Fashion-forward footwear maker Steve Madden (NASDAQ: SHOO)
stock has fallen back to April 2021 price levels. The popular designer stock is trading at just 17X forward earnings despite raising its fiscal Q4 2021 top and bottom line guidance
in November 2021. The Company reported the highest quarterly sales in its history in Q3 2021. Its wholesale business experienced supply chain
disruption as shipments were delayed into the fourth quarter. The Company is back on trend with its stylish products utilizing Gen-Z celebrities
including actors like Sydney Sweeney, Jordan Alexander and recording artists including Justine Skye, Normani and Nessa Barrett. Ecommerce
rose to 49% of retail sales. The recent selling
can provide prudent investors with opportunistic pullback levels to consider gaining exposure in this iconic footwear brand.
Fiscal Q3 2021 Earnings Release
On Nov. 3, 2021, Steve Madden released its fiscal third-quarter 2021 results for the quarter ended September 2021. The Company reported diluted earnings-per-share (EPS) profit of $0.82, beating consensus analyst estimates for $0.78 by $0.04. Revenues grew 52.4% year-over-year (YOY) to $528.7 million, beating of analyst estimates for $526.19 million. Steven Madden CEO Edward Rosenfeld commented, “In the third quarter, we delivered the highest quarterly sales and earnings in our history, as the trend-right merchandise assortments created by Steve and his design teams continue to drive strong consumer demand for our brands and products. Our retail segment was again the standout, with outstanding results in both digital and brick-and-mortar channels, and our wholesale business showed strong sequential improvement and is poised to return to growth in the fourth quarter compared to 2019. Looking ahead, we are confident that – based on the strength of our brands, business model and people – we are well-positioned to drive profitable growth and enhance value for our stakeholders over the long term.”
Upside Full-Year Guidance
Steve Madden raised its full-year 2021 EPS guidance between $2.30 to $2.35, up from $2.00 to $2.15 previous guidance, versus $2.13 consensus analyst estimates. The Company sees full year fiscal 2021 revenues to from 50% to 52%, up from 43% to 47% previous guidance.
Conference Call Takeaways
CEO Rosenfeld set the tone, “Our number one priority as always is to create trend-right product and get it to market ahead of our competition. And I could not be happier with our team's performance on that front. We have relied on our proven model, which combines our talented design teams led by Steve, our test and react strategy and our industry leading speed to market capability to deliver trend-right product assortments that are winning with the consumer and enabling us to outperform the competition and take market share, particularly in our flagship Steve Madden brand. We're also supporting this great product with increased investment in marketing. In addition to continuing to scale our digital marketing efforts to drive our e-commerce business, last month we also launched our largest brand campaign in years, called the Madden Verse, the campaign features 3D avatars of artists and social media favorites Normani, Sydney Sweeney, Nessa Barrett, Justine Skye and Jordan Alexander, bold, creative, empowered and authentic women that embody the spirit of the Steve Madden brand.” He continued, Another key priority is to grow our international business, and we also continue to make progress on that initiative. Earlier this year, we acquired the remaining 49.9% share that we did not already own of our European joint venture. And that business remains our leading international growth driver. Revenue for our directly operated SM Europe business increased 45% in the quarter, compared to 2019 despite significant wholesale shipment move outs to Q4, as we continue to have exceptional momentum in the region, particularly in digital channels. Finally, even as we seek to capitalize on the distribution channel and product category expansion opportunities I've touched on, we remain focused on strengthening the U.S. wholesale footwear business that is the core of our business. This business saw market improvement in the third quarter, as our wholesale customers reacted to our strong sell-through performance with increased orders.”
CEO Rosenfeld concluded, “Looking ahead to the fourth quarter, we are poised to deliver strong growth versus 2019 in the U.S. wholesale footwear business overall. As we do all of this, we also continue to embrace the opportunity and the responsibility we have to create positive change for our people in our communities. Highlights in the last three months included the establishment of a new employee resource group [indiscernible] the launch of our new partnership with the business school at Howard University to reimagine its retail curriculum and the launch of new collections for our Steve Madden kids adaptive line as well as for Cool Planet by Steve Madden.”
SHOO Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for SHOO stock. The weekly rifle chart peaked as the $51.57 Fibonacci (fib) level before triggering a daily market structure high (MSH) breakdown under $45.20. The weekly 5-period moving average (MA) is falling at $43.30 followed by the 15-period MA at $45.63 on the weekly stochastic mini inverse pup sinking to the 30-band. Shares fell through the weekly 50-period MA at $42.03 as weekly lower Bollinger Bands (BBs) sit at $35.72. The daily rifle chart downtrend has a falling 5-period MA at $41.00 and lower BBs near the $38.13 fib. The daily stochastic has a very low band mini inverse pup at the 8-band. The daily market structure low (MSL) buy triggers above $43.11, with upper BBs at $49.52. Prudent investors can watch for opportunistic pullback levels at the $38.13 fib, $36.80 fib, $35.38 fib, $33.45 fib, and the $31.20 fib. Upside trajectories range from the $46.89 fib up towards the $57.51 price level.
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