MADDEN’S NET SURGES 126%
NEW YORK — Fueled by strong sales in sandals and sneakers, Steve Madden Wednesday reported record financial results, including a 126 percent increase in its earnings, for the first quarter ended March 31.
The Long Island City, N.Y.-based company, best known for its whimsical footwear lines, said its net income climbed to $3.2 million, or 24 cents per diluted share, from $1.4 million, or 12 cents. Sales rose 65 percent to $44.1 million from $26.7 million.
Its best results came from its wholesale business, comprising Steve Madden, l.e.i. and David Aaron, which soared 72 percent to $32.8 million from $19.1 million in the year-ago quarter. These increases were driven by the continuing expansion of l.e.i., the replenishment of key items, increased sales in sandals and sneakers and the addition of 60 concept shops, the company said.
Retail revenues were up 48 percent to $11.3 million from $7.6 million. Same-store sales increased 19 percent to $9.1 million compared to $7.6 million.
The success of higher-margin classifications, such as sneakers and sandals, and faster inventory turns helped boost gross margin to 41.2 percent from 40.9 percent.
Arvind Dharia, chief financial officer, said in a statement that the company has been able to have such positive results by “methodically executing our business strategy, strengthening the brands and increasing our market share.”
Rhonda J. Brown, president and chief operating officer, added that the results stem from “better than expected sales gains and the operating leverage that resulted from holding the line on costs.”
Steve Madden is also looking to increase the number of retail outlets by five during the second quarter. It opened three retail stores in the first quarter for a grand total of 52. It had 36 stores a year ago. Earlier this week, Madden announced plans for a new store on 34th Street in the former Topaz location, which is scheduled to open later this month.
Madden has also disclosed plans to add a new line of children’s products under the label Stevies.
The company saw a 400 percent rise in Internet sales. Total hits for the quarter reached 34.3 million with a conversion rate of 8.9 percent.
Steve Madden, chairman and chief executive, said his company is poised to continue growing. In particular, Madden said, he is looking forward to marketing the new “tween” Stevies line, for 6 to 12 year olds, which will be shipped in June in time for the back-to-school selling season.
Madden also began testing a new customer service program that features a fashion stylist in a given store to offer personalized product suggestions. Based on the increased sales from test sites in New York, the company said it plans to introduce fashion stylists to more stores in the near future.