Steve Madden Closes Kurt Geiger Deal — But Tariffs Remain a Headwind as Q1 Sales Miss Expectations
Steve Madden Ltd. completed its acquisition of Kurt Geiger on Tuesday, but first quarter results were mixed as sales missed Wall Street's consensus expectations.
'We are also thrilled to have completed the acquisition of Kurt Geiger, which adds a powerful new growth engine to our company,' the company's chairman and CEO Edward Rosenfeld said in a statement.
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The company disclosed in February that it was acquiring the London-based footwear and accessories brand for $360 million.
He said Kurt Geiger continues to demonstrate 'outstanding momentum,' noting also that its differentiated and elevated positioning in the market makes it a 'complementary addition' to the company, given Madden's 'strategic initiatives of expanding in international markets, accessories categories and direct-to-consumer channels.'
Looking ahead, the CEO said the company faces 'meaningful near-term headwinds' and uncertainty because of the impact of new tariffs.
'We are moving swiftly to adapt to the changing landscape, with a focus on mitigating near-term impacts while positioning the company for long-term growth,' Rosenfeld said.
The CEO said in the fourth quarter earnings conference call in February that the company's goal is to cut the percentage of goods produced in China by 40 to 45 percent.
Rosenfeld reiterated in a statement Wednesday how the company's strength — its agile business model and 'fortress balance sheet' — gives it a competitive advantage, and said the company is 'optimistic that the current disruption will create opportunities for market share gains over time.'
The company also withdrew its 2025 earnings guidance and said it would not be providing financial estimates due to macroeconomic uncertainty connected to the impact of new tariffs on imported goods to the U.S.
For the three months ended March 31, net income fell 8 percent to $40.4 million, or 57 cents a diluted share, versus net income of $43.9 million, or 60 cents, in the same year-ago period. On an adjusted basis, net income was 42.4 million, or 60 cents a diluted share for the quarter. Net sales inched up 0.1 percent to $551.4 million from $550.6 million a year ago.
The company easily bested Wall Street's expectation of an adjusted diluted share of 46 cents, but missed on its revenue forecast of $556.3 million.
Madden's wholesale revenue rose 0.2 percent to $439.3 million from year-ago levels, which included a 0.2 percent increase in footwear revenue, the company said. Direct-to-consumer revenue slipped 0.2 percent to $112.1 million, which was attributed in part to an increase in promotional activity.
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