SHOO - Steve Madden steps back guidance despite Q3 earnings beat

Steven Madden ( NASDAQ: SHOO ) cobbled together a mixed earnings report on Wednesday, but warned on wholesale demand deceleration ahead.

For the third quarter, the footwear manufacturer notched a beat on top and bottom lines, led by strong wholesale growth. The 8.1% jump in wholesale revenue helped offset mild deceleration in the direct to consumer business.

“We delivered solid results in the third quarter despite the challenging environment, with revenue increasing 5% and earnings in line with expectations,” CEO Edward Rosenfeld said. “Consumer demand for our brands and products remains healthy, and our direct-to-consumer business continues to trend in line with previous expectations.”

However, the wholesale customers that had carried the bulk of Q3 revenue is expected to decelerate into Q4. Rosenfeld explained that elevated inventory levels among retailers are leading many to cut back on orders, necessitating a reassessment of full-year guidance.

The New York-based footwear company now expects revenue will increase 12.5% to 13.5% from the prior year, down from a prior expectation of 13% to 16%. Meanwhile, adjusted diltued EPS is forecast to be in the range of $2.77 to $2.82, trimmed from $2.90 to $3.00 projected in the previous guide. Analyst consensus had stood at $2.89.

“While we expect the macroeconomic backdrop to remain unpredictable in the coming quarters, we believe we are well-positioned due to our strong brands, agile business model and proven ability to navigate difficult market conditions,” Rosenfeld concluded.

Read more on the details of the quarter .

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