Steven Madden Lined Up for Q2 Earnings: What's in Store?

As Steven Madden, Ltd. SHOO prepares to announce its second-quarter 2024 earnings on Jul 31 before market open, investors are keenly watching for insights into the company's performance and strategic direction.

The company has successfully carved out a niche in the competitive footwear industry by focusing on trendy, fashion-forward designs that appeal to a broad range of consumers. The Zacks Consensus Estimate for second-quarter revenues stands at $506.8 million, which indicates an increase of 14.5% from the prior-year reported figure.

The bottom line is also expected to rise year over year. Over the past 30 days, the Zacks Consensus Estimate for earnings per share has been stable at 51 cents, which suggests a jump of 8.5% from the year-ago quarter.

Steven Madden has a trailing four-quarter earnings surprise of 6%, on average. In the last reported quarter, this Long Island City, NY-based company surpassed the Zacks Consensus Estimate by a margin of 16.1%.

Factors to Consider

Steven Madden's strategic focus on expanding its footprint in international markets is likely to have driven revenue growth in the second quarter. The company has been successfully growing its presence across key regions, including the EMEA, the Americas ex-U.S. and the APAC. The EMEA region remains a significant growth driver, with the Middle East joint venture gaining strong momentum and the South Africa joint venture experiencing rapid growth. By capitalizing on brand recognition and leveraging local partnerships, Steven Madden is well-positioned to capture increased market share globally.

The diversification into accessories and apparel continues to be a strong revenue driver for Steven Madden. The company's handbag and apparel segments have shown robust growth, with new product launches and expanded assortments in key wholesale accounts. The successful integration of the Almost Famous business and the introduction of the Madden Girl Apparel line have further strengthened Steven Madden's market position in these categories.

Steven Madden's direct-to-consumer (DTC) channels, particularly digital sales, are expected to have contributed to revenue growth. The company's investments in enhancing its e-commerce platform and optimizing its digital marketing strategies are paying off, with increased online engagement and higher conversion rates. Additionally, the expansion of brick-and-mortar stores, coupled with effective inventory management and on-trend product assortments, is likely to have driven more sales through DTC channels. We expect revenues from the DTC channel to increase 8.1% year over year during the second quarter.

The recovery in Steven Madden's U.S. wholesale footwear business is another factor that could have led to increased revenues in the second quarter. After a period of inventory adjustments by major wholesale customers in 2023, the situation has stabilized, and these customers have healthier inventory levels. This stabilization has allowed Steven Madden to return to growth in its U.S. wholesale segment, with improved order volumes and a stronger private label business. We foresee revenues from the wholesale business to increase 16% year over year.

The company's focus on optimizing supply-chain operations, reducing costs and improving inventory turnover ensures that it can meet customer demand promptly and efficiently. By maintaining a lean operational structure and minimizing disruptions, Steven Madden can maximize its revenue and earnings potential.

What the Zacks Model Unveils

Our proven model doesn't conclusively predict an earnings beat for Steven Madden this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that's not the case here.

Steven Madden currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, thus making the surprise prediction difficult.

3 Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

The Gap Inc. GPS has an Earnings ESP of +4.39% and sports a Zacks Rank of 1 at present. GPS is likely to register top-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.63 billion, which suggests 2.2% growth from the figure reported in the year-ago quarter.

The consensus estimate for Gap's fiscal second-quarter earnings is pegged at 41 cents per share, which calls for 20.6% growth from the figure reported in the year-ago quarter. GPS delivered an earnings beat of 202.7%, on average, in the trailing four quarters.

Abercrombie & Fitch Co. ANF has an Earnings ESP of +9.09% and currently sports a Zacks Rank of 1. Abercrombie & Fitch's top line is anticipated to advance year over year when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.08 billion, which suggests a 15.1% increase from the figure reported in the year-ago quarter.

The company is expected to register an increase in the bottom line. The consensus estimate for Abercrombie & Fitch's fiscal second-quarter earnings is pegged at $2.11 per share, up 91.8% from the year-ago quarter. ANF has a trailing four-quarter earnings surprise of 210.3%, on average.

Costco Wholesale Corporation COST currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST's quarterly revenues is pegged at $80 billion, which implies a jump of 1.3% from the year-ago quarter's reported figure.

The consensus estimate for Costco's earnings has increased by a penny in the past 30 days to $5.02 per share. The consensus estimate for earnings suggests growth of 3.3% from the year-ago quarter's reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.

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