Steven Madden Ltd.

07/31/2026 | Press release | Distributed by Public on 07/31/2026 13:00

Quarterly Report for Quarter Ending June 30, 2026 (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 six months ended June 30, 2026 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 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;
•our dependence on the hiring and retention of key personnel;
•our ability to successfully implement growth strategies and integrate acquired businesses;
•changes in trade policies, additional tariffs on product imported to the United States or other territories where we operate, retaliatory trade actions taken by other countries, and resulting trade wars;
•supply chain disruptions to product delivery systems and logistics, and our ability to properly manage inventory;
•geopolitical tensions in the regions in which we operate and any related challenging macroeconomic conditions globally that may materially 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 reliance on independent manufacturers to produce and deliver products in a timely manner or to meet our quality standards if we experience a supply chain disruption and we are unable to secure an alternative source for our products;
•our dependence on one or more of our significant customers;
•quarterly fluctuations of our financial results;
•extreme or unseasonable weather conditions in locations where we or our customers and suppliers are located;
•fluctuation of our stock price if our operating results are inconsistent with our forecasts or those of analysts who follow us;
•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 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;
•disruption of our information technology systems or e-commerce platforms;
•cybersecurity risks and costs of defending against, mitigating, and responding to data security threats and breaches impacting the Company;
•our ability to effectively implement artificial intelligence and data-driven technologies across our operations, and the risks that such technologies may not perform as expected, may be subject to regulatory constraints, or may increase operational, legal, or cybersecurity risks;
•litigation or other legal proceedings could divert management resources and result in additional costs;
•legal, regulatory, political, and economic risks that may affect our operations in international markets;
•exposure to foreign exchange rate fluctuations;
•our ability to adequately protect our trademarks and other intellectual property rights;
•changes in economic conditions;
•additional tax liabilities resulting from audits by various taxing authorities;
•changes in U.S. and foreign tax laws that could have an adverse effect on our financial results;
•the loss of a significant license;
•the actions of our licensees that may result in diminished brand integrity;
•failure of our manufacturers, the manufacturers used by our licensees, or our licensees themselves to use acceptable labor practices or to otherwise comply with local laws and other standards;
•our ability to maintain effective internal control over our financial reporting; 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, 2025, should be considered in evaluating any forward-looking statements contained in this report. We do not undertake, and disclaim, 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 design, source, and market 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, the United Kingdom, Europe, Canada, and Mexico. Additionally, we operate in other international markets through our joint ventures in South Africa, the Middle East, Israel, Australia, 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, third-party concessions in international markets, and e-commerce platforms, in the United States, the 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 with speed-to-market.
The Company's reportable operating segments consist of the following:
•Wholesale Footwear. This segment designs, sources, and markets our brands and sells our products, consisting of footwear, to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, the United Kingdom, Europe, Canada, Mexico, 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, the United Kingdom, Europe, Canada, Mexico, 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 London, Dolce Vita, and Carvela full-price retail stores, Steve Madden, Kurt Geiger
London, and Carvela outlet stores, directly-operated e-commerce platforms, directly-operated concessions in international markets, and also operates third-party concessions in luxury and premium department stores primarily in the United Kingdom. We operate retail locations in regional malls and shopping centers, as well as high streets in various cities across the United States, the United Kingdom, Europe, Canada, and Mexico, as well as through our joint ventures in international markets.
•Licensing. This segment engages in the licensing of the Steve Madden®, Kurt Geiger®, and Betsey Johnson® 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.
Macroeconomic Conditions and Industry Trends
The second quarter of 2026 continued to be shaped by an evolving macroeconomic environment, requiring ongoing flexibility across our sourcing, supply chain, and go-to-market strategies.
