Steven Madden Ltd.
11/10/2025 | Press release | Distributed by Public on 11/10/2025 09:35
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations for the three and nine months ended September 30, 2025 should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.
All references in this Quarterly Report to "we," "our," "us," and the "Company" refer to Steven Madden, Ltd. and its subsidiaries unless the context indicates otherwise.
This Quarterly Report contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations, and intentions. You can identify forward-looking statements by words such as: "may," "will," "expect," "believe," "should," "anticipate," "project," "predict," "plan," "intend," or "estimate," and similar expressions, or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent our current beliefs, expectations, and assumptions regarding anticipated events and trends affecting our business, and industry based on information available as of the time such statements are made. We caution investors that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which may be outside of our control. Our actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:
•our exposure to risks related to integrating the operations, systems, processes, reporting, supply chains, and personnel of Kurt Geiger into our business;
•our exposure to risks associated with increased indebtedness used to finance the acquisition of Kurt Geiger, including related debt service requirements;
•our ability to manage risks associated with substantial goodwill and intangible assets recorded from the acquisition of Kurt Geiger, which could subsequently become impaired upon adverse changes to the business environment in which we operate;
•our ability to navigate changes in global trade policies and tariffs imposed by the United States government and the governments of other nations in which we manufacture and sell products;
•geopolitical tensions in the regions in which we operate and any related challenging macroeconomic conditions globally that may materially and adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations, and financial condition;
•our ability to navigate shifting macro-economic environments including but not limited to inflation and the potential for recessionary conditions;
•our ability to accurately anticipate fashion trends and promptly respond to consumer demand;
•our ability to compete effectively in a highly competitive market;
•our ability to adapt our business model to rapid changes in the retail industry;
•supply chain disruptions to product delivery systems and logistics, and our ability to properly manage inventory;
•our reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as their ability to meet our quality standards;
•our dependence on the hiring and retention of key personnel;
•our ability to successfully implement growth strategies and integrate acquired businesses;
•our ability to adequately protect our trademarks and other intellectual property rights;
•our ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or a pandemic, which may cause disruption to our business operations for an indeterminable period of time;
•legal, regulatory, political, and economic risks that may affect our sales in international markets;
•changes in U.S. and foreign tax laws that could have an adverse effect on our financial results;
•additional tax liabilities resulting from audits by various taxing authorities;
•cybersecurity risks and costs of defending against, mitigating, and responding to data security threats and breaches impacting the Company;
•our ability to achieve operating results that are consistent with prior financial guidance; and
•other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission (the "SEC").
These risks and uncertainties, along with the risk factors discussed under Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q and, in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024, should be considered in evaluating any forward-looking statements contained in this report. We do not undertake any obligation to publicly update any forward-looking statement, including without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments, or otherwise.
Business Overview
($ in thousands, except for store count and per share data)
Steven Madden, Ltd. and its subsidiaries designs, sources, and markets fashion-forward branded and private label footwear, accessories, and apparel. We distribute our products through the wholesale channel to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, United Kingdom, Canada, Mexico, and Europe. Additionally, we operate in other international markets through our joint ventures in South Africa, the Middle East, Israel, various countries in Europe, Latin America, and certain countries in Asia, and through special distribution arrangements in various European countries, North Africa, South and Central America, and various countries within the Asia-Pacific region. We also distribute our products through our direct-to-consumer channel, which includes company-operated retail stores and e-commerce websites, in the United States, United Kingdom, Canada, Mexico, South Africa, the Middle East, Israel, various countries in Europe, Latin America, and the Asia-Pacific region.
Our product offerings include a diverse range of contemporary styles, designed to establish or capitalize on market trends, complemented by core product offerings. We are recognized for our design creativity and ability to deliver trend-right products with high quality at accessible price points, efficiently and within short lead times.
The Company's reportable operating segments consist of the following:
•Wholesale Footwear. This segment designs, sources, and markets our brands and sells our products to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, United Kingdom, Canada, Mexico, and Europe, and through our joint ventures and international distributor network.
•Wholesale Accessories/Apparel. This segment designs, sources, and markets our brands and sells our products, primarily consisting of handbags and apparel, to department stores, mass merchants, off-price retailers, online retailers, specialty retailers, independent stores, and clubs throughout the United States, United Kingdom, Canada, Mexico, and Europe, and through our joint ventures and international distributor network.
•Direct-to-Consumer. This segment engages in the sale of footwear, handbags, apparel, and other accessories through Steve Madden, Kurt Geiger, Dolce Vita, and Carvela full-price retail stores, Steve Madden, Kurt Geiger and Carvela outlet stores, directly-operated concessions in international markets, and directly-operated e-commerce websites. We operate retail locations in regional malls and shopping centers, as well as high streets in various cities across the United States, United Kingdom, Canada, Mexico, and Europe, as well as through our joint ventures in international markets.
•Licensing.This segment engages in the licensing of the Steve Madden®, Betsey Johnson® and Kurt Geiger trademarks for use in the sale of select apparel, accessories, and home categories as well as various other non-core products.
Corporate does not constitute a reportable segment and includes costs not directly attributable to the reportable operating segments. These expenses are primarily related to corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cybersecurity, and other shared services.
Recent Developments
In August 2025, the Company acquired a 50% controlling financial interest in the newly formed entity, MG Distribution Hong Kong Limited. This joint venture was formed to expand the distribution of the Company's products across China, Hong Kong, and Macau. The results of this joint venture are included within the Direct-to-Consumer segment.
