Steven Madden To Gain From Brand Value Despite Shifting Trends - Analyst Highlights Almost Famous Acquisition

Piper Sandler analyst Abbie Zvejnieks initiated coverage on Steven Madden, Ltd. SHOO with a Neutral rating and a price target of $45.

Per the analyst, the trend-agnostic speed model is a key differentiator, and strong brand recognition boosts the growth of the apparel and accessories business, aided by the recent acquisition of Almost Famous.

Lapping challenging wholesale trends in 2023 and changing footwear trends will likely power low-teens earnings growth in 2024.

Zvejnieks writes that trend shifts, including ballet flats, kitten heels, ‘closed in the front, open in the back’, and pointy toe, will be a momentum catalyst.

Zvejnieks remains “optimistic” on growth in apparel and accessories as the acquisition of Almost Famous should expand the firm’s reach, including adding new wholesale doors.

The analyst writes that the U.S. wholesale business will return to growth in 2024 following a year of de-stocking. The firm is well positioned to drive wholesale growth following a 16% LTM decline in the channel.

However, increasing freight rates and delays due to the crisis in the Red Sea could pressure margins. 

The firm could be early to see freight increases due to fast inventory turns. The analyst said the firm’s 2024 guidance will be conservative.

Also Read: Red Sea Crisis Hits Maersk Outlook: ‘Oversupply Will Cause Price Pressure, Impact Results’

Price Action: SHOO shares are trading higher by 2.66% to $43.10 on the last check Wednesday. 

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