Q3 Earnings Preview for Steven Madden (NasdaqGS:SHOO)

in EARNINGS/INVESTING IDEAS by

Steven Madden, Ltd. (NasdaqGS:SHOO) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.21/share on revenue of $328.7 million. The consensus earnings per share (EPS) of $0.21/share is based on a poll of 13 analysts and represents a decline in eps of −69.2% over the same quarter last year, when the company reported earnings of $0.67/share.

The revenue forecast of $328.7 million based on a poll of 12 analysts implies a year-over-year (YoY) decline in revenue of −33.9%. Last year the company reported $497.3 million in revenue for the quarter.

Expected to report EPS contraction of −69.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $328.74 $497.31 −33.9%
EPS $0.21 $0.67 −69.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from Steven Madden, Ltd. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.27 -$0.19 29.0% Beat
Q1, 2020 $0.17 $0.16 −7.8% Missed
Q4, 2019 $0.39 $0.39 0% Met
Q3, 2019 $0.59 $0.67 14.5% Beat
Q2, 2019 $0.43 $0.47 9.0% Beat
Q1, 2019 $0.37 $0.42 15.0% Beat
Q4, 2018 $0.38 $0.42 9.8% Beat
Q3, 2018 $0.62 $0.65 5.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $22.08 $22.41 1.5% Increase
May 28, 2020 $25.78 $23.52 −8.8% Decline
February 27, 2020 $34.85 $32.70 −6.2% Decline
October 29, 2019 $35.86 $41.12 14.7% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.81, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.81 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Steven Madden, Ltd. is currently trading at $22.29/share, down −1.6% for the day. The company is trading at approximately 49.8% of its 52-week high of $44.80/share. The company’s stock price is down −0.5% since the last earnings report and up 5.9% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 58.77 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SHOO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 51.23 and a forward P/E multiple of 60.50.

Steven Madden, Ltd.’s current share price also implies a price-to-book (P/B) multiple of 2.45. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $22.29
P/E Ratio 51.2x
P/E Ratio (Fwd) 60.5x
PEG Ratio −0.7
Total Debt / Total Capital 9.3%
Levered Free Cash Flow $215.5 million
EV / EBITDA 17.8x

Finbox

Steven Madden, Ltd. is a small-cap stock with a market capitalization of $1.853 billion and a total enterprise value of $1.703 billion. The company operates in the Consumer Discretionary sector and the Textiles, Apparel & Luxury Goods industry.

Steven Madden, Ltd. designs, sources, markets, and sells fashion-forward name brand and private label footwear for women, men, and children in the United States and internationally. Its Wholesale Footwear segment provides footwear under the Steve Madden Women’s, Madden Girl, Steve Madden Men’s, Madden, Madden NYC, Report, Dolce Vita, DV by Dolce Vita, Mad Love, Steven by Steve Madden, Superga, Betsey Johnson, Betseyville, Steve Madden Kids, Stevies, GREATS, Blondo, and Anne Klein brands, as well as private label footwear. The company’s Wholesale Accessories segment offers Steve Madden, Steven by Steve Madden, Madden Girl, Betsey Johnson, Madden NYC, Big Buddha, DKNY, Anne Klein, Jocelyn, Luv Betsey, BB Dakota, Cupcakes & Cashmere, and accessories brands; private label fashion handbags and accessories to department stores, mass merchants, value priced retailers, online retailers, and specialty stores; and cold weather accessories, fashion scarves, wraps, and other trend accessories primarily under the Steve Madden, BB Dakota, Cejon, Betsey Johnson, and Big Buddha brand names, as well as private labels to department stores and specialty stores. Its Retail segment operates Steve Madden, Steven, Superga, GREATS, and International retail stores, as well as Steve Madden, Superga, Betsey Johnson, Blondo, Dolce Vita, BB Dakota, and Jocelyn e-commerce websites. The company’s Licensing segment licenses its Steve Madden, Steven by Steve Madden, Madden Girl, and FREEBIRD by Steven trademarks. Its First Cost segment operates as a buying agent for footwear products under private labels for mass-market merchandisers, shoe chains, and other mid-tier retailers. As of December 31, 2019, it owned and operated 227 retail stores, including 146 Steve Madden full-price stores, 68 Steve Madden outlet stores, 2 Steven stores, 2 GREATS stores, and 1 Superga store, as well as 8 e-commerce websites. Steven Madden, Ltd. was founded in 1990 and is headquartered in Long Island City, New York.

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