SHOO - Loop Capital steps to the sidelines on Steve Madden

Loop Capital downgraded Steve Madden ( NASDAQ: SHOO ) to “Hold” on Tuesday amid the expectation of slower sales into the close of 2022 and into 2023.

“We are increasingly cautious in Q4 and beyond given the slower sales pace the company has experienced since June and persistent inflation,” Director of Research Lauren Champine wrote in a note to clients. “We think sell-side consensus may not fully reflect a macro slowdown next year.”

Champine now anticipates a flat year over year revenue report in 2023, as consumers pull back on discretionary spending overall.

“SHOO's business model relies on quickship inventories. This makes sense for retail customers as they continually seek to better manage working capital,” Champine added. “An unfortunate side effect of the business model is that SHOO sees a shift in trends faster than many industry participants. This dynamic should benefit SHOO on the way out of the current malaise. For now though, despite a reasonable valuation on even our lowered estimates, we'd rather get out of the way as estimates seem poised to decline.”

Alongside the downgrade to “Hold”, she lowered her price target to $30 from $40.

Read more on the company’s latest earnings results .

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