Macroeconomic Conditions and Industry Trends
Our business operations - and the broader industry - continue to be shaped by a dynamic macroeconomic backdrop. While some headwinds have stabilized, uncertainty persists and requires continued agility in our sourcing, supply chain, and go-to-market strategies.
Trade and global sourcing remain areas of heightened focus. Although some previously announced tariff initiatives have been postponed or adjusted, the absence of clarity around future trade policy remains, prompting many multinational businesses, including us, to maintain flexible supplier networks, selectively adjust pricing strategies, and intensify cost-containment efforts.
While interest rates have recently come down in the United States and key international markets, they have remained high through the third quarter of 2025, continuing to impact credit conditions and consumer discretionary spending. Furthermore, continued foreign currency volatility, elevated global trade tensions, and recession fears continue to impact consumer sentiment.
Geopolitical tensions remain influential. The conflicts in the Middle East and Ukraine persist and tensions with China remain elevated. These headwinds have contributed to continued economic uncertainty, inflationary pressures, foreign currency volatility, disruptions in global supply chains, deteriorating trade relations, and declining consumer confidence. These factors contribute to broader market volatility and may continue to adversely impact our global business operations.
Structural change remains a key theme in the retail space. Consumers increasingly favor omnichannel and direct-to-consumer shopping experiences - highlighting the strategic importance of investing in digital, data analytics, and the customer journey.
While the macroeconomic environment is ever evolving, we remain steadfast in our commitment to executing the following key strategic initiatives which are aimed at driving long-term growth and creating shareholder value:
•Win with product.Utilizing our proven model - which combines talented design teams, a test-and react strategy, and industry-leading speed-to-market capability - to create trend-right product assortments across footwear, accessories, and apparel categories that resonate with our consumers.
•Invest in marketing.Continue investing in full-funnel marketing to deepen our connection with consumers.
•Expand in international markets.Expanding our international businesses in the Americas (ex. U.S.), EMEA, and APAC regions remains our largest long-term growth initiative.
•Grow non-footwear categories.Expanding our product offerings across various categories outside of footwear, including handbags, accessories, and apparel.
•Expand Direct-to-Consumer led by digital.Expanding our direct-to-consumer business with a focus on growing our digital business, including optimizing site functionality, personalization, and digital marketing, to enhance our consumers overall shopping experience.
•Strengthen the core U.S. wholesale footwear business. Continue leveraging product innovation and speed to market to grow our diversified business across all distribution tiers.
•Operational Efficiency.Streamlining operations, tightly managing costs, and maintaining a disciplined inventory management approach are ongoing and aimed at enhancing overall profitability.
•Sustainability Focus.Committing to our corporate social responsibility initiatives, as we work to minimize the negative impacts we have on the environment and maximize the positive impacts we have on our people and our communities.
Dividends
On November 4, 2025, our Board of Directors approved a quarterly dividend of $0.21 per share payable on December 26, 2025 to stockholders of record as of the close of business on December 15, 2025.
Key Highlights
Total revenue for the quarter ended September 30, 2025 increased 6.9% to $667,875, compared to $624,675 in the same period of last year driven by the acquisition of the Kurt Geiger. Net income attributable to Steven Madden, Ltd. was $20,528 in the third quarter of 2025, compared to net income of $55,278 in the same period of last year. Our effective tax rate for the third quarter of 2025 was 17.4%, compared to 25.5% in the third quarter of the prior year. Diluted income per share was
$0.29 per share on 71,157 diluted weighted average shares outstanding, compared to diluted earnings per share of $0.77 per share on 71,569 diluted weighted average shares outstanding in the third quarter of the prior year.
Our inventory turnover (calculated on a trailing four quarter average) for the quarter ended September 30, 2025 was 4.0 times, compared to 5.5 times at September 30, 2024. Excluding the Kurt Geiger business, our inventory turnover for the quarter ended September 30, 2025 was 4.5 times. Our total Company accounts receivable average collection days decreased to 58 days in the third quarter of 2025, compared to 66 days in the third quarter of 2024. As of September 30, 2025, we had $108,862 in cash, cash equivalents, and short-term investments, and total stockholders' equity of $886,135. Working capital was $520,512 as of September 30, 2025, compared to $491,880 as of September 30, 2024.
Amid a dynamic operating environment, we remain focused on executing our strategic priorities: delivering trend-right product, deepening connections with our consumers, expanding our international businesses, growing our non-footwear categories, expanding our direct-to-consumer business led by digital, strengthening our core U.S. wholesale business, and efficiently managing our inventory and expenses. At the same time, we are advancing our corporate social responsibility initiatives to create long-term value for our stakeholders, minimize the negative impacts on the environment, and maximize the positive impacts on our people and our communities.
