Steven Madden To See Wholesale Order Shifts & Volatile Consumer Shopping Behaviors In Q2, Says Analyst

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Steven Madden Ltd SHOO with a price target of $39.

SHOO will report 2Q23 results on Wednesday, August 2, 2023.

The analyst said the company continues to improve its inventory position, as the last two consecutive quarters of Y/Y declines follow seven periods of Y/Y growth.

Ahead of next's week's earnings release, the analyst is maintaining the estimates and continues to look for second-quarter EPS of $0.48 vs. $0.63 last year.

On the topline, the analyst continues to expect total sales to decrease 12.5% Y/Y to $468 million, slightly ahead of the market's estimate of $457 million.

The analyst forecasts 270 basis points of operating margin pressure in 2Q23 to 9.9%.

The analyst said that despite the volatile macro landscape and tough Y/Y compares, SHOO delivered an encouraging start to the fiscal year last quarter.

The analyst believes wholesale channel trends can improve through the year as inventory overages in the channel abate.

Despite wholesale headwinds, we continue to see healthy underlying demand, with better performances in the DTC business and branded portfolio.

Also, with the normalization of supply chain lead times, SHOO should be better equipped to drive its competitive advantage of testing and reacting to trends and chasing demand in season, opined the analyst.

However, the analyst regards wholesale partner sentiment remains tepid, and the DTC channel underperformed expectations for the quarter.

Price Action: SHOO shares are trading lower by 1.14% at $33.06 on the last check Thursday.