Steven Madden To Benefit From Fashion Sneaker Trend

Steven Madden Ltd. SHOO will benefit from an emerging trend favoring fashion sneakers, while its acquisition earlier this year of Canadian boot company Blondo offers further opportunity, an analyst said Tuesday.

Shares of the New York-based footwear company gained 17 percent year-to-date and closed Tuesday at $37.47, up $0.82.

Wunderlich's Danielle McCoy maintained a Buy rating and $44 target and said Spring fashion trends, growth in handbag sales and increasing international business all bode well for the company.

A lack of fashion trends presented the company's "largest challenge" last year, according to McCoy, who said the "shift in the powerful sneaker movement is becoming more favorable."

The company's $100 million handbag business is expected to more than double in the next three years, with the potential for expanding into leather from the current polyvinyl chloride lineup.

Steve Madden's acquisition in January of Canadian waterproof boot maker Blondo for undisclosed terms offers opportunity to sell the product in the U.S.

McCoy said with 75 percent of Blondo's sales in Canada, big retailers like Bloomingdale's and Nordstroms may offer further scope in the U.S.

But McCoy called the international segment the company's "largest long-term growth driver."

About 9 percent of Steve Madden's business is currently from international sales, and McCoy said the company's management believes that could double by 2017.