Steven Madden has reported a decline in third-quarter profit, despite growth in revenue and continued consumer demand for its core footwear brands.
The company’s revenue rose 6.9 per cent to $667.9 million, up from $624.7 million the previous year.
Net income attributable to the company fell to $20.5 million, down from $55.3 million in the same period last year, and gross profit margin remained flat at 41.5 per cent.
Operating income dropped to $31.4 million, from $74.6 million, year-on-year, and operating expenses rose to 36.8 per cent of revenue, compared to 28.6 per cent in the same quarter of last year.
“As anticipated, the third quarter was challenging, driven largely by the impact of new tariffs on goods imported into the US,” said Edward Rosenfeld, chairman and CEO.
“That said, we are pleased with underlying demand for our brands and products.
“Consumers have responded favorably to our fall assortments, particularly in our flagship Steve Madden brand.
“The improved trend in Steve Madden, together with our tariff mitigation strategies and the contribution from our recent acquisition Kurt Geiger, position us to deliver stronger financial results beginning in the fourth quarter.”
Wholesale revenue fell 10.7 per cent to $442.7 million from the same period last year.
Wholesale footwear revenue dropped 10.9 per cent, while wholesale accessories and apparel revenue decreased 10.3 per cent.
Wholesale gross margin declined to 32.7 per cent from 35.5 per cent, with adjusted gross margin at 33.6 per cent, reflecting tariff impacts on imported goods.
Direct-to-consumer revenue rose 76.6 per cent to $221.5 million, driven largely by the Kurt Geiger acquisition.
Gross profit margin in the segment fell to 58.3 per cent from 64 per cent a year earlier, while adjusted gross margin was 61.9 per cent, down from 64 per cent, also affected by tariffs and the addition of Kurt Geiger’s concessions business.
At the end of the quarter, the company operated 397 retail stores, including 99 outlets, along with seven e-commerce sites and 133 international concessions.
