USA: Steven Madden Ltd Announces Record Second Quarter Results
Revenues for the second quarter increased 26% to $48,057,000 compared to $38,056,000 for the second quarter of fiscal 1999. Operating income for the second quarter increased by 54% to 6,069,000 compared to 3,951,000 for last year. Net income for the second quarter rose 58% to $3,743,000 versus net income of $2,364,000 last year. Diluted earnings per share increased 47% to $0.28 on 13,220,000 diluted weighted average shares outstanding versus diluted earnings per share of $0.19 on 12,194,000 diluted weighted average shares outstanding in 1999.
Arvind Dharia, chief financial officer, stated: "Our second quarter sales results demonstrate the company's successful execution of its business strategy to strengthen its brands and increase its market share. The second quarter gross margin increased by 110 basis points to 43.6% versus 42.5% last year. This increase was driven by the sales of higher margin classifications such as athletic inspired sneaker and sandals."
For the six month period ended June 30, 2000, revenues increased 42% to $92,166,000 compared to $64,787,000 for the first six months of 1999. Operating income for the six months increased by 74% to 10,837,000 compared to 6,231,000 for last year. Net income for the six months rose 83% to $6,925,000 versus net income of $3,775,000 last year. Diluted earnings per share increased 68% to $0.52 on 13,224,000 diluted weighted average shares outstanding versus diluted earnings per share of $0.31 on 12,068,200 diluted weighted average shares outstanding in 1999.
During the second quarter, results for the wholesale business, comprising the company's four brands, Steve Madden, Stevies, l.e.i. and David Aaron, increased 21% to $31,834,000 versus $26,229,000 for the comparable period last year. Wholesale growth was driven from increased distribution, additional concept shops, the first shipments of the newest brand, Stevies, as well as, the overall strengthening of the existing brands. Retail revenues were $16,222,000 versus $11,827,000, an increase of 37% over last year. Same store sales increased 2% during the quarter to $12,094,000 compared to $11,827,000 last year. The company reported that its retail subsidiary opened 5 stores during the quarter ending June 30, 2000, with a total of 57 company-owned retail stores including the Internet store versus 39 stores at June 30, 1999. Seven stores are scheduled to open during the third quarter.
Rhonda J. Brown, president and chief operating officer, commented: "Our strong second quarter results were driven by the overall performance of our business and our ability to manage expenses while strengthening infrastructure to support of our future growth. Department stores retail sales increased over 20% attributed partly to an over 45% increase in concept shops versus last year to 950 doors. We believe that cooler than normal weather in the Northeast impacted the momentum in our retail division. At the same time, we remain focused on in-store productivity, which increased 5% during the quarter. Our Internet store continues to outpace our projections with revenues from the Internet store increasing 163% from last year. Total hits for the quarter were 40.9 million compared to 34.3 million during the first quarter with 216,000 unique users at a conversion rate of 5.1%."
The company's overall financial condition at June 30, 2000 remained strong with $22 million in cash and equivalents and total stockholder's equity of $67 million. From June 23, 2000 to July 5, 2000, the Company bought back 900,000 shares of stock at an average share price of $6.75 pursuant to the previously announced shareholder buyback program.
Steve Madden, CEO, concluded: "Our company and its management team are focused on executing the business plans and committed to future growth. Most recently, we launched our girls and 'tweens' focused brand Stevies which includes the rollout of 500 Stevies accessories concept shops and going live in June with the e-commerce portion of the Stevies.com site. In addition, we have stepped up our marketing activities in support of the flagship Steve Madden brand and Stevies inclusive of increased advertising frequency, event sponsorships and a Stevies model search."
Steven Madden Ltd designs and markets fashion-forward footwear for women. The shoes are sold through Steve Madden Retail Stores, a David Aaron Retail Store, department Stores, apparel and footwear specialty stores, and on-line @ www.stevemadden.com and @ www.stevies.com. The company has several licenses for the Steve Madden and Stevies brands including leather sportswear, outerwear, eyewear, hosiery, hair accessories, jewelry, handbags, belts, sunglasses, and cold weather items, and is the licensee for l.e.i. Footwear and Jordache Footwear.
Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties readers are urged to consider statements labeled with the terms "believes", "belief", "expects", "intends", "anticipates" or "plans" to be uncertain and forward-looking. The forward looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.
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