B. Riley On Steve Madden: We're Buyers At Multi-Year Low

B. Riley issued a company note on Steve Madden, Ltd. SHOO after the company issued preliminary Q4 2015 results that were primarily in line or exceeded expectations. B. Riley rates Steve Madden as Buy with a $48 price target.

Analyst Mitch Kummetz wrote, "Retail comps exceeded expectations, although we do believe that promotional activity limited upside to GM %...SHOO performed respectively in Q4, particularly on the bottom line, with approximately 25 percent EPS growth...SHOO still has the potential to grow its business through a stable of diverse brands."

Related Link: Steve Madden Investors Focus On Retail Comps Over Disappointing Guidance

B. Riley noted that Wholesale and Retail sales exceeded expectations as Steve Madden has several operational strengths including a short lead time business that greatly assists variable consumer demand at retail stores. After conducting further research, analysts noted low levels of promotional activity at several large stores for Steve Madden's shoes, which shows strength in demand and proper inventory management.

Furthermore, Steve Madden has the possibility of driving revenue growth as the weather improves and new styles hit store shelves for the spring and summer season. With demand being high, Steve Madden may be able to command a high degree of pricing power, which can increase profitability heading into 2016.

Shares of Steve Madden recently traded at $29.74, up 1.4 percent.