Steven Madden Ltd. CEO Edward Rosenfeld had great news about the shoe firm’s prospects, and investors cheered.
Shares of Madden spiked 13.6 percent to close the trading day Wednesday at $37.32 following Rosenfeld’s remarks in a conference call after the company posted third quarter earnings results.
“During the period in April and May, when new tariffs on Chinese imports reached 145 percent, wholesale customers cut back meaningfully on orders for the third quarter, and we shifted large amounts of production out of China midstream, which led to shipment delays,” Rosenfeld said. “These factors, together with the negative impact to gross margin from the significant increase in our landed costs, resulted in substantial pressure on both revenue and earnings in Q3.” He also noted that the value side of the wholesale channel were the ones that “pulled back most significantly.”
Rosenfeld also spoke about the China tariff reduction and its impact on sourcing. “It’s a welcome development to see the reduction in the tariff on China. The way that this tariff regime looks right now, the math would tell us we would move quite a bit back to China,” he said, explaining that there’s a need to be cautious too.
“I think that we’re going to be careful about that. We want to remain diversified. We don’t want to get back into a position where we have 70-plus percent of our sourcing coming from one country,” Rosenfeld said. “And so we’re going to continue to try to be diversified, but it obviously does give us greater flexibility to go back to China, where we need to get the right deliveries and quality, pricing, speed, et cetera.”
For the three months ended Sept. 30, net income was down 62.9 percent to $20.5 million, or 29 cents a diluted share, on total revenue that rose 6.9 percent to $667.9 million. Revenue for the wholesale business fell 10.7 percent to $442.7 million. Excluding the recently acquired Kurt Geiger brand, wholesale revenue was down 19.0 percent. Wholesale footwear revenue decreased 10.9 percent, or 16.7 percent when excluding the Kurt Geiger brand. Wholesale accessories/apparel revenue decreased 10.3 percent, or 22.5 percent excluding Kurt Geiger. The company closed on its $360 million deal for the Kurt Geiger London brand in May.
The good news from Rosenfeld was that while the company will continue to see negative impacts from tariffs, “We believe the worst is behind us.” He said order patterns from wholesale customers are “normalizing and we are mitigating a larger percentage of the gross margin pressure through strategic pricing actions and sourcing initiatives.” The CEO added that underlying consumer demand “for our brands and products is strong.”
Rosenfeld said the fall product assortment for Steve Madden is resonating with consumers, enabling the company to “outperform the competition.” He cited boots as a standout led by casual tall shaft styles, although the company is also seeing strong performance in dress shoes across various heel heights, as well as casual such as loafers, Mary-Janes and mules. The CEO also noted how the company has been “really pleased so far with the lack of price resistance that we’ve seen, particularly in the Madden brand.”
But Rosenfeld also emphasized that the “real takeaway on the price increases” is that when you have real fashion for product or new fashion, the consumer is willing to pay. “Where you have to be much more careful with price increases is on the core and more basic product,” he said, adding that the higher prices were planned out, style by style, as opposed to a blanket uptick evenly across the board for every item.
He said that some items had stock-outs, but good early reads on some of the product enabled the firm to fill some reorders. And because a “good portion” of the product was coming from Mexico, “that’s where we have a lot of speed and we can get back into reorders in 30 days,” the CEO said.
The marketing team has increased investment across YouTube, TikTok, Snapchat and Pinterest, helping to drive increases in awareness and conversion with key Gen Z and Millennial customers. “As a result, both wholesale sell-through and DTC (direct-to-consumer) sales trends for Steve Madden have accelerated meaningfully in recent months, Rosenfeld said.
As for Geiger, he said it has “strong momentum” as consumers continue to respond to its designs and “eye-catching marketing,” including campaigns featuring actress Emily Ratajkowski. He noted that the brand is over 70 percent DTC.
Comparable sales for the brand were up mid-teens for the quarter, and the company is making progress on revenue strategies, including expanding Geiger in international markets through the Steve Madden network, as well as growing Steve Madden in the U.K. through the Geiger platform. Rosenfeld also said there are plans to open a handful of stores in the U.S. in 2026 for the Geiger brand, adding that there’s opportunity for growth in both brick-and-mortar doors and in wholesale sales.
In company-owned brands, the CEO cited success in the U.S. footwear business for Dolce Vita, which is expanding in international markets and will be extended to other categories such as handbags. The company is working on renewed cultural relevance for the Betsey Johnson brand, as well as differentiated merchandise assortments. “Both Dolce Vita and Betsey Johnson are on track to deliver revenue gains for the full year 2025, despite the headwinds from tariffs,” he said.
Looking ahead to holiday, Rosenfeld said the company has been able to be less promotional “because of the strength of the product and the trend.” He said that while the company needs to remain competitive into the fall and heart of the holiday season when everybody’s promotional, “we’re going to attempt to continue to be less promotional where we can.”
