Steven Madden Q1 Earnings Call Highlights

Key Points

• Revenue rose 18% to $653.1 million largely due to the acquisition of Kurt Geiger, but organic sales declined 4.8% as weakness in private label and Steve Madden handbags offset strength; DTC revenue jumped 83.8% (8% ex‑Kurt Geiger).
• Gross margin improved meaningfully (to 46.3%, +540 bps), yet operating income and EPS fell to $46.3 million and $0.45 respectively due to higher operating expenses from the acquisition, incentive comp and warehouse costs.
• The company raised fiscal‑2026 revenue guidance to +10–12% and introduced EPS guidance of $2.00–$2.10, citing Kurt Geiger momentum while building in tariff, freight pressures and an estimated $9–10M revenue hit from Middle East disruptions.

Steven Madden NASDAQ: SHOO reported first-quarter fiscal 2026 results that management described as a “solid start” to the year, driven by trend-right product and increased marketing investment across its brand portfolio. While reported revenue rose sharply due to the Kurt Geiger acquisition, executives noted that organic sales declined amid ongoing softness in private label and lower Steve Madden handbag revenue in U.S. wholesale. The company raised its full-year revenue outlook and introduced earnings-per-share guidance, citing momentum across its three largest brands.

Brand momentum led by Steve Madden and Kurt Geiger

Chairman and CEO Ed Rosenfeld said demand trends were “healthy” across the portfolio, with the Steve Madden brand gaining momentum as assortments resonated with consumers across casuals, dress shoes, and boots. Rosenfeld pointed to trends including “split toes, Velcro, hidden wedges, mesh, and ballet-inspired looks.”

He also highlighted increased marketing effectiveness, including the company’s “Hello Spring” campaign, and said those efforts supported new customer acquisition and cultural relevance. Rosenfeld said online searches for Steve Madden increased 27% during the quarter, while global direct-to-consumer (DTC) comparable sales rose 6%, or 10% excluding stores in the Middle East. For the year, the company maintained its expectation for mid- to high-single-digit revenue growth in the Steve Madden brand.

Kurt Geiger London delivered another strong quarter, with management citing strength in handbags—particularly the Kensington collection alongside newer tote and shoulder bag styles—and strong performance in sandals, including Meena Eagle slides. Rosenfeld said the company now expects mid-teens pro forma revenue growth for Kurt Geiger in 2026 after raising its forecast, and noted progress on expansion initiatives, including leases secured for four new full-price stores and one premium outlet in the U.S. in 2026. The company also signed a franchise and distribution agreement with Reliance Brands to bring Kurt Geiger to India beginning in the fourth quarter.

On Dolce Vita, Rosenfeld said spring assortments performed well, with strength in “jelly, raffia, and woven styles” across footwear and handbags and robust sell-through at wholesale partners including Nordstrom, Dillard’s, and Macy’s. The company reiterated an expectation for high-single-digit revenue growth for Dolce Vita in 2026.

Q1 revenue up 18% on acquisition, while organic sales declined

CFO and EVP of Operations Zine Mazouzi reported consolidated revenue of $653.1 million, up 18% year over year. Excluding Kurt Geiger, which was acquired in the second quarter of 2025, consolidated revenue decreased 4.8%.

Wholesale revenue was $443.6 million, up 1% year over year, but down 8.2% excluding Kurt Geiger. Mazouzi said wholesale footwear revenue fell 5.8% to $278.9 million (down 12% excluding Kurt Geiger), “primarily driven by a steep decline in the private label business.” Wholesale accessories and apparel revenue rose 15.1% to $164.8 million, but decreased 0.5% excluding Kurt Geiger as declines in Steve Madden handbags and private label were mostly offset by gains in other branded categories.

DTC revenue increased 83.8% to $206 million. Excluding Kurt Geiger, DTC revenue increased 8%, with growth in both stores and e-commerce. Mazouzi said Steve Madden brand U.S. DTC comparable sales rose 17% driven by full-price channels, while outlet comps were “modestly negative” but improved sequentially as the company began to lap declines in border stores. International comp sales decreased 5%, but increased 1% excluding the Middle East. The company ended the quarter with 387 company-operated stores (including 95 outlets), eight e-commerce websites, and 162 company-operated concessions in international markets.

