Steve Madden's sales jump leaves cash tied up with customers
Profit more than doubled as shoes and accessories sold better. A comparison of the filings shows why the stronger quarter produced little operating cash.
Ticker Byline
Steven Madden, Ltd.
Steve Madden designs and sells footwear, handbags and apparel through wholesale, stores, e-commerce and licensing.
- Ticker
- SHOO
- Exchange
- XNAS
- SEC CIK
- 0000913241
Steven Madden, Ltd. designs, sources and sells footwear, handbags, accessories and apparel. Its shares trade on Nasdaq as SHOO. The company is incorporated in Delaware and is based in Long Island City, New York.
Its wholesale business sells branded and private-label products to department stores, shoe chains, online retailers, discount retailers and other merchants. Independent manufacturers make the products. Steve Madden also sells directly through its own stores, websites and concessions in other retailers, and earns licensing income.
Its brands include Steve Madden, Dolce Vita, Betsey Johnson, Kurt Geiger London and Carvela. The company operates internationally through subsidiaries, joint ventures and distribution arrangements.
Quarterly results
| Measure | 2025 | 2026 |
|---|---|---|
| Revenue | $667.9 | $772.6 |
| Operating income | $31.4 | $73.2 |
| Net income to shareholders | $20.5 | $52.4 |
| Diluted EPS | $0.29 | $0.72 |
| Adjusted net income | $30.4 | $57.3 |
| Adjusted diluted EPS | $0.43 | $0.79 |
| Operating cash flow | $23.4 | $3.5 |
| Measure | 2025 | 2026 |
|---|---|---|
| Revenue | $559.0 | $665.9 |
| Operating income | -$40.3 | $39.3 |
| Net income to shareholders | -$39.5 | $27.7 |
| Diluted EPS | -$0.56 | $0.38 |
| Adjusted net income | $13.9 | $31.7 |
| Adjusted diluted EPS | $0.20 | $0.44 |
Operating income, shareholder net income and diluted EPS follow U.S. accounting rules. Adjusted earnings exclude specified acquisition-related, legal and other items. The 2025 comparison included acquisition expenses and costs from selling acquired inventory marked up in the acquisition. Those charges made the reported profit recovery larger than the adjusted recovery.
Third-quarter wholesale revenue increased to $528.7 million from $442.7 million. The wholesale gross margin reached 36.8%, versus an adjusted 33.6% a year earlier. Management attributed the improvement to operating performance and a smaller tariff burden, partly offset by freight costs.
Direct-to-consumer revenue rose to $239.2 million from $221.5 million. Its gross margin was 60.7%, compared with an adjusted 61.9% a year earlier, reflecting freight costs and markdowns. The retail operation reported $1.0 million of operating income, versus a $4.4 million loss.
Cash and borrowing
Research by Ticker Byline shows that third-quarter operating cash flow was $3.5 million, versus $23.4 million a year earlier, using the nine-month reports less the corresponding first-half reports. Customer receivables absorbed $107.5 million and inventory used $39.4 million during the quarter. Average collection time nevertheless improved to 56 days from 58. Our analysis of sales growth and the cash gap explains the comparison.
Across the first nine months, operating cash flow rose to $152.7 million from $71.1 million. This included a second-quarter tariff-refund receipt of $92.1 million, including interest. Capital spending was $28.8 million over the nine months.
Cash fell to $71.3 million at September 30 from $94.7 million in June. Outstanding borrowing principal was $125 million, down from $130 million. The September balance comprised a $100 million term loan and $25 million drawn on a revolving credit line. The company subsequently repaid that $25 million from cash before its November filing, clearing the revolving balance.
The term loan and $250 million revolving facility mature in May 2030. Operating lease liabilities were a separate $252.0 million at September 30.
Completed acquisitions
Steve Madden completed the Kurt Geiger acquisition on May 6, 2025. The acquisition-date price was $403.3 million, including contingent consideration. It added footwear, handbags, stores and concessions, with a larger presence in the United Kingdom and Europe. Both third-quarter comparisons include a full quarter of Kurt Geiger; the nine-month growth comparison also benefits from a longer period of ownership.
In June 2026, the company completed a $1.3 million purchase of the Kurt Geiger and Steve Madden distribution business in Spain, Portugal and Andorra. Those operations sell primarily through the direct-to-consumer channel.
What changed in the outlook
In July, management expected 2026 revenue growth of 11% to 13% and adjusted diluted EPS of $2.05 to $2.15. In November, it raised the revenue-growth floor to 12%, keeping the 13% upper end, and lifted adjusted EPS to $2.15 to $2.20.
The reported EPS range narrowed to $2.58 to $2.63 from $2.55 to $2.65. The full-year adjusted measure removes tariff-refund effects, acquisition-related and legal costs, and other specified items.
The next results will test the higher full-year earnings target and show how much cash comes in from the larger receivables balance.
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