SHOO Stock Jumps 10% After Q2 Earnings Beat, FY26 Outlook Raised

Management highlighted strong consumer response to its trend-right assortments, continued momentum in direct-to-consumer (DTC) and wholesale channels, and solid performance from Kurt Geiger and Dolce Vita.

The company raised its fiscal 2026 revenues and adjusted earnings per share (EPS) guidance, reflecting confidence in the momentum across its brands and stronger-than-expected second-quarter performance. Investors responded positively, sending SHOO shares up 10.2% yesterday.

SHOO’s Q2 Performance: Key Insights

SHOO posted adjusted earnings of 44 cents per share, which beat the Zacks Consensus Estimate of 33 cents per share. The bottom line more than doubled from adjusted earnings of 20 cents reported in the prior-year quarter.

Total revenues increased 19.1% year over year to $665.9 million from $559 million, surpassing the Zacks Consensus Estimate of $634 million. Excluding Kurt Geiger, consolidated revenues increased 11.2% year over year.

SHOO’s Segmental Performance

Wholesale revenues increased 13% year over year to $407.5 million, surpassing our estimated mark of $388 million. Excluding Kurt Geiger, wholesale revenues increased 11.5%. Adjusted gross margin in the segment expanded to 35.2% from 30.9% in the prior-year period, driven by higher average selling prices, a smaller negative impact from tariffs and a lower penetration of private label.

Wholesale footwear revenues increased 9% year over year to $240 million, or 7.8% excluding Kurt Geiger, due to strong growth in the branded business, partially offset by a decline in private label. This beat our estimated mark of $235.3 million. Wholesale accessories/apparel revenues increased 19.2% year over year to $167.5 million, or 17.5% excluding Kurt Geiger, also due to sustained momentum in the branded business, partially offset by a decline in private label. The figure exceeded our consensus mark of $152.7 million.

DTC revenues increased 30.6% year over year to $255.4 million, surpassing our estimated mark of $235.2 million. Excluding Kurt Geiger, DTC sales grew 11.1%, supported by double-digit gains across both brick-and-mortar stores and e-commerce. The Steve Madden brand continued to perform well, with U.S. comparable sales rising 17%, while global comparable sales increased 9%. 

Adjusted gross margin in the DTC business expanded to 64% from 61.3% a year ago, benefiting from higher average selling prices, lower promotional activity and a smaller tariff headwind. Management also noted that DTC momentum has continued into the third quarter.

Licensing royalty income totaled $3 million, up modestly from $2.9 million in the prior-year quarter. This also beat our estimated mark of $2.9 million.

Steven Madden’s International Business Posts Growth

International comparable sales increased 1%, while excluding the GCC business, comparable sales rose 4%. The company ended the second quarter with 382 company-operated stores, including 92 outlets, along with eight e-commerce websites and 164 international concessions. During the quarter, the company also opened two full-price Kurt Geiger stores in the United States, bringing its total U.S. full-price Kurt Geiger store count to seven, with existing stores delivering a 12% comparable sales increase.

SHOO’s Margin & Cost Performance

Adjusted gross profit increased 32.2% year over year to $309.7 million, beating our estimate of $278.2 million. Adjusted gross margin expanded 460 basis points to 46.5%, reflecting stronger profitability across both the wholesale and direct-to-consumer businesses. 

Adjusted operating expenses increased 25.3% year over year to $265.1 million, which surpassed our estimate of $243.4 million. As a percentage of revenues, adjusted operating expenses increased to 39.8% from 37.9% in the year-ago quarter, primarily due to the inclusion of a full quarter of Kurt Geiger and higher incentive compensation.

Adjusted income from operations nearly doubled to $44.5 million from $22.6 million in the prior-year quarter. Adjusted operating margin expanded 270 basis points year over year to 6.7%.

SHOO’s Financial Health Snapshot

As of June 30, 2026, Steven Madden had cash and cash equivalents of $94.7 million and total debt of $124.8 million, resulting in net debt of $30.1 million. Inventories declined 13.7% year over year to $377.2 million, primarily reflecting a 30% reduction in inventory at the Kurt Geiger business. During the second quarter, the company received $92.1 million in tariff-related refunds, including $3.1 million in interest, and used the proceeds to reduce outstanding debt.

Capital expenditures totaled $8.5 million during the quarter. The company did not repurchase any shares in the open market but spent approximately $1 million to acquire shares through the net settlement of employee stock awards. Steven Madden's board also declared a quarterly cash dividend of 21 cents per share, payable on Sept. 24, 2026, to shareholders of record as of Sept. 11, 2026.

SHOO Raises Its 2026 Outlook

Steven Madden raised its fiscal 2026 revenue guidance and expects revenues to increase 11-13% from the fiscal 2025 reported level, up from its previous expectation of 10-12% growth. The company also raised its adjusted EPS guidance to $2.05-$2.15 from the prior stated $2-$2.10, while reaffirming the EPS guidance of $2.55-$2.65.

Management expects the Steve Madden brand to deliver high-single-digit revenue growth, Kurt Geiger to generate mid-teens pro forma revenue growth and Dolce Vita to post high-single-digit to low-double-digit revenue growth in fiscal 2026. Excluding Kurt Geiger, DTC revenues are projected to grow at a high-single-digit rate, while wholesale revenues are expected to increase at a low-single-digit pace. 

Including Kurt Geiger, management expects DTC revenues to grow in the low- to mid-20% range and wholesale revenues to increase at a mid-single-digit rate. Private-label revenues are still expected to decline in the mid- to high-teens range, whereas the branded wholesale business is anticipated to grow at a high-single-digit rate.

The company expects gross margin to improve on a year-over-year basis in each of the remaining quarters of fiscal 2026, although the pace of expansion is likely to moderate as it laps the Kurt Geiger acquisition and prior pricing actions. Management expects pressure from higher freight and supplier costs stemming from the prolonged Middle East conflict, including an additional 6 cents per share headwind in the second half related to freight. 

SG&A expenses are projected to be approximately 38.3% of revenues for fiscal 2026, reflecting increased investments in brand marketing. Management expects a more typical seasonal cadence in the second half, with the third quarter contributing more to second-half revenues and earnings than the fourth quarter, unlike the unusual pattern seen in fiscal 2025.

SHOO Stock Past 3-Month Performance

Image Source: Zacks Investment Research

Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 28.2% compared with the industry’s 0.4% growth.

Eye These Better-Ranked Picks

Genesco Inc. GCO is a Nashville-based specialty retailer and branded company. It sells footwear and accessories through retail stores. The company flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings indicates growth of 55.2% from the year-ago actuals. GCO delivered a trailing four-quarter average earnings surprise of 3.8%.

Tilly's, Inc. TLYS is a specialty retailer in the action sports industry selling clothing, shoes and accessories. The company also sports a Zacks Rank #1 at present. 

The Zacks Consensus Estimate for Tilly's current fiscal-year sales indicates growth of 4.9% from the year-ago actuals. TLYS delivered a trailing four-quarter average earnings surprise of 155.3%. 

Designer Brands Inc. DBI designs, produces and retails footwear and accessories. It offers shoes, boots, sandals, sneakers, socks, handbags and accessories. It currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Designer Brands’ current fiscal-year earnings and sales suggests growth of 137.5% and 0.5%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 112.8%.

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