Digital Focus And Global Expansion Will Define Future Trends

Key Takeaways

• Strong digital and international growth, strategic focus on younger consumers, and e-commerce expansion are driving higher margins and diversified revenue streams.
  
• Supply chain diversification, vertical integration, and the Kurt Geiger acquisition enhance cost efficiency, margin stability, and global brand scaling potential.
  
• Ongoing tariff uncertainty, sourcing concentration, and inventory risks threaten margin stability, earnings growth, and a sustainable recovery in the face of volatile consumer demand.

Catalysts

Designs, sources, and markets fashion-forward branded and private label footwear, accessories, and apparel in the United States and internationally.

• Strong double-digit digital growth-especially in the U.S. for both Steve Madden and newly acquired Kurt Geiger-alongside increased marketing focus on Gen Z/millennial consumers and expanded e-commerce investments, should enable faster revenue acceleration and higher margin mix as direct-to-consumer channels continue to outpace wholesale.
  
• Expansion of international business, evidenced by high single-digit to double-digit constant currency growth across EMEA, APAC, and Americas outside the U.S., and plans to scale Kurt Geiger globally through the Steve Madden network, positions the company to benefit from a rising global middle class and geographically diversified revenue, supporting top-line growth.
  
• Early consumer acceptance of selective price increases (~10% on average, higher for new fashion and Kurt Geiger), combined with a focus on trending categories like boots and dress shoes, signals potential for margin recovery and higher average selling prices as macro/tariff headwinds abate.
  
• Vertical integration efforts and ongoing supply chain diversification away from China (expecting U.S. imports sourced from China to drop from 71% to 30% YoY) provide a pathway to improve gross margin stability and working capital management, supporting future earnings recovery once tariff disruptions stabilize.
  
• Kurt Geiger integration creates meaningful synergies, with opportunities to scale the brand via Steve Madden's distribution in the U.S. and globally, leverage digital momentum, and unlock cost efficiencies-potentially accelerating revenue growth, portfolio diversification, and net margin expansion over the medium to long term.

Steven Madden Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Steven Madden's revenue will grow by 10.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.9% today to 8.5% in 3 years time.
• Analysts expect earnings to reach $266.9 million (and earnings per share of $3.11) by about August 2028, up from $91.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.9x on those 2028 earnings, down from 20.7x today. This future PE is lower than the current PE for the US Luxury industry at 17.3x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.21%, as per the Simply Wall St company report.

Steven Madden Future Earnings Per Share Growth

Risks

• Prolonged and uncertain tariff regimes on imports, especially from China and other key sourcing countries like Brazil, create ongoing pressure on gross margins, increase landed costs, and disrupt both wholesale and DTC inventory flows, raising the risk of persistent margin compression and earnings volatility.
  
• Heavy reliance on value-priced wholesale channels (mass and off-price), which experienced significant order cancellations (accounting for 95% of the wholesale revenue shortfall), exposes the company to wholesale customer caution and limited pricing power, constraining top-line revenue growth and margin recovery if consumer discretionary spending in these segments remains depressed.
  
• Difficulty in swiftly diversifying sourcing away from China and adapting to shifting tariff landscapes in other countries (e.g., Brazil introducing new tariffs), increases operational complexity and raises the risk of continued supply chain disruptions, delayed deliveries, and increased cost of goods sold, all of which can dampen earnings and net margins.
  
• Elevated inventory levels (up significantly due to recent acquisition and tariff impacts), along with pressure from fast-changing fashion cycles and uncertain consumer response to price increases, heighten the risk of inventory obsolescence, higher markdowns, and negative impact on net income and return on capital.
  
• Growing operating expenses and lack of near-term guidance for margin recapture-compounded by integration risks with the Kurt Geiger acquisition and potentially lower near-term EBIT margins due to tariffs-could constrain sustainable earnings growth and challenge the achievement of double-digit operating margins in the foreseeable future.

Valuation

• The analysts have a consensus price target of $28.125 for Steven Madden based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $34.0, and the most bearish reporting a price target of just $24.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.1 billion, earnings will come to $266.9 million, and it would be trading on a PE ratio of 9.9x, assuming you use a discount rate of 9.2%.
  
• Given the current share price of $25.88, the analyst price target of $28.12 is 8.0% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.