Margins improved, but operating income and EPS declined

Gross margin improved meaningfully in the quarter. Mazouzi reported consolidated gross margin of 46.3%, up 540 basis points from the prior year. Wholesale gross margin rose to 39.2% from 35.7%, which management attributed to higher average selling prices, mix benefits from Kurt Geiger, and lower private label penetration. DTC gross margin was 60.8% compared with 60.1% a year earlier, reflecting the addition of Kurt Geiger and a modest improvement in the organic business.

Operating expenses rose to $256 million, or 39.2% of revenue, compared with $170.5 million, or 30.8% of revenue, in the prior-year quarter. Mazouzi said the increase was driven primarily by the addition of Kurt Geiger, as well as higher incentive compensation and warehouse expenses.

Operating income was $46.3 million, or 7.1% of revenue, compared with $56.1 million, or 10.1% of revenue, in the first quarter of 2025. Net income attributable to Steven Madden, Ltd. was $32.1 million, or $0.45 per diluted share, compared with $42.4 million, or $0.60 per diluted share, a year earlier.

In response to analyst questions, Rosenfeld provided additional profitability detail by segment, citing wholesale footwear EBIT of $52.7 million, wholesale accessories and apparel EBIT of $28.8 million, and a DTC loss of $11.4 million. He said DTC typically runs at a loss in the first quarter due to seasonality, including for Kurt Geiger.

Guidance raised, with tariffs and freight costs incorporated

Mazouzi said the company raised its fiscal 2026 revenue outlook and now expects revenue to increase 10% to 12%, up from prior guidance of 9% to 11%. The company also introduced EPS guidance, calling for earnings per share of $2.00 to $2.10 for the year.

Rosenfeld said the higher revenue outlook reflects increased expectations for Kurt Geiger after it “exceeded our expectations in Q1,” as well as “modestly” higher expectations for Steve Madden and Dolce Vita based on strong spring performance. He also discussed ongoing pressure in private label, saying the company is still expecting a “pretty steep decline in 2026” and is “targeting 2027 for recovery.”

On tariffs, Rosenfeld said the company assumed 10% Section 122 tariffs remain in effect through about the end of July and built in a 15% tariff thereafter. On freight, Mazouzi said the company built approximately 30 basis points of pressure into guidance from higher ocean and air freight costs, including emergency bunker surcharges that began May 1, with another potential round in July.

Rosenfeld added that the company has been able to reduce promotional days in DTC due to strong demand, saying it has not seen a meaningful impact to demand from that pullback.

Balance sheet, capital allocation, and regional headwinds

As of March 31, 2026, Mazouzi said the company had $286.5 million of debt and $77.2 million in cash and cash equivalents, for net debt of $209.3 million. Inventory was $379.4 million compared with $238.6 million a year earlier; excluding Kurt Geiger, inventory decreased 2.5%. Capital expenditures were $5.9 million during the quarter.

The company did not repurchase shares in the open market, but spent $7.4 million on shares acquired through net settlement of employee stock awards. The board approved a quarterly cash dividend of $0.21 per share, payable June 19, 2026 to stockholders of record as of June 8, 2026.

Discussing cash priorities, Rosenfeld said the “first priority would be to accelerate the pay down of the debt,” with potential share repurchases assessed in the back half of the year.

Management also addressed the impact of conflict in the Middle East on results and outlook. Rosenfeld noted the company previously had “north of $50 million” in business in the region across about 63 stores, and said the company built roughly $9 million to $10 million of revenue impact into guidance related to the region, along with about a $4 million profit hit.

Looking ahead, Rosenfeld said the company expects to return to earnings growth in the second quarter and deliver “strong top and bottom line growth for the full year,” supported by brand momentum and operational execution.

About Steven Madden NASDAQ: SHOO

Steven Madden, Inc NASDAQ: SHOO is a New York–based designer and marketer of fashion footwear, handbags and accessories. The company's product portfolio spans a range of contemporary and lifestyle brands for women, men and children, including its core Steve Madden label as well as the Madden Girl and Dolce Vita brands. In addition to footwear, the company licenses its trademarks for use on apparel, eyewear and other fashion accessories.

Steven Madden distributes its products through multiple channels, including wholesale partners, e-commerce platforms and its own brick-and-mortar retail stores.

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