Shoe and fashion accessories retailer Steven Madden Ltd.’s (SHOO) shares slipped 2.4% in the trading session on Jan 9, after the Long Island City, NY-based company reported soft preliminary sales results for the fourth quarter fiscal 2014 on the same day.
Net sales in the fourth quarter remained flat with the year-ago quarter at $342.6 million as year-over-year gain in the retail division was offset by a decline in the wholesale division. Sales, however, surpassed the Zacks Consensus Estimate of $340.0 million by 1%. Net sales for the wholesale division slipped 0.9% to $270.9 million. Retail net sales grew 3.2% to $71.7 million. Comps for the quarter declined 2.3%.
For 2014, net sales went up 1.6% year over year to $1.3 billion and came in line with the Zacks Consensus Estimate. Wholesale net sales grew 2.2% to $1.1 billion. However, retail net sales decreased 1.7% to $206.0 million as comps declined 8.1%.
Steven Madden made several strategic investments in fiscal 2014. In March 2014, it revamped its website which offers a much improved experience on mobile and tablets and innovative social media integration. Moreover it made several acquisitions of brands like Dolce Vita and Brian Atwood apart from the formation of a joint venture in South Africa. Although management expects these steps to boost sales in the future, management is skeptic about the fourth quarter and fiscal 2014 earnings results.
Guidance for 2014
Soft sales in the West Coast port and Dolce Vita division prompted the management to lower its fiscal 2014 earnings view.
For 2014, Steve Madden now expects earnings per share in the range of $1.75 to $1.76 compared with $1.81 to $1.86, expected previously.
Steven Madden currently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks in the same sector include Deckers Outdoor Corp. (DECK) and Brown Shoe Co. Inc. (BWS). While Brown Shoe sports a Zacks Rank #1 (Strong Buy), Deckers carries a Zacks Rank #2.
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