SHOO Q3 Earnings Lag Estimates, Shares Up on Promising Q4 Guidance

Steven Madden, Ltd. SHOO reported third-quarter 2025 results, wherein the top and bottom lines lagged the Zacks Consensus Estimate. Total revenues increased, while earnings decreased from the year-ago period.

However, the company delivered strong forward guidance and a positive tone about business recovery and growth momentum. SHOO anticipates strong top-line growth in the fourth quarter, driven by the addition of Kurt Geiger and improving momentum in its core footwear business.

While tariffs and integration costs will continue to pressure profitability, sequential improvement in margins and accelerating demand trends position the company for recovery heading into 2026. As a result, SHOO shares gained 13.6% yesterday.

Steven Madden’s Quarterly Performance: Key Insights

SHOO posted adjusted quarterly earnings of 43 cents per share, which missed the Zacks Consensus Estimate of 44 cents. The metric plummeted 52.7% from 91 cents in the prior-year period.

Total revenues rose 6.9% year over year to $667.9 million. Net sales of $664.2 million grew 6.9%, and licensing fee income of $3.7 million increased 4.9% from the year-ago period. The top line missed the consensus estimate of $699 million.

Adjusted gross profit rose 11.6% year over year to $289.7 million, which surpassed our estimate of $278.5 million. We note that the adjusted gross margin expanded 180 basis points (bps) to 43.4%.

The company’s adjusted operating expenses increased 39.7% year over year to $243.4 million. Our estimate for the metric was $238.9 million. As a percentage of revenues, adjusted operating expenses increased 850 bps year over year to 36.4%.

Steven Madden reported an adjusted operating income of $46.3 million, down 45.8% from the prior-year quarter. The adjusted operating margin decreased 680 bps to 6.9%. We expected an adjusted operating margin of 5.7% for the quarter.

SHOO’s Segmental Performance in Q3

In the third quarter of 2025, wholesale revenues totaled $442.7 million, representing a 10.7% decline from the year-ago period. When excluding the recently acquired Kurt Geiger business, wholesale revenues decreased by 19% year over year.

Within the wholesale segment, footwear revenues were down 10.9%, or 16.7% excluding Kurt Geiger, while accessories and apparel revenues declined 10.3%, or 22.5% excluding Kurt Geiger. The adjusted gross margin in this segment was 33.6%, down 190 basis points year over year, primarily due to the impact of recently implemented tariffs on products imported into the United States.

Direct-to-consumer revenues for the quarter were $221.5 million, up 76.6% year over year. Excluding Kurt Geiger, direct-to-consumer sales grew 1.5%. The adjusted gross margin was 61.9%, down 290 basis points year over year, reflecting the effect of new import tariffs and the addition of the Kurt Geiger concessions business.

At the end of the third quarter, the company operated 397 brick-and-mortar retail stores, including 99 outlet locations, along with seven e-commerce websites and 133 company-operated concessions in international markets.

SHOO’s Financial Health Snapshot

Steven Madden ended the quarter with cash and cash equivalents of $108.7 million, short-term investments of $0.1 million and stockholders’ equity of $886.1 million, including non-controlling interest of $35.3 million. The capital expenditure in the third quarter was $11.6 million.

In the third quarter, the company did not repurchase any shares of its common stock in the open market.

SHOO announced a cash dividend of 21 cents per share, payable Dec. 26, 2025, to its shareholders of record as of Dec. 15.

SHOO’s Q4 Outlook

Looking ahead to the fourth quarter of 2025, the company expects revenues to rise 27% to 30% year over year. EPS is forecasted to be between 30 cents and 35 cents, and adjusted EPS is expected to range from 41 cents to 46 cents.

Excluding the recently acquired Kurt Geiger business, revenues for the core operations are expected to decline approximately 2% to 4% year over year. Within the core business, wholesale footwear revenues are projected to increase 2% to 4.5%, while wholesale accessories and apparel are expected to decrease in the mid- to high-teens range. Both wholesale footwear and direct-to-consumer sales are anticipated to post growth, partially offset by weakness in accessories and apparel.

The contribution from Kurt Geiger is forecasted to range between $182 million and $187 million in revenues for the fourth quarter, with approximately $135 million derived from its direct-to-consumer operations, which represent over 70% of the brand’s total sales mix. This higher DTC weighting is expected to have a favorable impact on the company’s overall gross margin.

Tariff-related headwinds are expected to persist through the fourth quarter, with the unmitigated impact on gross margin anticipated to be slightly worse than in the third quarter. However, mitigation measures, including selective price increases, sourcing diversification and negotiated factory cost reductions, are expected to lessen the overall effect. The inclusion of Kurt Geiger will continue to weigh on consolidated gross margin by roughly 300 basis points, consistent with the third quarter.

SHOO Stock Past Three-Month Performance

In the past month, shares of this Zacks Rank #3 (Hold) company have gained 45.5% against the industry’s 16.8% decline.

Stocks to Consider

Some better-ranked stocks are Boot Barn Holdings, Inc. BOOT, Urban Outfitters Inc. URBN and American Eagle Outfitters Inc. AEO.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift items. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 29.1% and 12.8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 24.8%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales indicates declines of 36.2% and 1.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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