Steve Madden (SHOO) has reported 2.06 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $43.77 million, or $0.74 a share in the quarter, compared with $42.88 million, or $0.70 a share for the same period last year. Revenue during the quarter went down marginally by 1.23 percent to $408.38 million from $413.46 million in the previous year period. Gross margin for the quarter expanded 185 basis points over the previous year period to 37.83 percent. Total expenses were 84.39 percent of quarterly revenues, up from 83.97 percent for the same period last year. That has resulted in a contraction of 42 basis points in operating margin to 15.61 percent.
Operating income for the quarter was $63.77 million, compared with $66.28 million in the previous year period.
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “We were pleased with our third quarter results, which exceeded our expectations on both the top and bottom lines. Our core Steve Madden Women’s footwear business achieved outstanding growth during the quarter, as did our Dolce Vita line. In addition, we delivered strong gross margin expansion, as our on-trend merchandise assortment and disciplined inventory management resulted in higher initial mark-ups and reduced close-outs and markdown allowances. While the overall retail environment continues to be challenging and our wholesale partners remain cautious, our third quarter results enable us to narrow our guidance range for fiscal 2016 diluted EPS to the upper half of our previous range.”
For fiscal year 2016, the company expects diluted earnings per share to be in the range of $1.98 to $2.03.
Operating cash flow improves significantly
Steven Madden has generated cash of $73.47 million from operating activities during the nine month period, up 46.51 percent or $23.32 million, when compared with the last year period. The company has spent $9.92 million cash to meet investing activities during the nine month period as against cash outgo of $17.68 million in the last year period.
The company has spent $73.24 million cash to carry out financing activities during the nine month period as against cash outgo of $75.26 million in the last year period.
Cash and cash equivalents stood at $62.72 million as on Sep. 30, 2016, up 62.27 percent or $24.07 million from $38.65 million on Sep. 30, 2015.
Working capital increases sharply Steven Madden has recorded an increase in the working capital over the last year. It
stood at $412.92 million as at Sep. 30, 2016, up 54.58 percent or $145.79 million from $267.13 million on Sep. 30, 2015. Current ratio was at 3.09 as on Sep. 30, 2016, up from 2.11 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 38 days for the quarter from 56 days for the last year period. Days sales outstanding were almost stable at 55 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 20 days for the quarter compared with 41 days for the previous year period. At the same time, days payable outstanding went down to 38 days for the quarter from 41 for the same period last year.
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