The company reported yesterday morning, and continues to impress with a 13 cent beat on EPS and mid 30% growth rates in revenue. If they can expand their footwear brand into a full line of clothing (always a risk) there could be even more growth potential for a much longer period of time. Looks like accessories already made up 16% of sales this quarter. At 16x forward estimates for 2010 it is not cheap but not necessarily expensive considering the growth rate.
Via Reuters:
- A fast-growing accessories and men's business helped Steve Madden (SHOO) top market expectations in the second quarter, and the shoemaker said it was seeing a lot of potential for growth outside footwear.
- Steve Madden's solid quarterly results prompted it to raise its 2010 outlook for the second time this year. The company, which primarily sells to 12- to 25-year-old girls, said it now expects 2010 earnings of between $2.45 and $2.55 a share, up from an earlier view of $2.30 to $2.40 a share. The company also raised its full-year view on sales growth to 22% to 24%, from 17% to 19% forecast earlier.
- For the second quarter, the company reported earnings of 70 cents a share, up from 44 cents a share, a year earlier. The company, whose lines include flagship brand Steve Madden, Stevies and Candies, saw sales jump 36% to $158.7 million during the quarter.
- Analysts were expecting the shoe maker to earn 57 cents a share, on revenue of $144.4 million in the quarter.
- Net sales at Steve Madden's wholesale unit grew 46.5% to $129.2 million, during the quarter.
- Operating margin reached 20.2% of sales in the second quarter of 2010, compared with operating margin of 16.6% in the same period of 2009.
- The company's wholesale accessories business grew 79% to $25 million during the second quarter ended June 30, driven by strong sales of its hand bags and private label belts, Chief Executive Edward Rosenfeld said on a conference call with analysts. The segment got a major fillip from Steve Madden's acquisitions of Madden Zone last year and Big Buddha hand bags in February this year, he added.
- "We are also bullish about the prospects of our licensing business," Rosenfeld said, adding that the company would launch a new category of "special occasion dresses" to be sold for $90 to $200 at 50 of Macy's top dress stores in the spring of 2011.