Global trade policy remained a significant area of focus during the second quarter of 2026. Following the United States Supreme Court's February 2026 decision concluding that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized, and the U.S. Court of International Trade's ("CIT") subsequent order directing U.S. Customs and Border Protection ("CBP") to provide refunds of previously collected amounts, including applicable interest, the administration continued to pursue alternative trade measures, including the imposition of tariffs under Sections 301 and 122 of the Trade Act of 1974, as well as other statutory authorities that may be used to impose tariffs or other import restrictions. In addition, the ongoing review of the United States-Mexico-Canada Agreement ("USMCA"), together with developments relating to other trade agreements and international trade arrangements, has contributed to, and may continue to contribute to, uncertainty in the global trade environment. At this time, the timing, scope, and magnitude of tariff-related impacts remain uncertain and will depend on future developments in U.S. trade policy, trade agreement negotiations, judicial proceedings, and regulatory actions. In response to this evolving environment, we have continued to maintain diversified sourcing strategies, selectively adjust pricing where appropriate, and pursue cost management initiatives.
Interest rates in the United States and certain international markets have moderated from prior peaks but remain elevated relative to historical levels, continuing to influence consumer borrowing costs and discretionary spending patterns. Consumer demand has remained mixed across channels and regions, reflecting ongoing sensitivity to pricing, inflationary pressures, and broader economic uncertainty. Foreign currency volatility and concerns regarding global economic growth have also continued to influence consumer sentiment.
Geopolitical developments continued to influence the global operating environment during the quarter. Ongoing conflicts in Ukraine and the Middle East, including persistent tensions involving Iran, together with broader strategic tensions between the United States and China, continued to contribute to uncertainty in global markets. These conditions have affected, and may continue to affect, supply chains, trade flows, input costs, freight markets, and broader global business operations.
The retail environment continues to evolve as consumers increasingly expect integrated shopping experiences across digital and physical channels. We remain focused on strengthening our omnichannel capabilities and enhancing the consumer experience through continued investments in e-commerce, data analytics, and digital engagement. Across the wholesale channel, customers have continued to prioritize inventory discipline and cautious buying patterns in light of ongoing economic and trade-related uncertainty.
While the macroeconomic environment continues to evolve, some things remain the same, including our steadfast 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 tiers of distribution.
•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 July 29, 2026, our Board of Directors approved a quarterly dividend of $0.21 per share payable on September 24, 2026 to stockholders of record as of the close of business on September 11, 2026.
Key Highlights
Total revenue for the quarter ended June 30, 2026 increased 19.1% to $665,865, compared to $559,000 in the same period of last year, primarily driven by the acquisition of Kurt Geiger and a strong performance in the legacy branded business, partially offset by a decline in the private label business. Net income attributable to Steven Madden, Ltd. was $27,727 in the second quarter of 2026, compared to a net loss of $39,477 in the same period of last year. Our effective tax rate for the second quarter of 2026 was 26.6%, compared to (11.2)% in the same period of last year. Diluted income per share was $0.38 per share on 72,164 diluted weighted average shares outstanding, compared to diluted loss per share of $0.56 per share on 70,870 diluted weighted average shares outstanding in the second quarter of the prior year.
Our inventory turnover (calculated on a trailing four quarter average) for the quarter ended June 30, 2026 was 3.6 times, compared to 4.6 times at June 30, 2025. Excluding the Kurt Geiger business, our inventory turnover for the quarter ended June 30, 2026 was 4.8 times, compared to 5.2 times for the quarter ended June 30, 2025. Our total Company accounts receivable average collection days decreased to 61 days in the second quarter of 2026, compared to 71 days in the second quarter of 2025. As of June 30, 2026, we had $94,739 in cash and cash equivalents, and total stockholders' equity of $972,104. Working capital was $441,931 as of June 30, 2026, compared to $501,184 as of June 30, 2025.