Results of Operations
The following tables set forth information on operations for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| (in thousands, except for number of stores) | 2025 | 2024 | ||||||||||||||||||||||||
| CONSOLIDATED: | ||||||||||||||||||||||||||
| Net sales | $ | 664,200 | 99.4 | % | $ | 621,170 | 99.4 | % | ||||||||||||||||||
| Licensing fee income | 3,675 | 0.6 | % | 3,505 | 0.6 | % | ||||||||||||||||||||
| Total revenue | 667,875 | 100.0 | % | 624,675 | 100.0 | % | ||||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
390,500 | 58.5 | % | 365,131 | 58.5 | % | ||||||||||||||||||||
| Gross profit | 277,375 | 41.5 | % | 259,544 | 41.5 | % | ||||||||||||||||||||
| Operating expenses | 246,017 | 36.8 | % | 178,915 | 28.6 | % | ||||||||||||||||||||
| Change in valuation of contingent payment liability | - | - | % | (2,584) | (0.4 | %) | ||||||||||||||||||||
| Impairment of intangible | - | - | % | 8,635 | 1.4 | % | ||||||||||||||||||||
| Income from operations | 31,358 | 4.7 | % | 74,578 | 11.9 | % | ||||||||||||||||||||
| Interest and other (expense) / income - net | (4,947) | (0.7 | %) | 1,400 | 0.2 | % | ||||||||||||||||||||
| Income before provision for income taxes | $ | 26,411 | 4.0 | % | $ | 75,978 | 12.2 | % | ||||||||||||||||||
| Income attributable to Steven Madden, Ltd. | $ | 20,528 | 3.1 | % | $ | 55,278 | 8.8 | % | ||||||||||||||||||
| BY SEGMENT: | ||||||||||||||||||||||||||
| WHOLESALE FOOTWEAR SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 266,543 | 100.0 | % | $ | 299,315 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
174,859 | 65.6 | % | 188,537 | 63.0 | % | ||||||||||||||||||||
| Gross profit | 91,684 | 34.4 | % | 110,778 | 37.0 | % | ||||||||||||||||||||
| Operating expenses | 51,570 | 19.3 | % | 46,523 | 15.5 | % | ||||||||||||||||||||
| Income from operations | $ | 40,114 | 15.0 | % | $ | 64,255 | 21.5 | % | ||||||||||||||||||
| WHOLESALE ACCESSORIES/APPAREL SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 176,152 | 100.0 | % | $ | 196,400 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
123,186 | 69.9 | % | 131,437 | 66.9 | % | ||||||||||||||||||||
| Gross profit | 52,966 | 30.1 | % | 64,963 | 33.1 | % | ||||||||||||||||||||
| Operating expenses | 37,363 | 21.2 | % | 28,251 | 14.4 | % | ||||||||||||||||||||
| Change in valuation of contingent payment liability | - | - | % | (2,584) | (1.3 | %) | ||||||||||||||||||||
| Impairment of intangible | - | - | % | 8,635 | 4.4 | % | ||||||||||||||||||||
| Income from operations | $ | 15,603 | 8.9 | % | $ | 30,661 | 15.6 | % | ||||||||||||||||||
| DIRECT-TO-CONSUMER SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 221,505 | 100.0 | % | $ | 125,455 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
92,455 | 41.7 | % | 45,157 | 36.0 | % | ||||||||||||||||||||
| Gross profit | 129,050 | 58.3 | % | 80,298 | 64.0 | % | ||||||||||||||||||||
| Operating expenses | 133,490 | 60.3 | % | 78,799 | 62.8 | % | ||||||||||||||||||||
| (Loss) / income from operations | $ | (4,440) | (2.0 | %) | $ | 1,499 | 1.2 | % | ||||||||||||||||||
| Number of stores (excludes concessions) | 404 | 287 | ||||||||||||||||||||||||
| LICENSING SEGMENT: | ||||||||||||||||||||||||||
| Licensing income | $ | 3,675 | 100.0 | % | $ | 3,505 | 100.0 | % | ||||||||||||||||||
| Gross profit | 3,675 | 100.0 | % | 3,505 | 100.0 | % | ||||||||||||||||||||
| Operating expenses | 217 | 5.9 | % | 277 | 7.9 | % | ||||||||||||||||||||
| Income from operations | $ | 3,458 | 94.1 | % | $ | 3,228 | 92.1 | % | ||||||||||||||||||
| CORPORATE: | ||||||||||||||||||||||||||
| Operating expenses | $ | 23,377 | - | % | $ | 25,065 | - | % | ||||||||||||||||||
| Loss from operations | $ | (23,377) | - | % | $ | (25,065) | - | % | ||||||||||||||||||
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Consolidated
Total revenue for the three months ended September 30, 2025 increased 6.9% to $667,875, compared to $624,675 in the comparable period in the prior year, primarily attributable to incremental revenue from the acquisition of Kurt Geiger, partially offset by a decline in the organic business primarily attributable to tariff-related impacts.
Gross profit for the three months ended September 30, 2025 was $277,375, or 41.5% of total revenue, compared to $259,544, or 41.5% of total revenue, in the comparable period in the prior year. Gross profit as a percentage of total revenue remained flat despite tariff-related impacts affecting our Wholesale Footwear, Wholesale Accessories/Apparel, and Direct-to-Consumer segments. These adverse impacts were offset by a greater mix of the higher-margin direct-to-consumer business, primarily related to the acquisition of Kurt Geiger. Gross profit in both periods included $12,309 and $59, respectively, related to purchase accounting fair value adjustments of inventory from acquired businesses.
Operating expenses for the three months ended September 30, 2025 were $246,017, or 36.8% of total revenue, compared to $178,915, or 28.6% of total revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of total revenue was primarily attributable to the acquisition of Kurt Geiger. The current-year period included charges of $1,087 related to certain severances and termination benefits, $695 related to acquisition costs and the formation of joint ventures, and $803 related to legal costs as a result of litigation settlements. The comparable period in the prior year included charges of $8,635 related to the impairment of an intangible, $3,199 related to a loss on the divestiture of a business, and $1,480 related to acquisition costs and the formation of joint ventures, as well as a benefit of $2,584 related to the change in valuation of a contingent payment liability.
