Morgan Stanley: Steven Madden A 'Solid Story, Needs Catalyst'

Steven Madden, Ltd. SHOO may have an attractive customer base and interesting shot at international expansion, but its sagging same-store sales leaves an analyst on the sidelines.

The New York-based women's shoe retailer's shares are off more than 13 percent year to date. Same-store sales fell 7.4 percent in the quarter ended September 30, while total sales fell 0.7 percent to $392 million.

"It's a solid story but it needs a catalyst," Morgan Stanley's Jay Sole said in a video research note Monday in which he maintained an Equal-Weight rating.

"The key thing is soft same-store sales," Sole said, laying the problem on a lack of "dominant fashion footwear trends."

Sole noted the relatively young age of the company's customer base as well as its potential for international expansion through joint ventures and through acquiring some of its overseas distributors.

It's an industry leader "and they have a very good international opportunity," according to Sole, who doesn't see a turnaround in same-store sales "for at least another quarter or two."

Madden traded recently up 1 percent to $31.70 per share.