Steven Madden (SHOO) Strong on E-commerce & Brand Strength

Steven Madden, Ltd. SHOO seems well poised for growth on the back of immense strength in its e-commerce business and brands. SHOO’s e-commerce business has been exhibiting a solid momentum since the outbreak of the coronavirus pandemic. Amid a tough operating landscape, SHOO managed to stay afloat, thanks to its solid digital efforts and robust strategies, including brand strength.

This renowned fashion-footwear player’s shares have increased 6.7% in the past year against the industry's 7.7% fall. In addition, the Zacks Consensus Estimate for Steven Madden’s 2022 sales and earnings per share (EPS) is currently pegged at $2.09 billion and $2.81, respectively. These estimates suggest growth of 12.2% and 12.4%, respectively, from the year-ago period’s corresponding figures.

Let’s delve deeper.

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Robust digital efforts have been fueling Steven Madden’s e-commerce wing for a while now. Management ramped up the digital marketing spend, improved data science capabilities, launched 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.

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The online arm is gaining from prudent investments in digital marketing as well as efforts to optimize features and functionality of its website. E-commerce revenues surged 80.2% year over year during the fourth quarter of 2021 and 144.9% from the same-period level in 2019. Going forward, strength in the e-commerce realm is likely to stay and keep boosting Steven Madden’s overall results.

Additionally, Steven Madden is focused on international expansion. Management remains optimistic about the buyout of BB Dakota, a California-based women's apparel company, through which SHOO is steadily expanding its apparel category. SHOO is well poised for double-digit gains in the key markets for 2022 and believes that international business is a major driver.

Last April, Steven Madden achieved a significant milestone on the international plane by acquiring the remaining interest in the European joint venture. In fact, Europe has been SHOO’s fastest-growing market over the past years. For 2021, the acquired Europe business increased 57% from the 2020 level and 91% from the 2019 level. This paves the way for SHOO’s EMEA region to hit the $100-million mark of annual revenues. The continent again performed outstandingly with revenues that more than tripled the same-period level in 2019.

Steven Madden’s flagship and Dolce Vita brands are performing well. SHOO witnessed broad-based strength in Steve Madden, Anne Klein, Betsey Johnson and private label handbags along with BB Dakota Steve Madden apparel, all posting revenue growth of more than 40% from the 2019 level. Overall, SHOO is focused on creating trendy products, deepening relations with its customers via marketing, enhancing the digital commerce agenda, expanding the international markets, including Europe, and efficiently controlling inventory and expenses.

Wrapping up, strength in Steven Madden’s brands and a robust business model position it well to cash in on the market-growth opportunities and boost its stakeholders’ value in the long run. A VGM Score of B for this currently Zacks Rank #2 (Buy) player further highlights strength.

Eye These Solid Picks Too

Some other top-ranked stocks in the Consumer Discretionary space are Gildan Activewear GIL, Oxford Industries OXM and G-III Apparel GIII.

Gildan Activewear flaunts a Zacks Rank #1 (Strong Buy) at present. GIL has an expected long-term earnings growth rate of 8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Gildan Activewear’s 2022 sales and earnings per share (EPS) suggests growth of 8.9% and 3.3%, respectively, from the corresponding year-ago reported figures. GIL has a trailing four-quarter earnings surprise of 66.6%, on average.

Oxford Industries currently flaunts a Zacks Rank of 1. OXM has a trailing four-quarter earnings surprise of 112.8%, on average.

The Zacks Consensus Estimate for Oxford Industries’ current financial year’s sales and EPS suggests growth of 10.2% and 13%, respectively, from the corresponding year-ago reported numbers.

G-III Apparel currently has a Zacks Rank of 1. GIII has a trailing four-quarter earnings surprise of 160.6%, on average.

The Zacks Consensus Estimate for G-III Apparel 's current financial-year sales suggests growth of 8.7% while the same for EPS indicates a rise of 5.2% from the respective year-ago reported figures.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.