Income from operations for the three months ended September 30, 2025 was $31,358, or 4.7% of total revenue, compared to $74,578, or 11.9% of total revenue, in the comparable period in the prior year. The effective tax rate for the three months ended September 30, 2025 was 17.4% compared to 25.5%, in the comparable period in the prior year. The difference between the Company's effective tax rates was primarily due to changes in non-deductible expenses related to the acquisition of the Kurt Geiger business as a result of our transaction cost analysis.
Net income attributable to Steven Madden, Ltd. for the three months ended September 30, 2025 was $20,528, compared to $55,278, in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the three months ended September 30, 2025 was $266,543, or 39.9% of total revenue, compared to $299,315, or 47.9% of total revenue, in the comparable period in the prior year. The decrease of 10.9% was primarily driven by tariff-related impacts and timing of shipments, partially offset by incremental revenue from the acquisition of Kurt Geiger.
Gross profit was $91,684, or 34.4% of Wholesale Footwear revenue, compared to $110,778, or 37.0%, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was driven by the impact of tariffs on goods imported into the United States. Gross profit in the current-year period also included $1,737 related to the purchase accounting fair value adjustment of inventory in connection with the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2025 were $51,570, or 19.3% of Wholesale Footwear revenue, compared to $46,523, or 15.5% of Wholesale Footwear revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue primarily reflects the deleveraging of operating expenses on a lower revenue base and the addition of the Kurt Geiger business. The current-year period included charges of $1,592 related to legal costs as a result of litigation settlements, $491 related to certain severances and termination benefits, and $17 related to acquisition costs and the formation of joint ventures. The comparable period in the prior year included charges of $109 due to acquisition costs and formation of joint ventures.
Income from operations for the three months ended September 30, 2025 totaled $40,114, or 15.0% of Wholesale Footwear revenue, compared to $64,255, or 21.5% of Wholesale Footwear revenue in the comparable period in the prior year.
Wholesale Accessories/Apparel Segment
Revenue from the Wholesale Accessories/Apparel segment for the three months ended September 30, 2025 was $176,152, or 26.4% of total revenue, compared to $196,400, or 31.4% of total revenue, in the comparable period in the prior year. The decrease of 10.3% was primarily driven by tariff-related impacts and a decline in our off-price business, partially offset by incremental revenue from the acquisition of Kurt Geiger.
Gross profit was $52,966, or 30.1% of Wholesale Accessories/Apparel revenue, for the three months ended September 30, 2025, compared to $64,963, or 33.1% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was driven by the impact of tariffs on goods imported into the United States. Gross profit in both periods also included $2,506 and $59, respectively, related to purchase accounting fair value adjustments of inventory from acquired businesses.
Operating expenses for the three months ended September 30, 2025 were $37,363, or 21.2% of Wholesale Accessories/Apparel revenue, compared to $28,251, or 14.4% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was primarily attributable to the deleveraging of operating expenses on a lower revenue base and the addition of the Kurt Geiger business. The current-year period also included charges of $780 related to legal costs as a result of litigation settlements, $122 related to certain severances and termination benefits, and $8 related to acquisition costs and the formation of joint ventures. The comparable period in the prior year included charges of $8,635 related to the impairment of an intangible, $195 related to acquisition costs and the formation of joint ventures, as well as a benefit of $2,584 related to the change in valuation of a contingent payment liability.
Income from operations for the three months ended September 30, 2025 was $15,603, or 8.9% of Wholesale Accessories/Apparel revenue, compared to $30,661, or 15.6% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year.
Direct-to-Consumer Segment
Revenue from the Direct-to-Consumer segment for the three months ended September 30, 2025 was $221,505, or 33.2% of total revenue, compared to $125,455, or 20.1% of total revenue, in the comparable period in the prior year period. The increase of 76.6% was primarily driven by incremental revenue from brick-and-mortar stores, concessions, and digital businesses related to the acquisition of Kurt Geiger. As of September 30, 2025, we operated 397 brick-and-mortar stores, seven e-commerce websites, and 133 concessions in international markets. This includes 74 company-operated brick-and-mortar retail stores, including 29 outlets, as well as two e-commerce websites and 72 concessions related to Kurt Geiger. As of September 30, 2024, we operated 282 brick-and-mortar stores, five e-commerce websites, and 67 concessions in international markets.
Gross profit for the three months ended September 30, 2025 was $129,050, or 58.3% of Direct-to-Consumer revenue, compared to $80,298, or 64.0% of Direct-to-Consumer revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was primarily driven by the impact of tariffs on goods imported into the United States and the addition of the relatively lower gross margin concessions business in connection with the acquisition of Kurt Geiger. Gross margin also included a purchase accounting fair value adjustment of inventory of $8,066 in connection with the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2025 were $133,490, or 60.3% of Direct-to-Consumer revenue, compared to $78,799, or 62.8% of Direct-to-Consumer revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of revenue was primarily attributable to the acquisition of Kurt Geiger. The current-year period included charges of $671 related to acquisition costs and the formation joint ventures, and $469 related to certain severances and termination benefits. The comparable period in the prior year included charges of $3,199 related to a loss on the divestiture of a business and $1,176 related to acquisition costs and the formation of joint ventures.
Loss from operations for the three months ended September 30, 2025 was $4,440, or (2.0%) of Direct-to-Consumer revenue, compared to income from operations of $1,499, or 1.2% of Direct-to-Consumer revenue, in the comparable period in the prior year.
