Steven Madden Ltd.

11/06/2026 | Press release | Distributed by Public on 11/06/2026 12:15

Quarterly Report for Quarter Ending September 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 nine months ended September 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, 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 of raw materials or end 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 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;
•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 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 actions of our licensees or the loss of a significant licensee and 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
During the third quarter of 2026, shifting macroeconomic conditions continued to influence our operating environment, reinforcing the importance of flexibility in our sourcing, supply chain, and go-to-market strategies.
Global trade policy developments remained a key consideration during the third 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 advance alternative trade measures. During the quarter, temporary tariffs imposed under Section 122 of the Trade Act of 1974 expired, and new tariffs under Section 301 of the Trade Act of 1974 took effect on imports from a broad range of trading partners, subject to certain exemptions. Negotiations following the July 2026 review of the United States-Mexico-Canada Agreement ("USMCA"), along with developments involving other international trade arrangements, added to the uncertainty surrounding global trade. The timing, scope, and magnitude of future tariff-related impacts remain dependent on changes in trade policy, ongoing negotiations, judicial proceedings, and regulatory actions. We continue to navigate these conditions through diversified sourcing, selective pricing adjustments, and cost management initiatives.
Consumer spending patterns continued to reflect the effects of interest rates, persistent inflationary pressures, and broader economic uncertainty. In September 2026, the U.S. Federal Reserve increased its benchmark interest rate in response to continued inflation concerns. Demand varied across channels and regions, with consumers remaining sensitive to pricing and discretionary purchases. Fluctuations in foreign currency exchange rates and uncertainty regarding global economic growth also continued to shape the operating environment and consumer sentiment.
Geopolitical uncertainty remained a factor in global markets throughout the quarter. Ongoing conflicts in Ukraine and the Middle East, including renewed hostilities involving Iran and disruptions to regional energy flows, continued alongside broader strategic tensions between the United States and China. These developments have contributed to global business conditions and may continue to affect supply chains, trade flows, energy and other input costs, and freight markets.
Consumer expectations for seamless engagement across digital and physical channels continued to shape the retail landscape. Our priorities remain centered on enhancing the consumer experience and strengthening our omnichannel capabilities through ongoing investments in e-commerce, data analytics, and digital engagement. Within the wholesale channel, continued economic and trade-related uncertainty reinforced customers' focus on disciplined inventory management and cautious purchasing decisions.
Despite the evolving macroeconomic environment, 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 November 4, 2026, our Board of Directors declared a quarterly cash dividend of $0.21 per share payable on December 24, 2026 to stockholders of record as of the close of business on December 11, 2026.
Key Highlights
Total revenue for the quarter ended September 30, 2026 increased 15.7% to $772,606, compared to $667,875 in the same period of last year, driven by growth in both wholesale and direct-to-consumer businesses. Net income attributable to Steven Madden, Ltd. was $52,415 in the third quarter of 2026, compared to $20,528 in the same period of last year. Our effective tax rate for the third quarter of 2026 was 26.2%, compared to 17.4% in the same period of last year. Diluted income per share was $0.72 per share on 72,577 diluted weighted average shares outstanding, compared to $0.29 per share on 71,157 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, 2026 was 3.8 times, compared to 4.0 times at September 30, 2025. Excluding the Kurt Geiger business, our inventory turnover for the quarter ended September 30, 2026 was 5.0 times, compared to 4.5 times for the quarter ended September 30, 2025. Our total Company accounts receivable average collection days decreased to 56 days in the third quarter of 2026, compared to 58 days in the third quarter of 2025. As of September 30, 2026, we had $71,334 in cash and cash equivalents, and total stockholders' equity of $1,016,124. Working capital was $484,165 as of September 30, 2026, compared to $520,512 as of September 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 September 30,