Amid a dynamic and uncertain operating environment, we remain focused on disciplined execution of 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 maintaining a strong focus on cost control and operational efficiency. We also remain committed to 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 June 30,
(in thousands, except for number of stores) 2026 2025
CONSOLIDATED:
Net sales $ 662,914 99.6 % $ 556,090 99.5 %
Licensing income 2,951 0.4 % 2,910 0.5 %
Total revenue 665,865 100.0 % 559,000 100.0 %
Cost of sales (exclusive of depreciation and amortization)
356,206 53.5 % 332,973 59.6 %
Gross profit 309,659 46.5 % 226,027 40.4 %
Operating expenses 270,340 40.6 % 263,865 47.2 %
Change in valuation of contingent payment liability - - % 2,420 0.4 %
Income / (loss) from operations 39,319 5.9 % (40,258) (7.2) %
Gain on derivatives - - % 9,252 1.7 %
Interest and other expense (1,257) (0.2) % (3,795) (0.7) %
Income / (loss) before provision for income taxes $ 38,062 5.7 % $ (34,801) (6.2) %
Net income / (loss) attributable to Steven Madden, Ltd. $ 27,727 4.2 % $ (39,477) (7.1) %
BY SEGMENT:
WHOLESALE FOOTWEAR SEGMENT:
Total revenue $ 240,044 100.0 % $ 220,139 100.0 %
Cost of sales (exclusive of depreciation and amortization)
154,713 64.5 % 151,654 68.9 %
Gross profit 85,331 35.5 % 68,485 31.1 %
Operating expenses 54,576 22.7 % 43,580 19.8 %
Income from operations $ 30,755 12.8 % $ 24,905 11.3 %
WHOLESALE ACCESSORIES/APPAREL SEGMENT:
Total revenue $ 167,461 100.0 % $ 140,449 100.0 %
Cost of sales (exclusive of depreciation and amortization)
109,521 65.4 % 100,640 71.7 %
Gross profit 57,940 34.6 % 39,809 28.3 %
Operating expenses 36,057 21.5 % 31,480 22.4 %
Change in valuation of contingent payment liability - - % 2,420 1.7 %
Income from operations $ 21,883 13.1 % $ 5,909 4.2 %
DIRECT-TO-CONSUMER SEGMENT:
Total revenue $ 255,409 100.0 % $ 195,502 100.0 %
Cost of sales (exclusive of depreciation and amortization)
91,972 36.0 % 80,679 41.3 %
Gross profit 163,437 64.0 % 114,823 58.7 %
Operating expenses 150,237 58.8 % 159,157 81.4 %
Income / (loss) from operations $ 13,200 5.2 % $ (44,334) (22.7) %
Number of stores (excludes concessions) 390 399
LICENSING SEGMENT:
Licensing income $ 2,951 100.0 % $ 2,910 100.0 %
Gross profit 2,951 100.0 % 2,910 100.0 %
Operating expenses 1,016 34.4 % 553 19.0 %
Income from operations $ 1,935 65.6 % $ 2,357 81.0 %
CORPORATE:
Operating expenses $ 28,454 - % $ 29,095 - %
Loss from operations $ (28,454) - % $ (29,095) - %
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Consolidated
Total revenue for the three months ended June 30, 2026 increased 19.1% to $665,865, compared to $559,000 in the comparable period in the prior year. The increase was due to the acquisition of Kurt Geiger and a strong performance in the legacy branded business, partially offset by a decline in the private label business.
Gross profit for the three months ended June 30, 2026 was $309,659, or 46.5% of total revenue, compared to $226,027, or 40.4% of total revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of total revenue was due to higher average selling prices, a reduction in promotional activity, a smaller negative impact from tariffs, and a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included a charge of $8,251 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the three months ended June 30, 2026 were $270,340, or 40.6% of total revenue, compared to $263,865, or 47.2% of total revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of total revenue was primarily attributable to the one-time recognition of compensation expense of $38,819 in the prior-year period resulting from the reallocation of acquisition-related sellers proceeds from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. The prior-year period also included charges of $8,135 related to acquisition costs and the formation of international joint ventures, $4,741 related to legal costs resulting from litigation settlements, and $522 related to certain severances and termination benefits. The second quarter of 2026 included charges of $3,386 related to legal costs resulting from litigation settlements, $1,486 related to certain severances and termination benefits, and $329 related to acquisition costs and the formation of joint ventures.
During the three months ended June 30, 2026, we recorded no expense related to changes in the fair value of contingent payment liabilities. In the comparable period in the prior year, we recorded expense of $2,420 related to changes in the fair value of contingent payment liabilities.