Licensing Segment
Royalty income from the Licensing segment for the three months ended September 30, 2025 was $3,675, or 0.6% of total revenue, compared to $3,505, or 0.6% of total revenue, in the comparable period in the prior year. Operating expenses for the three months ended September 30, 2025 were $217, compared to $277 in the comparable period of the prior year. Income from operations for the three months ended September 30, 2025 was $3,458, compared to $3,228 in the comparable period in the prior year.
Corporate
Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These expenses primarily related to corporate executives, corporate finance, corporate social responsibility, legal, human resources,
information technology, cybersecurity, and other shared services. Corporate operating expenses for the three months ended September 30, 2025 were $23,377, or 3.5% of total revenue, compared to $25,065, or 4.0% of total revenue, in the comparable period in the prior year.
Results of Operations
The following tables set forth information on operations for the periods indicated:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| (in thousands, except for number of stores) | 2025 | 2024 | ||||||||||||||||||||||||
| CONSOLIDATED: | ||||||||||||||||||||||||||
| Net sales | $ | 1,771,672 | 99.5 | % | $ | 1,693,446 | 99.6 | % | ||||||||||||||||||
| Licensing income | 8,737 | 0.5 | % | 7,163 | 0.4 | % | ||||||||||||||||||||
| Total revenue | 1,780,409 | 100.0 | % | 1,700,609 | 100.0 | % | ||||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
1,050,740 | 59.0 | % | 999,121 | 58.8 | % | ||||||||||||||||||||
| Gross profit | 729,669 | 41.0 | % | 701,488 | 41.2 | % | ||||||||||||||||||||
| Operating expenses | 687,145 | 38.6 | % | 507,343 | 29.8 | % | ||||||||||||||||||||
| Change in valuation of contingent payment liability | (2,075) | (0.1 | %) | 5,616 | 0.3 | % | ||||||||||||||||||||
| Impairment of intangibles | - | - | % | 10,335 | 0.6 | % | ||||||||||||||||||||
| Income from operations | 44,599 | 2.5 | % | 178,194 | 10.5 | % | ||||||||||||||||||||
| Gain on derivative | 9,252 | 0.5 | % | - | - | % | ||||||||||||||||||||
| Interest and other (expense) / income - net | (7,913) | (0.4 | %) | 4,309 | 0.3 | % | ||||||||||||||||||||
| Income before provision for income taxes | $ | 45,938 | 2.6 | % | $ | 182,503 | 10.7 | % | ||||||||||||||||||
| Income attributable to Steven Madden, Ltd. | $ | 21,474 | 1.2 | % | $ | 134,589 | 7.9 | % | ||||||||||||||||||
| BY SEGMENT: | ||||||||||||||||||||||||||
| WHOLESALE FOOTWEAR SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 782,827 | 100.0 | % | $ | 832,000 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
513,967 | 65.7 | % | 533,814 | 64.2 | % | ||||||||||||||||||||
| Gross profit | 268,860 | 34.3 | % | 298,186 | 35.8 | % | ||||||||||||||||||||
| Operating expenses | 140,753 | 18.0 | % | 131,877 | 15.9 | % | ||||||||||||||||||||
| Income from operations | $ | 128,107 | 16.4 | % | $ | 166,309 | 20.0 | % | ||||||||||||||||||
| WHOLESALE ACCESSORIES/APPAREL SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 459,774 | 100.0 | % | $ | 487,252 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
318,950 | 69.4 | % | 328,694 | 67.5 | % | ||||||||||||||||||||
| Gross profit | 140,824 | 30.6 | % | 158,558 | 32.5 | % | ||||||||||||||||||||
| Operating expenses | 98,975 | 21.5 | % | 80,129 | 16.4 | % | ||||||||||||||||||||
| Impairment of fixed assets and lease right-of-use assets | - | - | % | - | - | % | ||||||||||||||||||||
| Change in valuation of contingent payment liability | (2,075) | (0.5 | %) | 5,616 | 1.2 | % | ||||||||||||||||||||
| Impairment of intangible | - | - | % | 8,635 | 1.8 | % | ||||||||||||||||||||
| Income from operations | $ | 43,924 | 9.6 | % | $ | 64,178 | 13.2 | % | ||||||||||||||||||
| DIRECT-TO-CONSUMER SEGMENT: | ||||||||||||||||||||||||||
| Total revenue | $ | 529,071 | 100.0 | % | $ | 374,194 | 100.0 | % | ||||||||||||||||||
|
Cost of sales (exclusive of depreciation and amortization)
|
217,823 | 41.2 | % | 136,613 | 36.5 | % | ||||||||||||||||||||
| Gross profit | 311,248 | 58.8 | % | 237,581 | 63.5 | % | ||||||||||||||||||||
| Operating expenses | 366,250 | 69.2 | % | 221,317 | 59.1 | % | ||||||||||||||||||||
| Impairment of intangible | - | - | % | 1,700 | 0.5 | % | ||||||||||||||||||||
| (Loss) / income from operations | $ | (55,002) | (10.4 | %) | $ | 14,564 | 3.9 | % | ||||||||||||||||||
| Number of stores | 404 | 287 | ||||||||||||||||||||||||
| LICENSING SEGMENT: | ||||||||||||||||||||||||||
| Licensing income | $ | 8,737 | 100.0 | % | $ | 7,163 | 100.0 | % | ||||||||||||||||||
| Gross profit | 8,737 | 100.0 | % | 7,163 | 100.0 | % | ||||||||||||||||||||
| Operating expenses | 1,097 | 12.6 | % | 1,239 | 17.3 | % | ||||||||||||||||||||
| Income from operations | $ | 7,640 | 87.4 | % | $ | 5,924 | 82.7 | % | ||||||||||||||||||
| CORPORATE: | ||||||||||||||||||||||||||
| Operating expenses | 80,070 | - | % | $ | 72,781 | - | % | |||||||||||||||||||
| Loss from operations | $ | (80,070) | - | % | $ | (72,781) | - | % | ||||||||||||||||||
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Consolidated
Total revenue for the nine months ended September 30, 2025 increased 4.7% to $1,780,409, compared to $1,700,609 in the comparable period in the prior year, primarily attributable to incremental revenue from the acquisition of Kurt Geiger, partially offset by a decline in the organic business primarily attributable to tariff-related impacts.
