Steve Madden swings to loss on coronavirus closures
New York-based footwear group Steve Madden announced a net loss of $17.5 million, or $0.22 per diluted share, for the first quarter ended March 31, 2020, on Thursday, as the company’s sales suffered from the negative effects of Covid-19-related store closures. In the prior-year period, the group’s net income totaled $34.5 million, or $0.41 per diluted share.
The company, which aside from its namesake flagship brand, also owns labels such as Dolce Vita, Blondo and Brian Atwood, reported quarterly revenues of $359.2 million, down 13.6% from $415.8 million in the same period of the previous year.
Sales declines were fairly consistent across Steve Madden’s different distribution channels, with wholesale revenues decreasing 13.0% to $302.7 million, while retail sales fell 15.8% to $52.9 million. All of the company’s retail stores outside of China have been closed due to the Covid-19 pandemic since March.
“After a strong 2019, we got off to a good start to 2020, with revenue and earnings trending above plan through the first two months of the year and very positive consumer reaction to the Spring product in our flagship Steve Madden brand,” said Steve Madden chairman and CEO Edward Rosenfeld in a release, going on to discuss the negative impact of the coronavirus pandemic on the company’s operations later in the quarter.
“We entered this crisis with an exceptionally strong balance sheet,” he added. “As we look ahead, we are confident that our strengths – including our brands, business model and balance sheet – will enable us to navigate this crisis and to thrive once conditions normalize.”
In response to the economic challenges presented by the ongoing health crisis, Steve Madden has taken a range of cost-saving initiatives, including the suspension of share repurchases, and the reduction of payroll, non-essential operating expenses, capital expenditures and planned inventory receipts. The company has also drawn down $50 million from its existing credit facility.
Steve Madden ended the first quarter with 224 company-operated stores, including eight e-commerce stores, as well as 30 company-operated concessions in international markets.
Due to continued uncertainty surrounding the extent of disruption still to be caused by the coronavirus pandemic, the company has not provided financial guidance for the second quarter or the full fiscal year 2020.
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