Income from operations for the three months ended June 30, 2026 was $39,319, or 5.9% of total revenue, compared to a loss from operations of $40,258, or (7.2)% of total revenue in the comparable period in the prior year. The effective tax rate for the three months ended June 30, 2026 was 26.6% compared to (11.2)%, in the comparable period in the prior year. The difference between the Company's effective tax rates was primarily due to non-deductible expenses treated as discrete items related to the acquisition of the Kurt Geiger business.
Net income attributable to Steven Madden, Ltd. for the three months ended June 30, 2026 was $27,727, compared to a net loss of $39,477 in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the three months ended June 30, 2026 was $240,044, or 36.0% of total revenue, compared to $220,139, or 39.4% of total revenue, in the comparable period in the prior year. The increase of 9.0% was primarily driven by strong growth in the branded business, partially offset by a decline in the private label business.
Gross profit for the Wholesale Footwear segment was $85,331, or 35.5% of Wholesale Footwear revenue, for the three months ended June 30, 2026, compared to $68,485, or 31.1%, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to higher average selling prices, a smaller negative impact from tariffs, and a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included $1,443 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the three months ended June 30, 2026 for the Wholesale Footwear segment were $54,576, or 22.7% of Wholesale Footwear revenue, compared to $43,580, or 19.8% of Wholesale Footwear revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue reflects higher incentive compensation and higher distribution and logistics expenses. The second quarter of 2026 also included charges of $1,334 related to legal costs resulting from litigation settlements, $945 related to certain severances and termination benefits, and $46 related to acquisition costs and the formation of international joint ventures. The comparable period in the prior year included $350 of costs related to certain severances and termination benefits and $8 of acquisition costs related to the formation of new international joint ventures.
Income from operations for the three months ended June 30, 2026 for the Wholesale Footwear segment totaled $30,755, or 12.8% of Wholesale Footwear revenue, compared to $24,905, or 11.3% 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 June 30, 2026 was $167,461, or 25.1% of total revenue, compared to $140,449, or 25.1% of total revenue, in the comparable period in the prior year. The increase of 19.2% was primarily driven by strong growth in the branded business, partially offset by a decline in the private label business.
Gross profit for Wholesale Accessories/Apparel segment was $57,940, or 34.6% of Wholesale Accessories/Apparel revenue, for the three months ended June 30, 2026, compared to $39,809, or 28.3% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to higher average selling prices, a smaller negative impact from tariffs, and a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included a charge of $1,814 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the three months ended June 30, 2026 for the Wholesale Accessories/Apparel segment were $36,057, or 21.5% of Wholesale Accessories/Apparel revenue, compared to $31,480, or 22.4% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of Wholesale Accessories/Apparel revenue reflects leveraging of operating expenses on a higher revenue base. The second quarter of 2026 also included charges of $602 related to legal costs resulting from earnout-related litigation and $322 related to certain severances and termination benefits. The comparable period in the prior year included charges of $791 related to legal costs resulting from litigation settlements and $223 related to certain severances and termination benefits.
During the three months ended June 30, 2025, we recorded a charge of $2,420 related to the change in fair value of contingent payment liabilities.
Income from operations for the three months ended June 30, 2026 for the Wholesale Accessories/Apparel segment was $21,883, or 13.1% of Wholesale Accessories/Apparel revenue, compared to $5,909, or 4.2% 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 three months ended June 30, 2026 was $255,409, or 38.4% of total revenue, compared to $195,502, or 35.0% of total revenue, in the comparable period in the prior year period. The increase of 30.6% was primarily driven by the acquisition of Kurt Geiger and a strong Steve Madden performance in both our brick-and-mortar stores and e-commerce businesses. As of June 30, 2026, we operated 382 brick-and-mortar stores, eight e-commerce websites, and 164 concessions in international markets. As of June 30, 2025, we operated 392 brick-and-mortar stores, seven e-commerce websites, and 130 concessions in international markets.