Gross profit for the nine months ended September 30, 2025 was $729,669, or 41.0% of total revenue, compared to $701,488, or 41.2% of total revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of total revenue was driven by tariff-related impacts, partially offset by a greater mix of the higher-margin direct-to-consumer business, primarily related to the acquisition of Kurt Geiger. Gross profit in both periods also included $20,840 and $393, respectively, related to purchase accounting fair value adjustments of inventory from acquired businesses.
Operating expenses for the nine months ended September 30, 2025 were $687,145, or 38.6% of total revenue, compared to $507,343, or 29.8% of total revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of total revenue was primarily attributable to the acquisition of Kurt Geiger due to certain acquisition-related transaction costs. The current-year period included $38,819 of compensation expense as a result of acquisition-related sellers proceeds which were reallocated from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. The current-year period also included charges of $12,017 related to acquisition costs and the formation of joint ventures, $6,732 related to legal costs as a result of litigation settlements, $4,030 related to certain severances and termination benefits, as well as a benefit of $2,075 related to the change in valuation of contingent payment liabilities. The comparable period in the prior year included charges of $10,335 related to the impairment of an intangible, $5,616 related to the change in valuation of a contingent payment liability, $3,199 related to a loss on the divestiture of a business, $2,776 related to acquisition costs and the formation of joint ventures, and $326 related to working capital adjustments in connection with the Almost Famous acquisition.
Income from operations for the nine months ended September 30, 2025 was $44,599, or 2.5% of total revenue, compared to $178,194, or 10.5% of total revenue, in the comparable period in the prior year. The effective tax rate for the nine months ended September 30, 2025 was 47.0%, compared to 24.3% in the comparable period in the prior year. The difference between the Company's effective tax rates was primarily due to non-deductible expenses related to the acquisition of the Kurt Geiger business.
Net income attributable to Steven Madden, Ltd. for the nine months ended September 30, 2025 was $21,474, compared to net income of $134,589 in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the nine months ended September 30, 2025 was $782,827, or 44.0% of total revenue, compared to $832,000, or 48.9% of total revenue, in the comparable period in the prior year. The decrease of 5.9% was primarily driven by tariff-related impacts on our off-price and mass merchant businesses, partially offset by incremental revenue from the acquisition of Kurt Geiger.
Gross profit for the nine months ended September 30, 2025 was $268,860, or 34.3% of Wholesale Footwear revenue, compared to $298,186, or 35.8% of Wholesale Footwear revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was primarily driven by the impact of tariffs on goods imported into the United States. Gross profit in the current-year period also included $3,180 related to the purchase accounting fair value adjustments of inventory in connection with the Kurt Geiger acquisition.
Operating expenses for the nine months ended September 30, 2025 were $140,753, or 18.0% of Wholesale Footwear revenue, compared to $131,877, or 15.9% of Wholesale Footwear revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue primarily reflects the deleveraging of operating expenses on a lower revenue base and our continued investment in marketing and advertising. The current-year period included charges of $1,592 related to legal costs as a result of litigation settlements, $1,438 related to certain severances and termination benefits, and $97 related to acquisition costs and the formation of joint ventures. The comparable period in the prior year included charges of $109 related to acquisition costs and the formation of joint ventures.
Income from operations for the nine months ended September 30, 2025 totaled $128,107, or 16.4% of Wholesale Footwear revenue, compared to $166,309, or 20.0% of Wholesale Footwear revenue, in the comparable period in the prior year.
Wholesale Accessories/Apparel Segment
Revenue from the Wholesale Accessories/Apparel segment for the nine months ended September 30, 2025 was $459,774, or 25.8% of total revenue, compared to $487,252, or 28.7% of total revenue, in the comparable period in the prior year. The decrease of 5.6% was primarily driven by tariff-related impacts and a decline in our off-price business, partially offset by incremental revenue from the acquisition of Kurt Geiger.
Gross profit for the nine months ended September 30, 2025 was $140,824, or 30.6% of Wholesale Accessories/Apparel revenue, compared to $158,558, or 32.5% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was driven by the impact of tariffs on goods imported into the United States. Gross profit in both periods also included $4,599 and $393, respectively, related to the purchase accounting fair value adjustments of inventory from acquired businesses.
Operating expenses for the nine months ended September 30, 2025 were $98,975, or 21.5% of Wholesale Accessories/Apparel revenue, compared to $80,129, or 16.4% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was primarily attributable to the deleveraging of operating expenses on a lower revenue base, and our continued investment in marketing and advertising. The current-year period included charges of $2,759 related to legal costs as a result of litigation settlements, $449 related to certain severances and termination benefits, and $38 related to acquisition costs and the formation of joint ventures, as well as a benefit of $2,075 related to the change in valuation of contingent payment liabilities. The comparable period in the prior year included charges of $8,635 related to the impairment of an intangible, $5,616 related to the change in valuation of a contingent payment liability, $398 related to acquisition costs and the formation of joint ventures, and $326 related to working capital adjustments in connection with the Almost Famous acquisition.
