Madden Sees Wholesale Shoe Revenue Decline in Q2 on Tariff Impact
Steven Madden Ltd.’s second quarter results saw a dip in gross profit, higher operating expenses and a decline in wholesale revenue, all due to near-term impacts from the tariff backdrop on goods imported to the U.S.
“As anticipated, the second quarter was challenging, driven largely by the impact of new tariffs on goods imported into the United States,” Madden’s chairman and CEO Edward Rosenfeld said. “Our team continues to act with agility to mitigate near-term impacts while remaining focused on positioning the company for long-term growth by executing our strategy to deepen consumer connections through the combination of compelling product and effective marketing.”
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The CEO said the integration of Kurt Geiger is “proceeding smoothly,” with Madden “more confident than ever” in the British brand’s potential to be a significant driver of growth for the company. The company announced its acquisition of Geiger in February and the transaction closed in May.
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“While tariffs have created near-term pressure and added uncertainty, we believe our key strengths — powerful brands, a robust balance sheet and a proven business model — position us well to navigate the current environment and deliver sustainable growth over time,” Rosenfeld added.
While Madden moved much of its production quickly out of China, there were still some value-priced apparel goods remained. And it couldn’t shift the Geiger assortment mix — 80 percent is sourced out of China — until after the deal closed, although the brand has a bit of insulation from tariff impacts since only 35 percent of Geiger’s business is in the U.S.
For the three months ended June 30, the net loss was $39.5 million, or 56 cents a diluted share, against net income of $35.4 million, or 49 cents, in the same year-ago quarter. On an adjusted basis, net income was $13.9 million, or 20 cents a diluted share. That compares with adjusted net income of $41.2 million, or 57 cents a diluted share, in the same 2024 second quarter. Total revenues rose 6.8 percent to $559.0 million from $523.6 million, which included a 6.6 percent rise in net sales to $556.1 million from $521.7 million. That balance of revenue was from licensing income.
The company said the wholesale business saw a 6.4 percent decrease to $360.6 million in the second quarter. Excluding the Geiger operations, wholesale revenue fell 12.8 percent, with wholesale footwear down 7.1 percent, or 11.7 percent excluding Geiger. Wholesale accessories and apparel revenue were down 5.3 percent, or 14.6 percent excluding Geiger. Gross profit as a percentage of wholesale revenue was 30.0 percent, versus 33.1 percent a year ago.
Direct-to-consumer (DTC) revenue for the quarter rose 43.3 percent to $195.5 million. Excluding Geiger, DTC revenue was down 3.0 percent, with declines in both brick-and-mortar and e-commerce channels. Gross profit as a percentage of DTC revenue was 58.7 percent, versus 64.3 percent in the same 2024 quarter.
For the six months, net income fell to 946,000, or 1 cent a diluted share, from net income of $79.3 million, or $1.09, in the year-ago period. Total revenue gained 3.4 percent to $1.11 billion from $1.08 billion, which included a net sales increase of 3.3 percent to $1.11 billion from $1.07 billion. The balance of revenue was from licensing income.
The company ended the quarter with 392 company-operated brick-and-mortar retail stores, including 98 outlets, seven e-commerce websites and 130 company-operated concessions in overseas markets. That tally includes 73 company-operated stores, including 27 outlets, and two e-commerce websites and 72 concessions related to the Geiger brand.
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