Steven Madden, Ltd. (SHOO) Earnings

Management highlights

- Steve Madden brand had healthy demand with on-trend assortments, marketing campaigns like Hello Spring drove new customer acquisition. - Kurt Geiger London had strong quarter with handbags and shoes performing well, made progress on growth initiatives like store openings and India expansion. - Dolce Vita had compelling spring assortment with strength in certain styles, gained traction with key growth initiatives. - First quarter had organic revenue decline due to soft private label and Steve Madden handbag revenue, but expected earnings growth in second quarter and full year.

Guidance

- Raised revenue outlook to 10% to 12% from prior 9% to 11%. - Introduced EPS guidance for the year, expecting earnings per share in the range of $2 to $2.10.

Segment performance

Steve Madden brand: Global DTC comp sales rose 6% in Q1, excluding stores in the Middle East it was 10%. For the year, mid- to high-single-digit revenue growth is expected. Kurt Geiger London: Revenue increased 23% on a pro forma basis in Q1, and mid-teens pro forma revenue growth is expected for the year. Dolce Vita: Delivered a strong spring assortment, drove robust sell-through with key wholesale customers, and high single-digit revenue growth is expected for 2026.

Risks & headwinds

- Tariff picture remains uncertain with assumed tariffs in guidance. - Rising energy prices could impact costs. - Conflict in the Middle East impacts business in that region.

Analyst Q&A

• Q: Hey, guys. If you can talk about what's driving the higher revenue guidance for the year. I think you said it was Kurt Geiger, but any detail you can give in the core versus Kurt Geiger? in terms of what has changed in your full year outlook. And then can you talk about the conversations you're having with private label customers and if there's been any change in how they're thinking as the tariff picture evolves? And then also just curious what you build in for tariffs within your guidance.

  A: Sure. Okay. All right, so the first question was about the higher revenue guidance. And yes, we did raise Kirk Geiger based on the early momentum that we're seeing there. The Kirk Geiger brand exceeded our expectations in Q1. We've also modestly raised our expectations for Steve Madden and Dolce Vita based on the strong performance that we're seeing there in spring and the momentum in those brands. So a positive picture because we were able to increase our forecast for each of our three largest brands. In terms of the private label conversations, I would say we're having a lot of conversations. I think they're productive, but the tariff picture remains uncertain. And so there's no major change to that situation right now, but it's something we're working hard on. We have taken our forecast up very modestly for the year based on some orders that we got for the tail end of the year, but obviously still looking at a pretty steep decline in 26 and really targeting 27 for recovery there. And in terms of what we've built into the guidance, so we have assumed the section, the 10% section 122 tariffs remain in effect. through about the end of July when those expire, and then we've built in a 15% tariff thereafter.

• Q: Your line is open. Great, thank you so much for taking our question and Congrats a really nice to see the momentum Curious on also what you're hearing from your partners Specifically to the off price channel is that channel now back to growth and how do you think about the contribution there? And it sounds like department store business is turning very quickly with agree orders are you guys able to fulfill that demand and Just any color on that would be great. And secondly, you mentioned the business back to earnings growth starting the second quarter. Just anything you can share how we should think about 2Q. Is the DTC business, which was super strong in 1Q, is that further accelerating from here? Thanks so much.

  A: Sure. Okay, so in terms of the off-price channel, yeah, those – Those businesses were seeing some nice improvement there. Those conversations have been very productive recently. And so we are seeing growth in that channel in 2026 versus 2025. Still not all the way back to 24 levels, as opposed to your second question was about department stores. There we are seeing strong growth. To your point, we're getting reorders. We are able to chase into goods for them. And we do expect that first-tier business to exceed what we achieved in 2024. And then what was the third one? Do you expect ETC to accelerate? Oh, yeah. So, yeah. So, we're not going to guide quarterly, but I will say that we continue to see – to strong trends in that DTC business. Now, the overall DTC growth, of course, won't be as strong because we'll be anniversarying Kirk Iger starting in early May, but the core business or the organic business should see similar trends to what we saw in Q1.

• Q: Hey, guys. Congratulations. The assortments have looked absolutely fantastic. I'm curious if you could just talk a little bit more about the sell-throughs at the department stores. Are you seeing that across footwear and the apparel? And the apparel has looked really fantastic as far as I have seen. Could you talk a little bit about, I guess, how big that business can be and what the margin implications are, other margins on the apparel, equal or better to what you're seeing in footwear and how that could play out over time?

  A: Yeah, so we've been pleased with what we've seen from a sell-through perspective. I would say in spring, footwear has been stronger because the Steve Madden brand in particular has been quite hot in footwear. Apparel, we had a little bit of a soft start to the year. I don't think we transitioned as well as we could, but once we got into the season, we've seen... We've been very pleased with what we've seen. The team's done a great job with, you know, obviously dresses has been our biggest category. We've got some very strong dresses, but we've also got some novelty denim that's been selling, some blazers. So, you know, we continue to sort of expand, you know, broaden out the strength in that business and very optimistic about what that can be longer term. In terms of how big that business is, it's over a couple hundred million now for us in apparel. As of now, it is lower margin than the shoe and bag business. But we've been in investment mode and we're still building. And over time, we think that should have comparable margins.

• Q: Hi, good morning, everyone, and nice to see the progress. With rising energy prices, is there any impact on costs and how you're planning or the contracts all taking care of it for it, or how do you think of that impact on rising energy prices? And then the cadence of the quarter, was there any difference in demand on the exit of the quarter? And we've now seen just lastly on product trends, boots become like a 52-week-a-year trend. Any updates on product trends, whether sneakers, fashion, sandals, boots, to discuss?

