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Steven Madden (SHOO) Rides High on Strategies: Apt to Hold

Steven Madden, Ltd. SHOO is well poised for growth, thanks to its sturdy digital efforts and other robust strategies, including international business expansion and brand strength. SHOO is witnessing strength in the e-commerce business against a tough operating backdrop. Solid gains from product assortments and direct-to-consumer channels also remain tailwinds.

Talking about Steven Madden’s e-commerce business, it remains a key driver. Solid gains from increased investment in digital marketing and robust consumer capabilities, such as try before you buy, have been contributing to its performance for a while.

Management added high-level talent to the organization, ramped up digital marketing spend, improved data-science capabilities, launched the try-before-you-buy payment facility, rolled out buy online, pick-up in store across its entire U.S. full-price retail outlets, and introduced advanced delivery and return options. SHOO is also significantly accelerating its digital commerce initiatives with respect to distribution.

Additionally, management remains optimistic about its strategic agreements to enrich Steven Madden’s presence. SHOO achieved a significant milestone by acquiring the remaining interest in a European joint venture, last April. The buyout of BB Dakota, a California-based women's apparel company, is steadily expanding SHOO’s apparel category, which is encouraging.

During the second quarter of 2022, Steven Madden’s international revenues surged 82% from the year-ago period’s figure, driven by a stellar performance in directly-owned subsidiary markets, namely Canada, Mexico and Europe.

In a nutshell, Steven Madden is focused on creating trendy products, deepening relations with customers via marketing, enriching the digital commerce agenda, expanding international markets including Europe, and efficiently controlling inventory and expenses. SHOO’s flagship brand, Betsey Johnson, Anne Klein, Dolce Vita and private label brands are performing well.

What Else?

All the aforesaid strengths aided this renowned fashion-footwear player’s shares to gain 3.9% in the past month against the industry’s 9.2% decline. A VGM Score of A for this currently Zacks Rank #3 (Hold) stock further speaks volumes for its attractiveness.

For 2022, the Zacks Consensus Estimate for Steven Madden’s sales and earnings per share (EPS) is currently pegged at $2.15 billion and $2.97 each. These estimates suggest growth of 15.4% and 18.8%, respectively, from the year-ago period’s corresponding figures. Also, for 2023, the consensus estimate for sales and earnings stands at $2.23 billion and $3.22 per share, suggesting an increase of 3.8% and 8.3%, respectively, from the corresponding prior-year actuals. This reflects analysts’ optimism on the stock.

On its last earnings call, Steven Madden projects revenues to rise 13-16% from $1.87 billion recorded in 2021 and adjusted earnings per share in the band of $2.90-$3.00, implying an increase from $2.50 earned last year.

Eye These Solid Picks

Designer Brands DBI designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and earnings per share (EPS) suggests growth of 6.9% and 23.5%, respectively, from the year-ago comparable reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.

Delta Apparel DLA is a manufacturer of activewear and lifestyle apparel products. DLA flaunts a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and EPS suggests growth of 14.6% and 45.8%, respectively, from the year-ago corresponding figures. DLA has a trailing four-quarter earnings surprise of 41.1%, on average.

Caleres CAL, a footwear dealer, flaunts a Zacks Rank of 1 at present. CAL has a trailing four-quarter earnings surprise of 62.9%, on average.

The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.2% and 1.8%, respectively, from the year-ago corresponding figures.


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Steven Madden, Ltd. (SHOO): Free Stock Analysis Report
 
Caleres, Inc. (CAL): Free Stock Analysis Report
 
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Designer Brands Inc. (DBI): Free Stock Analysis Report
 
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