Steven Madden (SHOO) Q407 Preview

Secondary plays: BWS, SHOE, BKRS, SHOO, PXG.

02/19/2008 Update
Steven Madden beats by $0.05, reports revs in-line; guides for FY08 (16.78 ) : Reports Q4 (Dec) earnings of $0.23 per share, $0.05 better than the First Call consensus of $0.18; revenues fell 10.0% year/year to $102.7 mln vs the $102.1 mln consensus. Co issues guidance for FY08, sees EPS of $1.45-1.55 vs. $1.37 consensus; sees FY08 revs flaat to +2% yr/yr or roughly $431-439.7 mln vs. $440.04 mln consensus. Due to easier comparisons in the back half, the Company expects sales and earnings to be more heavily weighted to the second half of 2008 relative to 2007.

On February 19, 2008, SHOO is scheduled to report 4Q07 results with a conference call at 10ET that same day.

For 4Q07, analysts expect EPS of $0.18 with revs of $102.12 mln...

Past Results: On November 1, 2007, SHOO reported 3Q07 earnings of $0.42 per share, excluding items, $0.02 better than the Reuters Estimates consensus of $0.40. Co issues in-line guidance for FY07 (Dec), sees EPS of 1.50-1.60 vs. $1.58 consensus. "As previously reported, we experienced challenges in both our wholesale and retail divisions due to a soft consumer spending environment and a lack of big fashion footwear trends. With that said, we are pleased with the consistently positive results from Madden Girl... Importantly, we effectively controlled our inventory which enabled us to maintain our overall gross margin on top of the significant increase we achieved in the same period last year." ...

Key Items: Look for updates on the SHOO's fashion trends, as that has been a weak point for the co. A strong fashion trend could help spur sales. AN update on the men's business will also be a key note. If SHOO is able to improve its men's product line, they might be able to drive growth. Do note that on October 19 SHOO announced strategic review process. Look for any updates on that review. Look at inventories as well, as an increase my pressure top line growth (Note inventory last quarter was $36.3 mln; also not inventory turns the last 12 months were 7.8 times, up from 7.3 times a year ago)....

Stock Action: Since reporting 3Q07 results on November 1, 2007, SHOO shares are down ~30%. Since January 2, 2008, shares are down ~15%. Today, SHOO shares are up ~1%...

Expectations: Look for SHOO to report inline with expectations. Co may have struggled to grow revs and a strong emergence of a fashion trends could change that expectation around. Also, with such a large amount of time taken on the strategic review, don't expect co to be announcing any acquisitions anytime soon...