Crispr Therapeutics shares tumble after significant earnings miss
On Friday, UBS analyst Jay Sole adjusted the price target for Steven Madden (NASDAQ:SHOO) shares, reducing it to $38.00 from the previous $44.00 while maintaining a Neutral rating on the stock. Currently trading at $38.65, the stock has declined nearly 9% year-to-date, according to InvestingPro data. The revision follows Sole’s analysis that three key factors will likely result in softer fiscal year 2025 earnings per share (EPS) guidance for the company. The concerns include cautious department store inventory purchases, high channel inventory levels for handbags leading to weaker wholesale orders, and margin pressures due to the company’s manufacturing relocation efforts from China and tariff impacts on U.S. imports from China.
Sole anticipates that Steven Madden will set its FY25 EPS guidance between $2.25 and $2.35, a projection that does not include the potential impact of its pending acquisition of fashion brand Kurt Geiger. The UBS analyst expects that the guidance will be issued without considering Kurt Geiger’s contributions, as the acquisition deal has not been finalized. The expected EPS guidance range falls below the consensus estimate of $2.64 and is also considered lower than the market expectation, which Sole believes is between $2.35 and $2.45. InvestingPro analysis shows the company maintains a GOOD financial health score, with liquid assets exceeding short-term obligations and a moderate debt level.
The options market is currently pricing in a potential price move of plus or minus 7.6% surrounding the guidance event, which is significantly higher than the historical average move of 3.7%. However, Sole predicts the actual volatility will be less than the options market suggests. This prediction is based on the belief that some of the risk has already been factored into Steven Madden’s stock price, which has seen a 9% decline year-to-date, underperforming the S&P 500 index by approximately 1300 basis points.
In other recent news, Steve Madden has announced its acquisition of UK-based Kurt Geiger for £289 million in cash. This strategic move aims to bolster Steve Madden’s international presence, particularly in the accessories category and direct-to-consumer channels. Kurt Geiger, known for its distinct brand image and successful product categories, reported estimated revenues of around £400 million for the twelve months ending February 1, 2025. Steve Madden’s Board of Directors has unanimously approved the transaction, and the deal is expected to close in the second quarter of 2025, pending regulatory approvals.
Meanwhile, BTIG has adjusted its price target for Steven Madden shares to $46, down from $52, while maintaining a Buy rating. The revision accounts for challenges like tariffs on goods from China and Mexico, which are expected to impact the company’s financial performance in the first half of 2025. Needham, on the other hand, has maintained a Hold rating, citing anticipated gross margin challenges due to tariffs, which could result in a 120 basis point decline in 2025.
Citi has also maintained a Neutral rating on Steven Madden stock, with a price target of $38. The firm anticipates significant gross margin weakness in fiscal year 2025, largely due to the company’s exposure to China tariffs affecting 70% of its production. These developments highlight the ongoing challenges and strategic maneuvers for Steve Madden in the current economic environment.
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