  A: Sure. Yeah, I'll take the latter two questions and then turn it back to Zine to talk about what we're seeing on freight. So in terms of the cadence of the quarter, it was, you know, it bounced around a little bit based on weather and Easter shift and promotion time, et cetera. But basically I would say that it was pretty strong trends throughout the quarter and there's nothing super meaningful to call out there. In terms of the product trends, you know, I think the big thing is, you know, we've seen a decrease in penetration in sandals and sneakers. And we've seen super strong performance in casuals and really strong increases in dress shoes as well, and also in boots and booties. And as you correctly pointed out, those continue to be important even in spring. We did a really nice job, for instance, in our DTC with boots for festival season. So, Zin, you want to talk about freight? Sure. So on the freight side, obviously, the war impact is visible and we started seeing what they call EBS. These are emergency bunker surchargers that are being imposed by the maritime companies. So in our guide we built in about 30 basis points of pressure from ocean as well as the increase we're seeing on air freight as well. So we started seeing air freight as probably as early as April, and then as far as the ocean side, the emergency bunker surcharges, those started in May, on May 1st, and there's another round potentially that would be coming in July as well. So all in all, it's about a 30 basis point impact. From a cost perspective, as far as raw materials, we're not seeing that yet, but if this continues for an extended period of time, we expect that that will have an impact in the latter part of the year.

• Q: Thank you for taking my questions. A couple things. When we think about the gross margin more holistically for the balance of the year, in the press release, you backed out $55 million of the refunds out of the gross margin. How much of the refunds affected for the goods sold in Q1 were in it? And then going forward, I guess the question is, you're not going to see the same, you're not planning to see, what kind of increase in gross margin are we planning to see for the full year, taking into account the lower tariffs than what was true, lower than the AIPA tariffs, but then also the increase plus that 30 bps from freight. I mean, how should we think about the gross margin? And then I have another question.

  A: Yeah, sure. So in the first quarter, obviously, there was a relatively modest negative impact from tariffs because of the reversal of IEPA and then the institution of the Section 122. As we go forward, obviously, we'll see on a gross basis a bigger impact than we saw in Q1. But if you're thinking about gross margin versus the prior year, you know, we still should be seeing, you know, nice increases versus the prior year each quarter, although it will narrow a little bit in terms of the delta. You know, part of that is that we anniversary Kirk Iger in Q2, which has been, you know, which has been a mixed benefit to gross margin. But even in the organic basis, we do expect to see year-over-year gross margin improvement through the balance of the year.

• Q: Hi. Good morning. I'm Kurt Geiger with the mid-teens growth of the brand. Just wanted to clarify, does that include any new distribution? And if not, how are you thinking about that? And then Steve Madden-Hambach, can you elaborate a little bit more what's going on there? Would you still expect it to turn positive in the second quarter?

  A: Yeah, in terms of the Kirk Iger brand mid-teens growth, we are adding some wholesale distribution in the back half. I think that the most important being that we are planning to, we have reached agreement with Macy's to enter Macy's starting in October. We'll be in a beautiful concession in Herald Square. as well as 15 other doors with handbag shops and also shoes. So we're excited about that. But there's also very strong momentum in the DTC business, digital. The new stores continue to perform well. As I mentioned, we're opening some additional stores. Excuse me, the U.S. stores continue to perform very well, and we're opening some additional U.S. stores. So a lot of good things happening there. And secondly, Steve Madden handbags, yes. As we have indicated, we expect a return to growth starting in the current quarter. So we're pleased to have that headwind behind us.

• Q: Hey, good morning. Thanks for taking the questions. I wanted to ask on SG&A and how we should be thinking about the cadence of SG&A growth into the next quarter and then into the back half of the year when you've lapped the Kurt Geiger acquisition. So, including Kurt Geiger in Q1, SG&A was up 50.2%. We expect that to be probably around, I would say, 25% increase in Q2, and then it should drop to low teens in Q3 and high singles in Q4. Perfect. Thank you. And then maybe just a follow-up on the Middle East and how the conflict impacts the business from a direct standpoint in terms of revenues. You mentioned the impact to store comp and the prepared remarks. I'd be curious just what's included in the guidance for 2026 from a top-line perspective from the Middle East.

  A: Yeah, it's about it. We have about a fifth north of $50 million. We had north of $50 million business there, about 63 stores. We don't have the overall top line impact that we've built in there. But look, the business in the GCC, for instance, is still trending down close to 40% this month. And so we built in about a... $4 million profit hit, I know, in that region. Yeah, Zin's telling me it's about $9 to $10 million that we've taken out for the impact there. For revenue. For revenue, excuse me. Okay, got it. Thank you. And then just last one, I wanted to ask about Kurt Geiger from a margin perspective. You mentioned in the past having a runway to getting to double-digit EBIT margins over time. Anything you can share on how EBIT margin is progressing for Kurt Geiger this year, especially in light of the higher revenue guide? A: Yeah, so we're expecting about 100 basis points of improvement in 26 versus 25. It still doesn't get us back to pre-tariff levels, so we need to continue to to drive that up in the coming years. And we still continue to believe there's no reason this business shouldn't be in the double digits. And certainly the branded portion, if we exclude the concessions, you know, we think has potential to be, you know, certainly in the teens, if not the mid-teens.