(in thousands, except for number of stores) 2026 2025
CONSOLIDATED:
Net sales $ 767,892 99.4 % $ 664,200 99.4 %
Licensing income 4,714 0.6 % 3,675 0.6 %
Total revenue 772,606 100.0 % 667,875 100.0 %
Cost of sales (exclusive of depreciation and amortization)
428,354 55.4 % 390,500 58.5 %
Gross profit 344,252 44.6 % 277,375 41.5 %
Operating expenses 270,025 34.9 % 246,017 36.8 %
Change in valuation of contingent payment liability 1,021 0.1 % - - %
Income from operations 73,206 9.5 % 31,358 4.7 %
Interest and other expense (1,826) (0.2 %) (4,947) (0.7 %)
Income before provision for income taxes $ 71,380 9.2 % $ 26,411 4.0 %
Net income attributable to Steven Madden, Ltd. $ 52,415 6.8 % $ 20,528 3.1 %
BY SEGMENT:
WHOLESALE FOOTWEAR SEGMENT:
Total revenue $ 322,632 100.0 % $ 266,543 100.0 %
Cost of sales (exclusive of depreciation and amortization)
202,666 62.8 % 174,859 65.6 %
Gross profit 119,966 37.2 % 91,684 34.4 %
Operating expenses 57,734 17.9 % 51,570 19.3 %
Change in valuation of contingent payment liability 350 0.1 % - - %
Income from operations $ 61,882 19.2 % $ 40,114 15.0 %
WHOLESALE ACCESSORIES/APPAREL SEGMENT:
Total revenue $ 206,105 100.0 % $ 176,152 100.0 %
Cost of sales (exclusive of depreciation and amortization)
131,680 63.9 % 123,186 69.9 %
Gross profit 74,425 36.1 % 52,966 30.1 %
Operating expenses 40,937 19.9 % 37,363 21.2 %
Change in valuation of contingent payment liability (554) (0.3 %) - - %
Income from operations $ 34,042 16.5 % $ 15,603 8.9 %
DIRECT-TO-CONSUMER SEGMENT:
Total revenue $ 239,155 100.0 % $ 221,505 100.0 %
Cost of sales (exclusive of depreciation and amortization)
94,008 39.3 % 92,455 41.7 %
Gross profit 145,147 60.7 % 129,050 58.3 %
Operating expenses 142,891 59.7 % 133,490 60.3 %
Change in valuation of contingent payment liability 1,225 0.5 % - - %
Income / (loss) from operations $ 1,031 0.4 % $ (4,440) (2.0 %)
Number of stores (excludes concessions) 389 404
LICENSING SEGMENT:
Licensing income $ 4,714 100.0 % $ 3,675 100.0 %
Gross profit 4,714 100.0 % 3,675 100.0 %
Operating expenses 642 13.6 % 217 5.9 %
Income from operations $ 4,072 86.4 % $ 3,458 94.1 %
CORPORATE:
Operating expenses $ 27,821 - % $ 23,377 - %
Loss from operations $ (27,821) - % $ (23,377) - %
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Consolidated
Total revenue for the three months ended September 30, 2026 increased 15.7% to $772,606, compared to $667,875 in the comparable period in the prior year. The increase was driven by growth in both the wholesale and direct-to-consumer businesses.
Gross profit for the three months ended September 30, 2026 was $344,252, or 44.6% of total revenue, compared to $277,375, or 41.5% of total revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of total revenue was primarily due to the strength of our underlying operating performance and a smaller negative impact from tariffs, partially offset by higher freight costs. The comparable period in the prior year included $12,309 related to purchase accounting fair value adjustments of inventory from the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2026 were $270,025, or 34.9% of total revenue, compared to $246,017, or 36.8% of total revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of total revenue reflects leveraging of operating expenses on a higher revenue base. The third quarter of 2026 included charges of $3,933 in connection with acquisition-related costs attributable to Kurt Geiger, and $790 related to legal costs as a result of litigation settlements. The comparable period in the prior year 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.
During the three months ended September 30, 2026, we recorded an expense of $1,021 related to the change in the fair value of contingent payment liabilities.
Income from operations for the three months ended September 30, 2026 was $73,206, or 9.5% of total revenue, compared to $31,358, or 4.7% of total revenue, in the comparable period in the prior year. The effective tax rate for the three months ended September 30, 2026 was 26.2% compared to 17.4% in the comparable period in the prior year. The difference between the Company's effective tax rates was primarily due to the prior year benefiting from a reduction in non-deductible expenses related to the Kurt Geiger acquisition and the jurisdictional mix of pre-tax earnings.
Net income attributable to Steven Madden, Ltd. for the three months ended September 30, 2026 was $52,415, compared to $20,528 in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the three months ended September 30, 2026 was $322,632, or 41.8% of total revenue, compared to $266,543, or 39.9% of total revenue, in the comparable period in the prior year. The increase of 21.0% was primarily driven by strong growth in the branded business.
