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Investing.com - Williams Trading raised its price target on Steven Madden (NASDAQ:SHOO) to $42.00 from $28.00 while maintaining a Buy rating ahead of the company’s third-quarter earnings report, scheduled for October 29. Currently trading at $32.53, the stock has shown strong momentum with a 22% return over the past six months, though InvestingPro data suggests the stock is currently in overbought territory.
The firm cited a shift to women’s dress shoes that plays into the strength of the core Steve Madden brand, noting that many women are seeking non-sneaker footwear options. Williams Trading observed that Steve Madden shoes performed well during the Nordstrom Anniversary Sale, with current trends featuring lower kitten heels, block heels, flats, and western-style boots. The company maintains a solid financial foundation, with InvestingPro analysis showing a "GOOD" overall Financial Health score and an impressive 8-year track record of consistent dividend payments.
Williams Trading expects Steven Madden to gain market share as tariffs drive higher costs for private label footwear sold at retailers like DSW, Dillards, Macy’s, and Nordstrom. The firm believes more retail buying will be allocated to Steven Madden brands as their price-value relationship becomes more competitive compared to tariff-impacted private label products. With a healthy gross profit margin of 40.8% and sufficient cash flows to cover interest payments, the company appears well-positioned to capitalize on these market dynamics.
The research firm highlighted that Steven Madden’s gross margin is likely to exceed consensus estimates due to favorable channel mix. In the second quarter of 2025, the company’s total gross margin increased 41 basis points despite decreases in both wholesale and direct-to-consumer (DTC) segment margins.
The acquisition of Kurt Geiger in early May has shifted Steven Madden’s sales mix, with DTC making up 35% of total second-quarter 2025 sales compared to 26.1% in the same period of 2024. Williams Trading forecasts third-quarter 2025 DTC penetration of 31.5% versus 20.2% in the third quarter of 2024.
In other recent news, Steven Madden reported its second-quarter earnings for 2025, revealing a mixed financial outcome. The company’s earnings per share exceeded expectations, reaching $0.20 compared to the forecast of $0.18, marking an 11.11% surprise. However, the revenue for the quarter fell short, coming in at $559 million, missing the anticipated $578.41 million by 3.36%. This revenue miss was attributed to tariff-related disruptions, including order cancellations and delivery delays, which impacted both wholesale and direct-to-consumer channels. Following these results, BTIG lowered its price target for Steven Madden to $34 from a previous $38, while maintaining a Buy rating. BTIG’s decision came after meetings with key executives during FFANY Market Week, where the firm reviewed the company’s product offerings and assessed the ongoing challenges. Despite the tariff volatility, BTIG remains optimistic about the company’s prospects, as reflected in their continued Buy rating. These developments highlight the complexities Steven Madden faces in navigating current market conditions.
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