Gross profit for the three months ended June 30, 2026 for the Direct-to-Consumer segment was $163,437, or 64.0% of Direct-to-Consumer revenue, compared to $114,823, or 58.7% of Direct-to-Consumer revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to higher average selling prices, a reduction in promotional activity, and a smaller negative impact from tariffs, partially offset by higher freight costs. The comparable period in the prior year included a charge of $4,994 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the three months ended June 30, 2026 for the Direct-to-Consumer segment were $150,237, or 58.8% of Direct-to-Consumer revenue, compared to $159,157, or 81.4% 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 one-time recognition of compensation expense of $38,819 in the prior-year period resulting from the reallocation of acquisition-related sellers proceeds from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. The prior-year period also included charges of $7,222 related to acquisition costs and the formation of international joint ventures and $1,450 related to legal costs resulting from litigation settlements. The second quarter of 2026 included charges of $922 related to legal costs as a result of litigation settlements, $277 related to acquisition costs and the formation of joint ventures, and $172 related to certain severances and termination benefits.
Income from operations for the three months ended June 30, 2026 for the Direct-to-Consumer segment was $13,200, or 5.2% of Direct-to-Consumer revenue, compared to a loss from operations of $44,334, or (22.7)% 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 June 30, 2026 was $2,951, or 0.4% of total revenue, compared to $2,910, or 0.5% of total revenue, in the comparable period in the prior year. Operating expenses for the three months ended June 30, 2026 were $1,016, compared to $553 in the comparable period of the prior year. The current period included charges of $528 related to legal costs resulting from litigation settlements. Income from operations for the three months ended June 30, 2026 was $1,935, compared to $2,357 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 June 30, 2026 were $28,454, or 4.3% of total revenue, compared to $29,095, or 5.2% of total revenue, in the comparable period in the prior year. The current period included charges of $47 related to certain severances and termination benefits, and $6 related to acquisition costs and the formation of joint ventures.
Results of Operations
The following tables set forth information on operations for the periods indicated:
Six Months Ended June 30,
(in thousands, except for number of stores) 2026 2025
CONSOLIDATED:
Net sales $ 1,312,574 99.5 % $ 1,107,472 99.5 %
Licensing income 6,387 0.5 % 5,062 0.5 %
Total revenue 1,318,961 100.0 % 1,112,534 100.0 %
Cost of sales (exclusive of depreciation and amortization)
651,882 49.4 % 660,240 59.3 %
Gross profit 667,079 50.6 % 452,294 40.7 %
Operating expenses 528,633 40.1 % 441,128 39.7 %
Change in valuation of contingent payment liability 385 - % (2,075) (0.2) %
Income from operations 138,061 10.5 % 13,241 1.2 %
Gain on derivative - - % 9,252 0.8 %
Interest and other expense (4,862) (0.4) % (2,966) (0.3) %
Income before provision for income taxes $ 133,199 10.1 % $ 19,527 1.8 %
Income attributable to Steven Madden, Ltd. $ 99,549 7.5 % $ 946 0.1 %
BY SEGMENT:
WHOLESALE FOOTWEAR SEGMENT:
Total revenue $ 518,910 100.0 % $ 516,284 100.0 %
Cost of sales (exclusive of depreciation and amortization)
297,569 57.3 % 339,108 65.7 %
Gross profit 221,341 42.7 % 177,176 34.3 %
Operating expenses 110,211 21.2 % 89,183 17.3 %
Income from operations $ 111,130 21.4 % $ 87,993 17.0 %
WHOLESALE ACCESSORIES/APPAREL SEGMENT:
Total revenue $ 332,242 100.0 % $ 283,622 100.0 %
Cost of sales (exclusive of depreciation and amortization)
192,132 57.8 % 195,764 69.0 %
Gross profit 140,110 42.2 % 87,858 31.0 %
Operating expenses 73,897 22.2 % 61,612 21.7 %
Change in valuation of contingent payment liability 385 0.1 % (2,075) (0.7) %
Income from operations $ 65,828 19.8 % $ 28,321 10.0 %
DIRECT-TO-CONSUMER SEGMENT:
Total revenue $ 461,422 100.0 % $ 307,566 100.0 %
Cost of sales (exclusive of depreciation and amortization)
162,181 35.1 % 125,368 40.8 %
Gross profit 299,241 64.9 % 182,198 59.2 %
Operating expenses 287,625 62.3 % 232,760 75.7 %
Income / (loss) from operations $ 11,616 2.5 % $ (50,562) (16.4) %
Number of stores 390 399
LICENSING SEGMENT:
Licensing income $ 6,387 100.0 % $ 5,062 100.0 %
Gross profit 6,387 100.0 % 5,062 100.0 %
Operating expenses 1,275 20.0 % 880 17.4 %
Income from operations $ 5,112 80.0 % $ 4,182 82.6 %
CORPORATE:
Operating expenses 55,625 - % $ 56,693 - %
Loss from operations $ (55,625) - % $ (56,693) - %
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Consolidated
Total revenue for the six months ended June 30, 2026 increased 18.6% to $1,318,961, compared to $1,112,534 in the comparable period in the prior year. The increase was driven by the acquisition of Kurt Geiger and a strong performance in the legacy branded business, partially offset by a decline in the private label business.
