Steven Madden (SHOO) Stock Forecast & Price Target

The analysis of Steven Madden Ltd indicates a positive financial outlook driven by several key metrics. Retail revenue, excluding the Kurt Geiger acquisition, rose by 1.5% year-over-year, while direct-to-consumer (DTC) sales surged by 76.6%, reflecting strong consumer demand and pricing strategies that have effectively increased average unit retail (AUR) in the mid-teens. Additionally, while wholesale revenue experienced a decline of 10.7%, improvements in the licensing segment, which grew by 4.9%, and the projected growth in the legacy business set the stage for a favorable trajectory in the upcoming quarters.

Steven Madden Ltd is experiencing a significant decline in its wholesale footwear sales, which contracted by 10.9% year-over-year to $267 million, falling short of both internal estimates and consensus expectations. Additionally, operating expenses as a percentage of sales increased 850 basis points to 36.4%, which is worse than anticipated, indicating potential inefficiencies. Furthermore, the projected sales growth for Q4 includes expectations of a 2%-4% year-over-year contraction in the legacy business, reflecting ongoing challenges despite gains in direct-to-consumer revenue driven by the recent acquisition of Kurt Geiger.