Dive Brief:
- Steve Madden reported a revenue decrease of 16.8% year over year when it announced its Q2 earnings on Wednesday for the quarter ended June 30. Revenue was $445 million for the period, versus $535 million for the same period last year.
- Wholesale revenue dropped 21% to $315 million compared to Q2 last year, a decline which included a 19% slip in wholesale footwear revenue and a 25% decrease in wholesale accessories/apparel revenue, per the company release.
- DTC revenue was down 5% for the quarter to $128 million year over year, which the company attributed to declines in both its brick-and-mortar and e-commerce businesses.
Dive Insight:
Edward Rosenfeld, chair and CEO, said the earnings were in line with Q2 expectations despite the challenging operating environment.
“Our performance in the quarter reflects our disciplined control of inventory and expenses, even as we continue to invest in product innovation, consumer engagement and our long-term growth initiatives,” Rosenfeld said in the release. “While the retail environment remains choppy, we are confident that the power of our brands and the strength of our business model position us for sustainable growth and value creation over the long term.”
The trendy fashion firm, which in addition to the Steve Madden brand owns Dolce Vita, Betsey Johnson, Blondo, Greats and BB Dakota, is also a licensee of brands such as Anne Klein.
On the earnings call with analysts, Rosenfeld said the company’s branded business was down, “though not as dramatically as private label as our branded customers also continue to take a conservative approach to orders.”
He said that although “several key styles” were seeing strong sell-through, the company’s wholesale customers “did not chase business in those styles the way they normally would, and reorders were significantly lower than we would see in a more typical retail environment.”
Part of the company’s long term growth strategy included more DTC business, and expanded offerings in handbags and apparel, Rosenfeld said.
“As we move forward, we will remain focused on executing our strategy for long-term growth, the foundation of which is driving closer connections with consumers through the combination of consistently trend-right product assortments and effective consumer engagement,” Rosenfeld said, stating that the company also wanted to grow in international markets and strengthening its core U.S. wholesale footwear business.
Steve Madden ended the quarter with 242 brick-and-mortar retail stores and five e-commerce websites, as well as 22 company-operated concessions in international markets, per the earnings call.
Last quarter, the company reported a Q1 revenue decrease of 17.1% year over year, and in its Q2 earnings it maintained a soft outlook for the rest of 2023, saying it expected overall revenue for the year to decrease 6.5% to 8.0% compared to 2022.