Gross profit for the Wholesale Footwear segment was $119,966, or 37.2% of Wholesale Footwear revenue, for the three months ended September 30, 2026, compared to $91,684, or 34.4%, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was driven by the strength of our underlying operating performance and a smaller negative impact from tariffs, partially offset by higher freight costs. The comparable period in the prior year included $1,737 related to the purchase accounting fair value adjustment of inventory from the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2026 for the Wholesale Footwear segment were $57,734, or 17.9% of Wholesale Footwear revenue, compared to $51,570, or 19.3% of Wholesale Footwear revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of Wholesale Footwear revenue reflects leveraging of operating expenses on a higher revenue base. The third quarter of 2026 included a charge of $151 in connection with acquisition-related costs attributable to Kurt Geiger. The comparable period in the prior year included $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.
During the three months ended September 30, 2026, we recorded an expense of $350 related to the change in the fair value of contingent payment liabilities.
Income from operations for the three months ended September 30, 2026 for the Wholesale Footwear segment totaled $61,882, or 19.2% of Wholesale Footwear revenue, compared to $40,114, or 15.0% 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 three months ended September 30, 2026 was $206,105, or 26.7% of total revenue, compared to $176,152, or 26.4% of total revenue, in the comparable period in the prior year. The increase of 17.0% was primarily driven by strong growth in the branded business.
Gross profit for the Wholesale Accessories/Apparel segment was $74,425, or 36.1% of Wholesale Accessories/Apparel revenue, for the three months ended September 30, 2026, compared to $52,966, or 30.1% of Wholesale Accessories/Apparel revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was driven by the strength of our underlying operating performance and a smaller negative impact from tariffs, partially offset by higher freight costs. The comparable period in the prior year included a charge of $2,506 related to the purchase accounting fair value adjustment of inventory from the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2026 for the Wholesale Accessories/Apparel segment were $40,937, or 19.9% of Wholesale Accessories/Apparel revenue, compared to $37,363, or 21.2% 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 third quarter of 2026 included charges of $790 related to legal costs as a result of litigation settlements and earnout-related litigation and $76 in connection with acquisition-related costs attributable to Kurt Geiger. The comparable period in the prior year 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.
During the three months ended September 30, 2026, we recorded a net benefit of $554 related to the change in fair value of contingent payment liabilities.
Income from operations for the three months ended September 30, 2026 for the Wholesale Accessories/Apparel segment was $34,042, or 16.5% of Wholesale Accessories/Apparel revenue, compared to $15,603, or 8.9% 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, 2026 was $239,155, or 31.0% of total revenue, compared to $221,505, or 33.2% of total revenue, in the comparable period in the prior year. The increase of 8.0% was driven by growth in both our brick-and-mortar and e-commerce businesses. As of September 30, 2026, we operated 381 brick-and-mortar stores, eight e-commerce websites, and 190 concessions in international markets. As of September 30, 2025, we operated 397 brick-and-mortar stores, seven e-commerce websites, and 133 concessions in international markets.
Gross profit for the three months ended September 30, 2026 for the Direct-to-Consumer segment was $145,147, or 60.7% of Direct-to-Consumer revenue, compared to $129,050, or 58.3% of Direct-to-Consumer revenue, in the comparable period in the prior year. The increase in gross profit as a percentage of revenue was primarily due to a charge of $8,066 in the prior-year period related to the purchase accounting fair value adjustment of inventory from the Kurt Geiger acquisition.
Operating expenses for the three months ended September 30, 2026 for the Direct-to-Consumer segment were $142,891, or 59.7% of Direct-to-Consumer revenue, compared to $133,490, or 60.3% of Direct-to-Consumer revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of revenue reflects leveraging of operating expenses on a higher revenue base. The third quarter of 2026 included charges of $3,706 in connection with acquisition-related costs attributable to Kurt Geiger. The prior-year period included charges of $671 related to acquisition costs and the formation of joint ventures, and $469 related to certain severances and termination benefits.
During the three months ended September 30, 2026, we recorded an expense of $1,225 related to the change in fair value of contingent payment liabilities.