Income from operations for the Wholesale Accessories/Apparel segment for the nine months ended September 30, 2025 was $43,924, or 9.6% of Wholesale Accessories/Apparel revenue, compared to $64,178, or 13.2% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year.
Direct-to-Consumer Segment
Revenue from the Direct-to-Consumer segment for the nine months ended September 30, 2025 was $529,071, or 29.7% of total revenue, compared to $374,194, or 22.0% of total revenue, in the comparable period in the prior year. The increase of 41.4% was driven by incremental revenue from brick-and-mortar stores, concessions, and digital businesses in connection with the acquisition of Kurt Geiger.
Gross profit for the nine months ended September 30, 2025 was $311,248, or 58.8% of Direct-to-Consumer revenue, compared to $237,581, or 63.5% of Direct-to-Consumer revenue, in the comparable period in the prior year. The decrease in gross profit as a percentage of revenue was primarily due to a purchase accounting fair value adjustment of inventory of $13,060 in connection with acquired businesses, the impact of tariffs on goods imported into the United States, and the addition of the relatively lower gross margin concessions business in connection with the acquisition of Kurt Geiger.
Operating expenses for the nine months ended September 30, 2025 were $366,250, or 69.2% of Direct-to-Consumer revenue, compared to $221,317, or 59.1% of Direct-to-Consumer revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of revenue was primarily attributable to acquisition-related transaction costs in connection with the acquisition of Kurt Geiger. The current-year period included $38,819 of compensation expense as a result of acquisition-related sellers proceeds which were reallocated from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. The current-year period also included charges of $8,363 related to acquisition costs in connection with the Kurt Geiger acquisition and the formation of joint ventures, $1,453 related to legal costs as a result of litigation settlements, and $1,384 related to certain severances and termination benefits. The comparable period in the prior year included charges of $1,700 related to the impairment of an intangible, $3,199 related to a loss on the divestiture of a business and $2,268 related to acquisition costs and the formation of joint ventures.
Loss from operations for the nine months ended September 30, 2025 was $55,002, or (10.4)% of Direct-to-Consumer revenue, compared to income from operations of $14,564, or 3.9% of Direct-to-Consumer revenue, in the comparable period in the prior year.
Licensing Segment
Royalty income from the Licensing segment for the nine months ended September 30, 2025 was $8,737, or 0.5% of total revenue, compared to $7,163, or 0.4% of total revenue, in the comparable period in the prior year. Operating expenses for
the nine months ended September 30, 2025 were $1,097, compared to $1,239 in the comparable period in the prior year. Income from operations for the nine months ended September 30, 2025 was $7,640, compared to $5,924 in the comparable period in the prior year.
Corporate
Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These expenses primarily related to corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cybersecurity, and other shared services. Corporate operating expenses for the nine months ended September 30, 2025 were $80,070 or 4.5% of total revenue, compared to $72,781 or 4.3% of total revenue, in the comparable period in the prior year.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, cash, cash equivalents, short-term investments and borrowing capacity under our Credit Agreement. Cash, cash equivalents, and short-term investments totaled $108,862 and $203,408 at September 30, 2025 and December 31, 2024, respectively, and of the total cash, cash equivalents, and short-term investments as of September 30, 2025, $89,861, or approximately 88%, was held in our foreign subsidiaries, and of the total cash, cash equivalents, and short-term investments as of December 31, 2024, $119,569, or approximately 59%, was held in our foreign subsidiaries.
As of September 30, 2025, we had working capital of $520,512, cash and cash equivalents of $108,722, short-term investments of $140, and $2,703 in letters of credit outstanding.
Acquisition of Kurt Geiger and Credit Agreement
On May 6, 2025 (the "Acquisition Date"), the Company, through its wholly owned subsidiary, SML UK Holding Ltd, completed the acquisition of the entire issued share capital of Mercury Acquisitions Topco Limited ("MATL") for an aggregate preliminary purchase price of $403,348, pursuant to the terms of the sale and purchase deed. We funded the cash consideration and the payment of transaction-related expenses through borrowings under the Credit Agreement and cash on hand.
On May 6, 2025, we entered into an Amended and Restated Credit Agreement (the "Credit Agreement") with various lenders and Citizens Bank, as administrative agent (in such capacity, the "Agent"), which provides for a term loan facility in the amount of $300,000 and a revolving credit facility in the amount of $250,000. The Credit Agreement amends and restates in its entirety the previous Credit Agreement, dated as of July 22, 2020, among the Company, the various lenders party thereto and Citizens Bank, as administrative agent. The Company also has used, and intends to continue to use, the revolving credit facility for general corporate purposes.
The Credit Agreement provides for a term loan facility and a revolving credit facility scheduled to mature on May 6, 2030. We may from time to time increase the revolving commitments and/or request incremental term loans in an aggregate principal amount of up to $275,000 if certain conditions are satisfied, including (i) the absence of any default under the Credit Agreement, and (ii) obtaining the consent of the lenders participating in each such increase.
At September 30, 2025, the total outstanding borrowings under our Credit Agreement in the form of cash borrowings and standby letters of credit were $300,000 and $2,703, respectively.
