SHOO — Steven Madden, Ltd.

Summary of Steven Madden, Ltd. Q4 and Full Year 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Financials:

  • Consolidated revenue: $753.7 million, up 29.4% YoY (excluding Kurt Geiger, revenue decreased 1.4%).
  • Wholesale revenue: $433.3 million, up 7.5% YoY (down 2.6% excluding Kurt Geiger).
  • Direct-to-consumer (DTC) revenue: $316.6 million, up 79.9% YoY (up 1.6% excluding Kurt Geiger).
  • Gross margin: 43.8%, compared to 40.4% in Q4 2024.
  • Operating income: $50.9 million (6.8% of revenue), down from $52.6 million (9% of revenue) YoY.
  • Net income: $34.3 million ($0.48 per diluted share), down from $39.3 million ($0.55 per diluted share) YoY.

• Full Year 2025 Financials:

  • Total revenue: $2.5 billion, up 11% YoY (down 6.6% excluding Kurt Geiger).
  • Net income: $120.9 million ($1.70 per diluted share), down from $192.4 million ($2.67 per diluted share) in 2024.
  • Inventory: $417 million, up from $257.6 million YoY.

2. Strategic Updates and Business Highlights

• Core Business Performance: The Steve Madden brand saw a significant recovery in Q4, particularly in women's footwear, with strong demand continuing into early 2026.
• Kurt Geiger Acquisition: Closed on May 6, 2025, with pro forma revenue growth of 11% expected in 2026. Integration is progressing well, and Kurt Geiger is seen as a key growth driver.
• Dolce Vita Growth: The brand has expanded into international markets and adjacent categories like handbags, with expected high single-digit revenue growth in 2026.
• Marketing Strategy: Enhanced marketing efforts aimed at Gen Z and millennials, with a focus on storytelling and product quality, leading to increased brand engagement.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to increase by 9% to 11% compared to 2025, with Q1 2026 revenue expected to grow by 15% to 17%.
• Private Label Challenges: Anticipated to decline nearly 20% in 2026 due to tariff impacts and price sensitivity in the mass channel.
• SG&A Expectations: Higher SG&A costs anticipated due to normalization of incentive compensation and executive salaries.

4. Bad News, Challenges, or Points of Concern

• Tariff Impacts: The company faces significant pressure from new tariffs affecting cost structures, particularly in the private label segment, which is expected to see a substantial revenue decline.
• Private Label Revenue Decline: Revenue decreased by 15% in 2025, with further declines expected in 2026, attributed to price sensitivity and lack of brand leverage.
• SG&A Growth: Operating expenses increased significantly in 2025, and further growth is expected in 2026 due to various factors, including warehouse fulfillment costs and executive compensation.

5. Notable Q&A Insights

• Guidance Uncertainty: The company refrained from providing earnings guidance for 2026 due to tariff-related uncertainties, emphasizing the need for clarity before making commitments.
• Sourcing Strategy: The company has diversified its sourcing away from China, which previously accounted for over 70% of its footprint, now reduced to the high 30s, with plans to continue this trend.
• Private Label Business: Management expressed confidence that the decline in private label is temporary, based on historical patterns of customer return after initial declines.
• DTC Performance: Strong growth in e-commerce and full-price channels, while outlet performance remains weak but shows signs of improvement.

Overall, Steven Madden, Ltd. demonstrated resilience in its core business despite external challenges, with strategic initiatives in place to drive future growth, particularly through the integration of Kurt Geiger and expansion of the Dolce Vita brand. However, significant headwinds from tariffs and private label performance remain key concerns.