Gross profit for the six months ended June 30, 2026 was $667,079, or 50.6% of total revenue, compared to $452,294, or 40.7% of total revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of total revenue was due to the refund of IEEPA tariffs, the acquisition of Kurt Geiger, higher average selling prices, a smaller negative impact from tariffs, and lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included a charge of $8,530 related to purchase accounting fair value adjustment of inventory from acquired businesses.
Operating expenses for the six months ended June 30, 2026 were $528,633, or 40.1% of total revenue, compared to $441,128, or 39.7% 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, higher incentive compensation, and higher distribution and logistics expenses. The first half of 2026 also included charges of $4,226 related to legal costs resulting from litigation settlements and earnout-related litigations, $2,649 related to certain severances and termination benefits, and $591 related to acquisition costs and the formation of international joint ventures. The comparable period in the prior year included $38,819 of compensation expense resulting from the reallocation of acquisition-related sellers proceeds from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership, as well as charges of $11,322 related to acquisition costs and the formation of international joint ventures, $5,929 related to legal costs resulting from litigation settlements, and $2,943 related to certain severances and termination benefits.
During the six months ended June 30, 2026, we recorded an expense of $385 related to the change in fair value of contingent payment liabilities. In the comparable period in the prior year, we recorded a benefit of $2,075 related to the change in fair value of contingent payment liabilities.
Income from operations for the six months ended June 30, 2026 was $138,061, or 10.5% of total revenue, compared to $13,241, or 1.2% of total revenue, in the comparable period in the prior year. The effective tax rate for the six months ended June 30, 2026 was 25.2%, compared to 87.0% in the comparable period in the prior year. The difference between the Company's effective tax rates was primarily due to non-deductible expenses treated as discrete items related to the acquisition of the Kurt Geiger business.
Net income attributable to Steven Madden, Ltd. for the six months ended June 30, 2026 was $99,549, compared to $946 in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the six months ended June 30, 2026 was $518,910, or 39.3% of total revenue, compared to $516,284, or 46.4% of total revenue, in the comparable period in the prior year. The increase of 0.5% was primarily driven by the acquisition of Kurt Geiger and a strong performance in the legacy branded business, partially offset by a decline in the private label business.
Gross profit for the six months ended June 30, 2026 for the Wholesale Footwear segment was $221,341, or 42.7% of Wholesale Footwear revenue, compared to $177,176, or 34.3% of Wholesale Footwear revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to the refund of IEEPA tariffs, higher average selling prices, a smaller negative impact from tariffs, a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included $1,443 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the six months ended June 30, 2026 for the Wholesale Footwear segment were $110,211, or 21.2% of Wholesale Footwear revenue, compared to $89,183, or 17.3% of Wholesale Footwear revenue, in the comparable period in the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue was due to higher incentive compensation and higher distribution and logistics expenses. The first half of 2026 also included charges of $1,545 related to certain severances and termination benefits, $1,334 related to legal costs resulting from litigation settlements, and $81 related to acquisition costs and the formation of international joint ventures. The comparable period in the prior year included
costs of $946 related to certain severances and termination benefits, and $80 of acquisition costs related to the formation of new international joint ventures.
