Steven Madden: Hold Rating Amidst Mixed Demand and Wholesale Challenges

Sam Poser, an analyst from Williams Trading, maintained the Hold rating on Steven Madden (SHOO – Research Report). The associated price target remains the same with $44.00.

Sam Poser has given his Hold rating due to a combination of factors affecting Steven Madden’s business. Poser acknowledges the strength of certain Steven Madden products, such as the popular Hadyn flat sandal and the Slinky30 platform slide. However, he notes that despite these strong sellers, there has been no significant uptick in demand from the company’s large wholesale customers following the Easter period, which is typically a key sales window. This lack of increased demand is partly attributed to unseasonably cold weather impacting sandal sales. Additionally, while there is an expectation of growth driven by the mass retail channel, this alone does not appear sufficient to vigorously propel sales for Steven Madden’s footwear.
Moreover, Poser points out that while Steven Madden is effectively managing its business and creating compelling products within its various lines, conservative buying strategies by department stores pose a challenge. The potential for upside in the company’s FY24 guidance could come from an increase in immediate orders, but there is a risk if anticipated gross margin improvements are not achieved due to reduced year-over-year promotions. Retail sales growth and initiatives are expected to have a positive impact, but the scale of owned retail is not yet sufficient to balance the unpredictability of wholesale partnerships, indicating a need for greater direct-to-consumer (DTC) penetration to lessen dependency on wholesale channels.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

Steven Madden (SHOO) Company Description:

Steven Madden Ltd. engages in the design, marketing, and sale of fashion-forward footwear for women, men, and children. It operates through the following segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost, and Licensing. The Wholesale Footwear segment includes branded and private label women’s, men’s, girl’s and children’s footwear. The Wholesale Accessories segment comprises of branded and private label handbags; belts and small leather goods; and cold weather and selected other fashion accessories. The Retail segment distributes branded women’s, men’s and children’s footwear, accessories, and licensed products to consumers. The First Cost segment earns commissions and design fees for serving as a buying agent of footwear products to mass-market merchandisers, mid-tier department stores,and other retailers with respect to their purchase of footwear. The Licensing segment licenses its trademarks for use in connection with the manufacture, marketing, and sale of outerwear, hosiery, active wear, sleepwear, jewellery, watches, hair accessories, umbrellas, bedding, luggage, and men’s leather accessories. The company was founded by Steven L. Madden on July 9, 1990 and is headquartered in Long Island City, NY.