 percent from the year-ago quarter to $410.9 million, while net income soared by 20.2 percent to $34.5 million. This led the company to raise its sales guidance for the full year. It now expects revenues to increase by 5 to 7 percent in 2019, compared with a previous guidance calling for an increase of 4 to 6 percent.
During the quarter, wholesale revenues went up by 5.1 percent to $348.1 million, driven by strong growth in wholesale accessories. Wholesale revenues from footwear rose slightly, as strong growth in Steve Madden and the addition of Anne Klein was mostly offset by sales to the bankrupt Payless ShoeSource shoe retail chain that were not recognized in the period.
As previously reported, Payless announced in February the liquidation of all its 2,500 North American stores in a Chapter 11 bankruptcy filing. Steve Madden had been working with the discount footwear retailer for a long time.
Steve Madden's gross margin in the wholesale segment increased by 1.9 percentage points to 34.5 percent, with the margin improvement in footwear partially offset by a decline in accessories.
In the retail segment, Madden's revenues rose by 8.6 percent to $62.8 million, and same-store sales went up by 6.3 percent, driven by strong performance in the company's e-commerce operations. The gross margin climbed by 1.8 percentage points to 58.5 percent, due to margins online. The group ended the quarter with 225 company-operated retail stores, plus seven e-commerce sites and 33 directly operated concessions in foreign markets.
The company's overall gross margin went up by 2.0 percentage points to 38.2 percent.
The management said it expects again to book double-digit sales growth outside the U.S., driven by gains in the SM Europe joint venture, its directly owned subsidiary in Mexico and its new joint venture in Israel.