Income from operations for the six months ended June 30, 2026 for the Wholesale Footwear segment totaled $111,130, or 21.4% of Wholesale Footwear revenue, compared to $87,993, or 17.0% 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 six months ended June 30, 2026 was $332,242, or 25.2% of total revenue, compared to $283,622, or 25.5% of total revenue, in the comparable period in the prior year. The increase of 17.1% was primarily driven by the acquisition of Kurt Geiger and a strong performance in the legacy branded business, partially offset by a decline in the private label business.
Gross profit for the six months ended June 30, 2026 for the Wholesale Accessories/Apparel segment was $140,110, or 42.2% of Wholesale Accessories/Apparel revenue, compared to $87,858, or 31.0% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to the refund of IEEPA tariffs, higher average selling prices, the acquisition of Kurt Geiger, a smaller negative impact from tariffs, and a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included a charge of $2,093 related to the purchase accounting fair value adjustment of inventory from acquired businesses.
Operating expenses for the six months ended June 30, 2026 for the Wholesale Accessories/Apparel segment were $73,897, or 22.2% of Wholesale Accessories/Apparel revenue, compared to $61,612, or 21.7% 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 due to the acquisition of Kurt Geiger, higher incentive compensation, and higher distribution and logistics expenses. The first half of 2026 also included charges of $910 related to legal costs resulting from earnout-related litigation and $669 related to certain severances and termination benefits. The comparable period in the prior year included charges of $1,979 related to legal costs resulting from litigation settlements and $327 related to certain severances and termination benefits.
During the six months ended June 30, 2026, we recorded a charge of $385 related to the change in fair value of contingent payment liabilities. During the comparable period in the prior year, we recorded a benefit of $2,075 related to the change in fair value of contingent payment liabilities.
Income from operations for the six months ended June 30, 2026 for the Wholesale Accessories/Apparel segment was $65,828, or 19.8% of Wholesale Accessories/Apparel revenue, compared to $28,321, or 10.0% 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 six months ended June 30, 2026 was $461,422, or 35.0% of total revenue, compared to $307,566, or 27.6% of total revenue, in the comparable period in the prior year. The increase of 50.0% was driven by the acquisition of Kurt Geiger and a strong Steve Madden performance in both our brick-and-mortar and e-commerce businesses.
Gross profit for the six months ended June 30, 2026 for the Direct-to-Consumer segment was $299,241, or 64.9% of Direct-to-Consumer revenue, compared to $182,198, or 59.2% of Direct-to-Consumer revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was due to the refund of IEEPA tariffs, higher average selling prices, and a reduction in promotional activity, partially offset by higher freight costs. The comparable period in the prior year included a charge of $4,994 related to the purchase accounting fair value adjustment of inventory from the acquisition of the Kurt Geiger business.
Operating expenses for the six months ended June 30, 2026 for the Direct-to-Consumer segment were $287,625, or 62.3% of Direct-to-Consumer revenue, compared to $232,760, or 75.7% 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 one-time recognition of compensation expense of $38,819 in the prior-year period resulting from the reallocation of acquisition-related sellers proceeds from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. The prior-year period also included charges of $7,692 related to acquisition costs and the formation of international joint ventures, $1,450 related to legal costs resulting from litigation settlements, and $915 related to certain severances and termination benefits. This was partially offset by higher incentive compensation and higher distribution and logistics expenses
in the first half of 2026. The 2026 period also included charges of $1,454 related to legal costs resulting from litigation settlements, $504 related to acquisition costs and the formation of international joint ventures, and $229 related to certain severances and termination benefits.
Income from operations for the six months ended June 30, 2026 for the Direct-to-Consumer segment was $11,616, or 2.5% of Direct-to-Consumer revenue, compared to a loss from operations of $50,562, or (16.4)% of Direct-to-Consumer revenue, in the comparable period in the prior year.
