Factors to Know Ahead of Steven Madden's (SHOO) Q1 Earnings

Steven Madden, Ltd. SHOO is likely to register marginal improvement in the bottom line when it reports first-quarter 2019 numbers. Notably, this New York-based designer, marketer and seller of footwear and fashion accessories had reported solid earnings in the preceding four quarters and also comfortably surpassed the Zacks Consensus Estimate.

In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by average of 7.1%. In the last reported quarter, the company delivered positive earnings surprise of 10.5%.

Drawing focus back on the to-be-reported quarter, the Zacks Consensus Estimate for earnings is currently pegged at 37 cents, a penny higher than the year-ago quarter’s figure. We note that the Zacks Consensus Estimate has remained stable in the past 30 days. The Zacks Consensus Estimate for revenues is pegged at $404.9 million, up about 4.1% from the year-ago quarter. We note that the top and the bottom lines had increased 12.6% and 31.3%, respectively in the last reported quarter.

Factors Crucial to Steven Madden’s Performance

Steven Madden is leaving no stone unturned to boost the top and the bottom lines. Notably, the company is focusing on enhancing product portfolio. It is also taking several initiatives to expand globally. The company witnessed revenue growth of 24% internationally in 2018. The company’s directly-owned subsidiaries in Canada and Mexico, SM Europe JV, and the distributor business reported strong results.

Further, Steven Madden expects its international business to sustain momentum on strategic investments. The company is optimistic about growth in the Middle East, Italy and India. The company anticipates Asia to be a major contributor to net sales. The company has been witnessing robust growth in the Wholesale Footwear and Accessories segments.

However, cost of goods sold and operating expenses have increased that may weigh on margins. Additionally, the imposition of tariffs on additional consumer goods such as shoes, handbags and others imported from China, owing to US-China trade war may hurt business to an extent. Nonetheless, to lower its dependency on China, the company is gradually shifting its handbag production to Cambodia.

The company, on its fourth-quarter 2018 conference call, highlighted that the bankruptcy of Payless ShoeSource, its key private label customer, is a near-term headwind. Management also hinted that Payless ShoeSource bankruptcy and a higher tax rate (forecast to be 22% versus 18.9% in 2018) may hurt 2019 adjusted earnings by approximately 16 cents and 5 cents, respectively.

Steven Madden, Ltd. Price, Consensus and EPS Surprise


Steven Madden, Ltd. Price, Consensus and EPS Surprise | Steven Madden, Ltd. Quote

What the Zacks Model Unveils?

Our proven model does not conclusively show that Steven Madden is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Steven Madden has a Zacks Rank #4 and an Earnings ESP of 0.00%, which makes surprise prediction difficult.  

3 Stocks With a Favorable Combination

Here are three other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Best Buy BBY has an Earnings ESP of +2.06% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Five Below FIVE has an Earnings ESP of +0.31% and a Zacks Rank #3.

Tiffany TIF has an Earnings ESP of +0.60% and a Zacks Rank #3.

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


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