During the third quarter of 2025, the Company made voluntary early repayments of $22,500 on its term loan facility. These repayments were made using available cash on hand and were not contractually required. These repayments reflect the Company's strong liquidity position and commitment to reducing leverage and interest expense over time. Under the terms of the Credit Agreement, the first scheduled principal repayment was not due until October 1, 2025.
During October 2025, the Company initiated borrowings on its revolving credit facility of $30,000. On November 7, 2025, the Company made a voluntary early repayment of $15,000 on its revolving credit facility. This repayment was made using available cash on hand and was not contractually required.
We believe that based on our current financial position and available cash, cash equivalents, short-term investments, we will meet all our financial commitments and operating needs for at least the next twelve months. In addition, our $250,000 asset-based revolving credit facility provides us with additional liquidity and flexibility on a long-term basis.
Cash Flows
A summary of our cash provided by and used in operating, investing, and financing activities was as follows:
Operating Activities
Cash provided by operating activities was $71,072 for the nine months ended September 30, 2025, compared to $94,245 in the same period of the prior year. The decrease in cash provided by operations was primarily due to lower net income in the current year, partially offset by higher non-cash adjustments for depreciation and amortization which was primarily attributable to the acquisition of Kurt Geiger. The decrease was also partially offset by net favorable working capital driven by timing of factor accounts receivable collections.
Investing Activities
Cash used in investing activities was $392,861 for the nine months ended September 30, 2025, which consisted of $371,554 related to the acquisition of the Kurt Geiger business (net of cash acquired), capital expenditures of $32,338 for leasehold improvements, new stores, and systems enhancements and $2,379 related to the acquisitions of joint ventures. This was partially offset by $13,410 related to proceeds from the sales of short-term investments.
Financing Activities
Cash provided by financing activities was $237,540 for the nine months ended September 30, 2025, which primarily consisted of net transaction-related borrowings of $300,000, partially offset by dividends paid of $45,692, financing costs paid of $8,955 in connection with the Credit Agreement, and net settlements of stock awards of $8,367.
Contractual and Other Obligations
Firm Commitments
Our contractual obligations as of September 30, 2025 were as follows:
| Payment due by period | ||||||||||||||||||||||||||||||||
| Contractual Obligations | Total | Remainder of 2025 | 2026-2027 | 2028-2029 | 2030 and after | |||||||||||||||||||||||||||
|
Operating lease obligations(1)
|
$ | 287,630 | $ | 18,123 | $ | 117,156 | $ | 73,758 | $ | 78,593 | ||||||||||||||||||||||
|
Purchase obligations(2)
|
459,888 | 422,122 | 37,766 | - | - | |||||||||||||||||||||||||||
|
Future minimum royalty and advertising payments(3)
|
7,023 | 1,023 | 6,000 | - | - | |||||||||||||||||||||||||||
|
Employment Agreements(4)
|
52,511 | 2,543 | 17,985 | 16,491 | 15,492 | |||||||||||||||||||||||||||
| Total | $ | 807,052 | $ | 443,811 | $ | 178,907 | $ | 90,249 | $ | 94,085 | ||||||||||||||||||||||
(1) Refer to Note 6 - Leases to the Condensed Consolidated Financial Statements included in this Quarterly Report for further information.
(2)Substantially all our products are produced by independent manufacturers at overseas locations, the majority of which are located in China, with a growing percentage located in Cambodia, Vietnam, Mexico, Brazil, India, Bangladesh, and various other countries in Asia, Europe, and Africa. We have not entered into any long-term manufacturing or supply contracts with any of these foreign manufacturers. We believe that a sufficient number of alternative sources exist outside of the United States for the manufacture of our products. Purchases are made primarily in United States dollars.
(3) Future minimum royalty and advertising payments represent our obligation in connection with our licenses agreement. Refer to Note 13 - Commitments, Contingencies, and Other to the Condensed Consolidated Financial Statements included in this Quarterly Report for further information.
(4)We have employment agreements with our Founder and Creative and Design Chief, Steven Madden, and certain executive officers, which provide for the payment of compensation. In addition, some of these employment agreements provide for incentive compensation based on various performance criteria and some provide for discretionary bonuses as well as other benefits, including stock-based compensation.
Off-Balance Sheet Arrangements
In addition to the commitments included in the Contractual Obligations table above, we have letters of credit of $2,703 outstanding as of September 30, 2025 related to the purchase of inventory and certain lease obligations. These letters of credit expire at various dates through 2030.
We do not maintain any other off-balance sheet arrangements, transactions, obligations, or other relationships with unconsolidated entities that would be expected to have a material current or future effect on our consolidated financial statements. Refer to Note 13 - Commitments, Contingencies, and Other to the Condensed Consolidated Financial Statements included in this Quarterly Report for further information.
Dividends
On November 4, 2025, our Board of Directors approved a quarterly cash dividend. The quarterly dividend of $0.21 per share is payable on December 26, 2025 to stockholders of record as of the close of business on December 15, 2025.
Future quarterly cash dividend payments are subject to the discretion of our Board of Directors and contingent upon future earnings, our financial condition, capital requirements, general business conditions, and other factors. Therefore, we can give no assurance that dividends will be paid to holders of our common stock in the future.
Critical Accounting Policies and the Use of Estimates
There have been no material changes to our critical accounting policies and the use of estimates from the disclosures reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on March 3, 2025.
Steven Madden Ltd. published this content on November 10, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 10, 2025 at 15:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]