• Net income drops to US$21m
  • Gross margin narrows to 34.3%
  • Sales fall to $342.6m

US fashion footwear and accessories specialist Steve Madden said the fourth quarter was a tough period that capped a difficult year for the company after it booked a drop in earnings and sales.

In the three months to the end of December, net income dropped to US$21m from $35.7m a year earlier. Last year's earnings included a benefit related to recovery of a text message litigation settlement. On an after-tax basis, the benefit positively impacted 2013 fourth-quarter profit by $0.6m.

Gross margin in the period narrowed to 34.3% from 37.8% in the same period last year, while sales dropped slightly to $342.6m versus sales of $342.9m last year.

CEO Edward Rosenfeld, said the company impacted by a lack of significant fashion footwear trends on which to capitalise in the quarter. It also faced additional challenges including production delays on goods from Mexico and slowdowns at the West Coast ports.

He added: “While 2014 was a difficult year, we are excited about the steps we took during 2014 and early in 2015 to position the company for future growth. In 2014, we implemented a new e-commerce platform, acquired two powerful footwear brands in Dolce Vita and Brian Atwood, and moved to an ownership model in two important international markets with the acquisition of our Mexican licensee and the formation of a joint venture in South Africa.

For fiscal 2015, the company expects net sales will increase 7% to 9% over 2014. Diluted EPS is expected in the range of $1.85 to $1.95.