The horrible month of March, characterized by huge amounts of cancelled orders, was enough to force Steve Madden to rethink its plan. The US-based group announced its sales decreased by 13.6% in the first quarter of 2020, which also recorded a loss. President and CEO, Edward Rosenfeld, meanwhile remains confident for the future.
Steve Madden’s sales decreased by 13.6% during the 1st quarter of 2020, equal to 359 million USD. The value was just below analysts’ expectations, as cited by Footwear News, since they expected it to be 356.3 million. Income before taxes was of -25.2 million USD, compared to the +45.9 million of the 1st quarter of 2019. The results were mainly impacted by the wholesales segment (-13%), which was influenced by the “significant number of orders cancelled due to the Covid-19 pandemic”. Sales from the direct retail channel dropped 15.8% due to the forced shutdown of stores.
“After a positive 2019- commented Edward Rosenfeld -, 2020 started off well, with revenue and profits growing in comparison to the first 2 months of 2019. Starting March, though, our activities weakened due to the effects of the Covid-19 pandemic”. In order to offset the impact of the pandemic, Steve Madden has paused its buyback program and its dividend and taken 50 million USD out of its credit line after having decided to cut salaries, expenses and investments. “We are confident, when looking to the future, that our strengths, including brands, business model and financials, will allow us to face this crisis and prosper once conditions will return to normal”, stated Mr. Rosenfeld.
Image taken from stevemadden.com
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