Income from operations for the three months ended September 30, 2026 for the Direct-to-Consumer segment was $1,031, or 0.4% of Direct-to-Consumer revenue, compared to a loss from operations of $4,440, or (2.0%) 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, 2026 was $4,714, or 0.6% of total revenue, compared to $3,675, or 0.6% of total revenue, in the comparable period in the prior year. Operating expenses for the three months ended September 30, 2026 were $642, compared to $217 in the comparable period of the prior year. Income
from operations for the three months ended September 30, 2026 was $4,072, compared to $3,458 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 relate 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, 2026 were $27,821, or 3.6% of total revenue, compared to $23,377, or 3.5% 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) 2026 2025
CONSOLIDATED:
Net sales $ 2,080,466 99.5 % $ 1,771,672 99.5 %
Licensing income 11,101 0.5 % 8,737 0.5 %
Total revenue 2,091,567 100.0 % 1,780,409 100.0 %
Cost of sales (exclusive of depreciation and amortization)
1,080,236 51.6 % 1,050,740 59.0 %
Gross profit 1,011,331 48.4 % 729,669 41.0 %
Operating expenses 798,658 38.2 % 687,145 38.6 %
Change in valuation of contingent payment liability 1,406 0.1 % (2,075) (0.1 %)
Income from operations 211,267 10.1 % 44,599 2.5 %
Gain on derivative - - % 9,252 0.5 %
Interest and other expense (6,688) (0.3 %) (7,913) (0.4 %)
Income before provision for income taxes $ 204,579 9.8 % $ 45,938 2.6 %
Net income attributable to Steven Madden, Ltd. $ 151,964 7.3 % $ 21,474 1.2 %
BY SEGMENT:
WHOLESALE FOOTWEAR SEGMENT:
Total revenue $ 841,542 100.0 % $ 782,827 100.0 %
Cost of sales (exclusive of depreciation and amortization)
500,235 59.4 % 513,967 65.7 %
Gross profit 341,307 40.6 % 268,860 34.3 %
Operating expenses 167,945 20.0 % 140,753 18.0 %
Change in valuation of contingent payment liability 350 - % - - %
Income from operations $ 173,012 20.6 % $ 128,107 16.4 %
WHOLESALE ACCESSORIES/APPAREL SEGMENT:
Total revenue $ 538,347 100.0 % $ 459,774 100.0 %
Cost of sales (exclusive of depreciation and amortization)
323,812 60.1 % 318,950 69.4 %
Gross profit 214,535 39.9 % 140,824 30.6 %
Operating expenses 114,834 21.3 % 98,975 21.5 %
Change in valuation of contingent payment liability (169) - % (2,075) (0.5 %)
Income from operations $ 99,870 18.6 % $ 43,924 9.6 %
DIRECT-TO-CONSUMER SEGMENT:
Total revenue $ 700,577 100.0 % $ 529,071 100.0 %
Cost of sales (exclusive of depreciation and amortization)
256,189 36.6 % 217,823 41.2 %
Gross profit 444,388 63.4 % 311,248 58.8 %
Operating expenses 430,516 61.5 % 366,250 69.2 %
Change in valuation of contingent payment liability 1,225 0.2 % - - %
Income / (loss) from operations $ 12,647 1.8 % $ (55,002) (10.4 %)
Number of stores 389 404
LICENSING SEGMENT:
Licensing income $ 11,101 100.0 % $ 8,737 100.0 %
Gross profit 11,101 100.0 % 8,737 100.0 %
Operating expenses 1,917 17.3 % 1,097 12.6 %
Income from operations $ 9,184 82.7 % $ 7,640 87.4 %
CORPORATE:
Operating expenses 83,446 - % $ 80,070 - %
Loss from operations $ (83,446) - % $ (80,070) - %
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Consolidated
Total revenue for the nine months ended September 30, 2026 increased 17.5% to $2,091,567, compared to $1,780,409 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 nine months ended September 30, 2026 was $1,011,331, or 48.4% of total revenue, compared to $729,669, or 41.0% 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, higher average selling prices, a smaller negative impact from tariffs, a higher penetration of the Direct-to-Consumer segment, 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 $20,840 related to purchase accounting fair value adjustment of inventory primarily attributable to the Kurt Geiger acquisition.
Operating expenses for the nine months ended September 30, 2026 were $798,658, or 38.2% of total revenue, compared to $687,145, or 38.6% of total revenue, in the comparable period in the prior year. The decrease in operating expenses as a percentage of total revenue was primarily due to the prior year period including $38,819 related to a one-time 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 $12,017 related to acquisition costs and the formation of joint ventures, $6,732 related to legal costs as a result of litigation settlements, and $4,030 related to certain severances and termination benefits. The current year period included a partial offset due to higher incentive compensation, distribution and logistics expenses, and a higher penetration of the Direct-to-Consumer segment. The current-year period also included charges of $5,017 related to legal costs resulting from litigation settlements and earnout-related litigation, $4,524 in connection with acquisition-related costs and the formation of international joint ventures, and $2,649 related to certain severances and termination benefits.
