Forget about recovery. Steven Madden Ltd. posted profits and revenues that exceeded its pre-pandemic performance.
The New York-based shoe company made its highest quarterly sales and profits in company history on Wednesday. For the third quarter, revenue increased 52.4% to $ 528.7 year-on-year and increased 5% from 2019. Net income was $ 66.6 million, or 0 , $ 82 per diluted share, up 22% from 2019.
Shares of Steve Madden surged after the results on Wednesday and hit 9% by late afternoon.
Even amid head winds in the global supply chain, Steve Madden has managed to achieve a quarter of his record growth. According to analysts, its success will likely be even greater once the delays and traffic jams are eliminated.
âWhen headwinds in the supply chain abate, [the companyâs] Industry-leading speed to market, combined with Steve Madden’s chameleon ability to deliver trending products and develop a loyal following, will result in profitable revenue growth and share gains. additional, âWilliams Trading analyst Sam Poser wrote in a note.
Here are three factors that prepare Steve Madden for long-term growth:
Expansion outside of shoes
Steve Madden is focused on expanding his business beyond footwear into other high growth categories such as handbags and clothing.
In a call to investors, CEO Edward Rosenfeld said the company’s handbag category is expected to grow by around 20% for the full year compared to 2019, including more than 100% growth in DTC channels. In apparel, the BB Dakota by Steve Madden brand is showing signs of strong selling for dresses, shirt jackets and vegan leather products in major wholesale accounts.
âThe growth of our handbag is pretty explosive,â Rosenfeld said. âIt goes beyond what we see in shoes, and we’re really excited about this momentum in handbags, especially in direct-to-consumer channels. “
Strength in dress code
As parties and social gatherings return, dress shoes are making a major comeback. According to Rosenfeld, penetration in the dress shoe category is above 2019 levels. And while other brands continue to flood the dress category, Steve Madden has continued to perform well.
âOpen dress, closed dress, different heel heights, that’s just a fantastic category for us,â Rosenfeld said, âand especially in our direct-to-consumer channels, really a big driver.â
However, when it comes to dress shoes at work, Rosenfeld said the company is still not where it was before the pandemic.
Steve Madden is also making new investments in marketing to drive digital growth.
In October, the company launched âMaddenverse,â a brand campaign that features 3D avatars of artists and influencers such as Normani, Sydney Sweeney, Nessa Berat, Justine Skye and Jordan Alexander. The campaign, which includes an augmented reality shoe trial feature, is intended to connect with consumers and drive the digital growth of DTCs.
According to Rosenfeld, consumer response has been strong in terms of social media engagement and research interest, which has boosted sales.
âWe are excited about the new campaign and are really excited about the response,â said Rosenfeld. “We just felt like, given the brand warmth that we have at Steve Madden and this really, really strong product assortment and what we see in the whole brand, now is the time to throw some gas on it and really step up with some exciting marketing.