SHOO - Steve Madden stock surges despite mixed earnings result

Steve Madden ( NASDAQ: SHOO ) stock gained sharply on Thursday despite offering a mixed Q4 report and cautious 2023 guidance.

For the fourth quarter, an adjusted EPS report of $0.44 came in-line with expectations while $470.6M in revenue edged out consensus estimates. Gross profit as a percentage of revenue increased 100 basis points year over year.

“2022 was a record year for the Company, with double-digit percentage growth in both revenue and earnings, reflecting the power of our brands, the strength of our business model and the successful execution of our strategic initiatives,” CEO Edward Rosenfeld said. “Looking ahead, we are cautious on the near-term outlook due to the challenging operating environment and conservative initial Spring orders from our wholesale customers as they prioritize inventory control.”

The company was able to reduce inventory by about $27M from the prior year quarter.

For 2023, the company expects revenue will decrease 6.5% to 8% as compared to 2022, a steeper drop than the 3% expectation among analysts. Diluted EPS are projected to be in the range of $2.40 to $2.50, below the $2.61 consensus.

However, this conservative guidance appeared appropriate in the view of analysts, with both Telsey Advisory and Citi highlighting leaner inventory levels with an opportunity for margin expansion.

“The guidance may be within investors’ downside expectations, in our view, reflecting the challenging operating environment and more conservative initial spring orders from wholesale customers as macro uncertainties persist,” Telsey advised.

Shares of Steve Madden ( SHOO ) rose 6.62% on Thursday.

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