During the nine months ended September 30, 2026, we recorded an expense of $1,406 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 nine months ended September 30, 2026 was $211,267, or 10.1% of total revenue, compared to $44,599, or 2.5% of total revenue, in the comparable period in the prior year. The effective tax rate for the nine months ended September 30, 2026 was 25.6%, compared to 47.0% 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 Kurt Geiger acquisition in the prior year.
Net income attributable to Steven Madden, Ltd. for the nine months ended September 30, 2026 was $151,964, compared to $21,474 in the comparable period in the prior year.
Wholesale Footwear Segment
Revenue from the Wholesale Footwear segment for the nine months ended September 30, 2026 was $841,542, or 40.2% of total revenue, compared to $782,827, or 44.0% of total revenue, in the comparable period in the prior year. The increase of 7.5% 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 nine months ended September 30, 2026 for the Wholesale Footwear segment was $341,307, or 40.6% of Wholesale Footwear revenue, compared to $268,860, 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, and a lower penetration of the private label business, partially offset by higher freight costs. The comparable period in the prior year included $3,180 related to the purchase accounting fair value adjustment of inventory from the Kurt Geiger acquisition.
Operating expenses for the nine months ended September 30, 2026 for the Wholesale Footwear segment were $167,945, or 20.0% of Wholesale Footwear revenue, compared to $140,753, or 18.0% 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 current-year period also included charges of $1,545 related to certain severances and termination benefits, $1,334 related to legal costs resulting from litigation
settlements, and $232 in connection with acquisition-related costs and the formation of international joint ventures. The comparable period in the prior year 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.
During the nine months ended September 30, 2026, we recorded an expense of $350 related to the change in fair value of contingent payment liabilities.
Income from operations for the nine months ended September 30, 2026 for the Wholesale Footwear segment totaled $173,012, or 20.6% of Wholesale Footwear revenue, compared to $128,107, or 16.4% 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, 2026 was $538,347, or 25.7% of total revenue, compared to $459,774, or 25.8% 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 nine months ended September 30, 2026 for the Wholesale Accessories/Apparel segment was $214,535, or 39.9% of Wholesale Accessories/Apparel revenue, compared to $140,824, or 30.6% 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 $4,599 related to the purchase accounting fair value adjustment of inventory primarily attributable to the acquisition of Kurt Geiger.
Operating expenses for the nine months ended September 30, 2026 for the Wholesale Accessories/Apparel segment were $114,834, or 21.3% of Wholesale Accessories/Apparel revenue, compared to $98,975, or 21.5% 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, partially offset by the acquisition of Kurt Geiger, higher incentive compensation, and higher distribution and logistics expenses. The current-year period included charges of $1,701 related to legal costs resulting from earnout-related litigation, $669 related to certain severances and termination benefits, and $76 in connection with acquisition-related costs. The comparable period in the prior year 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.
During the nine months ended September 30, 2026, we recorded a net benefit of $169 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 nine months ended September 30, 2026 for the Wholesale Accessories/Apparel segment was $99,870, or 18.6% of Wholesale Accessories/Apparel revenue, compared to $43,924, or 9.6% 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 nine months ended September 30, 2026 was $700,577, or 33.5% of total revenue, compared to $529,071, or 29.7% of total revenue, in the comparable period in the prior year. The increase of 32.4% 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 nine months ended September 30, 2026 for the Direct-to-Consumer segment was $444,388, or 63.4% of Direct-to-Consumer revenue, compared to $311,248, or 58.8% 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 $13,060 related to the purchase accounting fair value adjustment of inventory from the Kurt Geiger acquisition.
Operating expenses for the nine months ended September 30, 2026 for the Direct-to-Consumer segment were $430,516, or 61.5% of Direct-to-Consumer revenue, compared to $366,250, or 69.2% 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 $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. This was partially offset by higher incentive compensation, marketing, and higher distribution and logistics expenses in the current-year period. The current-year period also included charges of $4,210 in connection with acquisition-related costs and the formation of international joint ventures, $1,454 related to legal costs resulting from litigation settlements, and $229 related to certain severances and termination benefits.
During the nine months ended September 30, 2026, we recorded an expense of $1,225 related to the change in fair value of contingent payment liabilities.
