Subscribe to Entrepreneur for $5
Subscribe

Steven Madden (SHOO) Up 32% in a Year: The Road Ahead in 2022

Steven Madden's (SHOO) e-commerce business exhibits momentum. SHOO also remains upbeat about its prudent buyouts and brand strength.

By
This story originally appeared on Zacks

The current year proved to be quite a successful period for Steven Madden, Ltd. SHOO.

This renowned fashion-footwear dealer has given a tough fight to the ongoing coronavirus perils and managed to stay afloat amid such challenging times. Steven Madden is well poised to tap the positive trends in the fashion world, thanks to its solid digital efforts and other robust strategies, including brand strength.

As a result, shares of this currently Zacks Rank #2 (Buy) player have surged 32.2% in a year, outperforming the industry's 17.2% growth. Also, SHOO looks quite favorable from earnings point of view. Steven Madden’s earnings have outpaced the Zacks Consensus Estimate in the past six quarters. The average trailing four-quarter beat is 41.9%. An expected long-term earnings growth rate of 15% further speaks of strength.

- Zacks

Zacks Investment ResearchImage Source: Zacks Investment Research

The Zacks Consensus Estimate for Steven Madden’s next-year earnings is currently pegged at $2.88, which has been revised 0.7% upward over the past 30 days, suggesting analysts’ optimism. The Zacks Consensus Estimate for SHOO’s next financial-year sales and earnings per share (EPS) is currently pegged at $2.03 billion and $2.88 each, suggesting respective growth of 11.8% and 22.3, from the corresponding year-ago reported figures.

Detailing Strategies

E-commerce business has been a bright spot for Steven Madden so far. Sturdy gains from increased investments in digital marketing and robust consumer capabilities, such as try before you buy are steadily contributing to its performance. Management continues to significantly accelerate the digital commerce initiatives pertaining to distribution. It added a high level talent to the organization, ramped up digital marketing spend, improved data science capabilities, launched the try-before-you-buy payment facility, rolled out buy online, pick-up in store across its entire U.S. full price retail outlets plus introduced advanced delivery and return options.

The momentum continued during the third quarter of 2021 with e-commerce revenues surging 83.7% year over year and 200% from the same-period level in 2019. Digital sales represented about 49% of  Steven Madden’s total Retail segment sales in the reported quarter. Its e-commerce wing continues to gain from its prudent investments in digital marketing and efforts to optimize features and functionality of its website. Going forward, strength in the e-commerce realm is likely to stay and keep boosting SHOO’s overall results.

Steven Madden is also making strategic agreements to bolster growth across its business. In fact, SHOO has been benefiting from its smart buyouts for a while now. Management is optimistic about the buyout of BB Dakota, a California-based women's apparel company through which SHOO is steadily expanding its apparel category.

Steven Madden’s European joint venture (JV) is noteworthy as well. It distributes SHOO’s branded footwear and accessories across most countries in Europe. Management had formed the European JV roughly five years ago and the same registered solid double-digit percentage revenue growth each year with 21% revenue increase witnessed last year. These buyouts are likely to sustain SHOO’s encouraging performance record.

Conclusion

Steven Madden is focused on creating trend-right merchandise assortment, deepening relations with customers via marketing, enhancing digital commerce agenda, expanding international markets and efficiently controlling expenses. SHOO remains confident of its robust brands. A solid business model positions it well to cash in on the market-growth opportunities and boost its stakeholders’ value over the long haul.

Impressive digital gains, brand progress, sturdy marketing efforts and prudent buyouts bode well for SHOO in 2022. In short, all the aforesaid endeavors will aid Steven Madden in retaining its momentum on the bourses, thus making it a valuable investment option now.

Eye These Solid Picks Too

Delta Apparel DLA, the manufacturer of activewear and lifestyle apparel products, sports a Zacks Rank #1 (Strong Buy) at present. The stock has surged 47.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Delta Apparel’s next financial-year sales and EPS suggests growth of 9.3% and 12.4%, respectively, from the year-ago corresponding figures. DLA has a trailing four-quarter earnings surprise of 95.5%, on average.

Kontoor Brands KTB, a lifestyle apparel company, flaunts a Zacks Rank of 1 at present. The stock has increased 25.9% in the past year. KTB has an expected EPS growth rate of 8% for three-five years.

The Zacks Consensus Estimate for Kontoor Brands’ next financial-year sales and EPS suggests growth of 7.8% and 13.3%, respectively, from the year-ago  corresponding figures. KTB has a trailing four-quarter earnings surprise of 22.2%, on average.

Under Armour UAA, the designer and marketer of athletic footwear, apparel and accessories, has a Zacks Rank of 2, currently. UAA has a trailing four-quarter earnings surprise of 244.5%, on average. Shares of UAA have jumped 23.9% over the past year.

The Zacks Consensus Estimate for Under Armour’s next-year sales and EPS suggests growth of 6.1% and 5%, respectively, from the year-ago corresponding readings. UAA has an expected EPS growth rate of 25% for three-five years.



5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Steven Madden, Ltd. (SHOO): Free Stock Analysis Report

 

Delta Apparel, Inc. (DLA): Free Stock Analysis Report

 

Under Armour, Inc. (UAA): Free Stock Analysis Report

 

Kontoor Brands, Inc. (KTB): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research