Here's Why Steven Madden Is on a Tear Since Q1 Earnings

Shutterstock photo

Steven Madden, Ltd. SHOO is leaving no stone unturned to boost the top and the bottom line. Notably, the company is focusing on efforts to expand globally and enhance product portfolio. The company, based in Long Island City, NY, continues to witness robust growth in the Wholesale Footwear and Accessories segments. Apart from these, a reaffirmed guidance instils optimism in the stock.

A glimpse at this Zacks Rank #2 (Buy) stock's performance reveals that it has surged roughly 22% in the past three months. The stock has not only outperformed the industry' s rise of 9.9% but also the overall sector 's 7.5%. Currently, the company's stock is trading near its 52-week high of $55.50 and there is a possibility that it will surpass the mark in the near term.

Factors Driving the Stock

Better-than-Expected Q1 Results

The company's adjusted earnings per share of 54 cents not only beat the Zacks Consensus Estimate of 50 cents but also increased 14.9% on a year-over-year basis. This upside can be primarily attributed to the rise in net sales of 6.2% to $389 million. The sales figure also exceeded the Zacks Consensus Estimate.

Notably, this marked the second straight quarter of earnings and revenue beat. Out of the trailing seven quarters, the company's earnings surpassed the consensus mark in five quarters and sales surpassed the same in all seven. Management continues to expect net sales growth of 5-7%. Adjusted EPS is expected in the range of $2.60-$2.67, indicating a rise from $2.24 in 2017.

Strong International Performance

The company, which shares space with Deckers Outdoor Corp. DECK , is consistently focusing to expand its business globally. Notably, in the first quarter, the company witnessed 36% revenue growth internationally. The company's directly-owned subsidiaries in Canada and Mexico, SM Europe JV as well as the distributor business posted strong results.

Steven Madden expects international business to sustain its momentum in 2018 on strategic investments. The company is optimistic about growth in the Middle East, Italy and India. The company expects Asia to be a major contributor to net sales despite the region posting marginally low figures in the first quarter.

Strong Wholesale Business

In the first quarter, the company witnessed growth of 5.8% in the wholesale business, courtesy of Wholesale Footwear and Accessories. Per management, core Wholesale Footwear business maintains a robust performance and will continue to do so in the future. Further, management expects the Wholesale Accessories business to keep up the momentum, courtesy of strength in Steve Madden handbag and owned-private label division.

Addition of Anne Klein Footwear and Handbags

The company signed an agreement to become the licensee for Anne Klein footwear and handbags this year in January. Management expects this addition to generate $80-$90 million in net sales in the first 12 months of shipping. The company projects breakeven in 2018, with profit contribution in 2019.

2 Hot Stocks to Watch

Columbia Sportswear Co. COLM delivered an average positive earnings surprise of 18.1% in the trailing four quarters. It has a long-term earnings growth rate of 11.1% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Fossil Group FOSL delivered an average positive earnings surprise of 54.1% in the trailing four quarters.It carries a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fossil Group, Inc. (FOSL): Free Stock Analysis Report

Deckers Outdoor Corporation (DECK): Free Stock Analysis Report

Steven Madden, Ltd. (SHOO): Free Stock Analysis Report

Columbia Sportswear Company (COLM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: FOSL , DECK , SHOO , COLM

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?