Income from operations for the nine months ended September 30, 2026 for the Direct-to-Consumer segment was $12,647, or 1.8% of Direct-to-Consumer revenue, compared to a loss from operations of $55,002, or (10.4%) 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, 2026 was $11,101, or 0.5% of total revenue, compared to $8,737, or 0.5% of total revenue, in the comparable period in the prior year. Operating expenses for the nine months ended September 30, 2026 were $1,917, compared to $1,097 in the comparable period in the prior year. The current-year period included charges of $528 related to legal costs resulting from litigation settlements. Income from operations for the nine months ended September 30, 2026 was $9,184, compared to $7,640 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 relate 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, 2026 were $83,446 or 4.0% of total revenue, compared to $80,070 or 4.5% of total revenue, in the comparable period in the prior year. The current-year period included charges of $206 related to certain severances and termination benefits, and $6 related to acquisition costs and the formation of joint ventures.
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 $71,334 and $112,423 at September 30, 2026 and December 31, 2025, respectively, and of the total cash and cash equivalents as of September 30, 2026, $68,735, or approximately 96%, 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 September 30, 2026, we had working capital of $484,165, cash and cash equivalents of $71,334, and $3,834 in letters of credit outstanding.
Acquisition of Spain Distribution Business
In June 2026, the Company, through its wholly owned subsidiary, KG Steve Madden, SL, acquired the Kurt Geiger and Steve Madden distribution business in Spain, Portugal, and Andorra from VIA Global Fashion House, SL (collectively, the "Spain Distribution Business"). The acquired Spain Distribution Business distributes the Company's products primarily through the direct-to-consumer channel. The purchase price for the acquired Spain Distribution Business was $1,328.
Acquisition of Kurt Geiger
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 purchase price of $403,348, pursuant to the terms of the sale and purchase deed (the "Kurt Geiger acquisition"). We funded the cash consideration and the payment of transaction-related expenses through borrowings under the Credit Agreement and cash on hand. MATL is the ultimate parent company of the Kurt Geiger business ("Kurt Geiger"), which operates primarily in the UK, U.S., and Europe. Kurt Geiger designs and sells footwear and accessories under its own brands - including Kurt Geiger London, KG Kurt Geiger, and Carvela - through brick-and-mortar retail stores, e-commerce, and wholesale partnerships, and operates third party concessions in luxury and premium department stores primarily in the UK.
Credit Agreement
On May 6, 2025, in connection with the Kurt Geiger acquisition, 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, 2026, the total outstanding borrowings under our Credit Agreement in the form of cash borrowings and standby letters of credit were $125,000 and $3,330, respectively.
Subsequent to quarter-end and prior to issuance of our Form 10-Q on November 6, 2026, the Company made net repayments of $25,000 under its revolving credit facility. These repayments represented voluntary prepayments funded with available cash on hand. Following these repayments, no borrowings were outstanding under the revolving credit facility.
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 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 September 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 $152,735 for the nine months ended September 30, 2026, compared to $71,072 in the same period of the prior year. The increase in cash provided by operating activities was primarily driven by higher net income and the collection of substantially all of the Company's IEEPA tariff refund.
Investing Activities
Cash used in investing activities was $22,445 for the nine months ended September 30, 2026, which primarily consisted of capital expenditures for leasehold improvements, new stores, and systems enhancements.
Financing Activities
Cash used in financing activities was $171,739 for the nine months ended September 30, 2026, which primarily consisted of net repayments of debt of $115,000, dividends paid of $46,004, and net settlements of stock awards of $8,695.
Contractual and Other Obligations
Firm Commitments
Our contractual obligations as of September 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)
$ 296,398 $ 19,183 $ 120,148 $ 69,480 $ 87,587
Purchase obligations(2)
349,231 268,863 80,368 - -
Future minimum royalty and advertising commitment obligations(3)
30,960 960 12,000 12,000 6,000
Employment agreement obligations(4)
45,572 2,696 19,442 15,688 7,746
Long-term debt(5)
125,000 - - 125,000 -
Total obligations $ 847,161 $ 291,702 $ 231,958 $ 222,168 $ 101,333
(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, 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.
(5) Refer to Note 14 - Credit Agreement to the Condensed Consolidated Financial Statements included in this Quarterly Report for further information.
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 September 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 November 4, 2026, our Board of Directors declared a quarterly cash dividend of $0.21 per share payable on December 24, 2026 to stockholders of record as of the close of business on December 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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