Licensing Segment
Royalty income from the Licensing segment for the six months ended June 30, 2026 was $6,387, or 0.5% of total revenue, compared to $5,062, or 0.5% of total revenue, in the comparable period in the prior year. Operating expenses for the six months ended June 30, 2026 were $1,275, compared to $880 in the comparable period in the prior year. The current period included charges of $528 related to legal costs resulting from litigation settlements. Income from operations for the six months ended June 30, 2026 was $5,112, compared to $4,182 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 six months ended June 30, 2026 were $55,625 or 4.2% of total revenue, compared to $56,693 or 5.1% of total revenue, in the comparable period in the prior year. The current period included charges of $206 related to certain severances and termination benefits and $6 related to acquisition costs and the formation of joint ventures. The comparable period in the prior year included charges of $2,614 related to acquisition costs and $686 related to certain severances and termination benefits.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, cash, cash equivalents and borrowing capacity under our Credit Agreement. Cash and cash equivalents totaled $94,739 and $112,423 at June 30, 2026 and December 31, 2025, respectively, and of the total cash and cash equivalents as of June 30, 2026, $78,618, or approximately 83%, was held at our foreign subsidiaries, and of the total cash and cash equivalents as of December 31, 2025, $93,859, or approximately 83%, was held at our foreign subsidiaries.
As of June 30, 2026, we had working capital of $441,931, cash and cash equivalents of $94,739, and $3,834 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 June 30, 2026, the total outstanding borrowings under our Credit Agreement in the form of cash borrowings and standby letters of credit were $130,000 and $3,330, respectively.
We believe that based on our current financial position and available cash and cash equivalents, 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.
IEEPA Tariff Refund
During the second quarter of 2026, the Company received approximately $92,097 from the U.S. Department of the Treasury related to its IEEPA tariff refund claim, including approximately $3,073 of statutory interest. As of June 30, 2026, a small portion of the Company's original tariff refund claim remains outstanding and is expected to be processed as part of CBP's Phase 2 refund process.
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 $149,263 for the six months ended June 30, 2026, compared to $47,635 in the same period of the prior year. The increase in cash provided by operating activities was primarily driven by higher net income and favorable changes in working capital, and the collection of substantially all of the Company's IEEPA tariff refund during the second quarter of 2026.
Investing Activities
Cash used in investing activities was $15,739 for the six months ended June 30, 2026, which primarily consisted of capital expenditures for leasehold improvements, new stores, and systems enhancements.
Financing Activities
Cash used in financing activities was $151,502 for the six months ended June 30, 2026, which primarily consisted of transaction-related net repayments of $110,000, dividends paid of $30,641, and net settlements of stock awards of $8,352.
Contractual and Other Obligations
Firm Commitments
Our contractual obligations as of June 30, 2026 were as follows:
Obligations due by period
Contractual Obligations Total Remainder of 2026 2027-2028 2029-2030 2031 and after
Operating lease obligations(1)
$ 295,525 $ 37,817 $ 115,283 $ 65,440 $ 76,985
Purchase obligations(2)
290,267 290,267 - - -
Future minimum royalty and advertising commitment obligations(3)
32,568 2,568 12,000 12,000 6,000
Employment agreement obligations(4)
48,268 5,392 19,442 15,688 7,746
Total obligations $ 666,628 $ 336,044 $ 146,725 $ 93,128 $ 90,731
(1) Refer to Note 5 - 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 commitments represent our obligations in connection with our license agreement. Refer to Note 12 - 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 $504 outstanding as of June 30, 2026 related to the purchase of inventory and certain lease obligations. These letters of credit expire at various dates through 2036.
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 Condensed Consolidated Financial Statements. Refer to Note 12 - Commitments, Contingencies, and Other to the Condensed Consolidated Financial Statements included in this Quarterly Report for further information.
Dividends
On July 29, 2026, our Board of Directors approved a quarterly cash dividend. The quarterly dividend of $0.21 per share is payable on September 24, 2026 to stockholders of record as of the close of business on September 11, 2026.
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, 2025 filed with the Securities and Exchange Commission on March 2, 2026.
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