The following discussion of our financial condition and results of operations for the three months ended March 31, 2022 should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

All references in this Quarterly Report to "we," "our," "us" and the "Company" refer to Steven Madden, Ltd. and its subsidiaries unless the context indicates otherwise.

This Quarterly Report contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. You can identify forward-looking statements by words such as: "may," "will," "expect," "believe," "should," "anticipate," "project," "predict," "plan," "intend," or "estimate," and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent our current beliefs, expectations and assumptions regarding anticipated events and trends affecting our business and industry based on information available as of the time such statements are made. We caution investors that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of our control. Our actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:



•our ability to maintain adequate liquidity when negatively impacted by
unforeseen events such as an epidemic or pandemic (COVID-19), which may cause
disruption to our business operations and temporary closure of Company-operated
and wholesale partner retail stores, resulting in a significant reduction in
revenue for an indeterminable period of time;
•our ability to accurately anticipate fashion trends and promptly respond to
consumer demand;
•our ability to compete effectively in a highly competitive market;
•our ability to adapt our business model to rapid changes in the retail
industry;
•our dependence on the retention and hiring of key personnel;
•our ability to successfully implement growth strategies and integrate acquired
businesses;
•our ability to achieve operating results that are consistent with prior
financial guidance;
•supply chain disruptions to product delivery systems and logistics, and our
ability to properly manage inventory;
•our reliance on independent manufacturers to produce and deliver products in a
timely manner, especially when faced with adversities such as work stoppages,
transportation delays, public health emergencies, social unrest, changes in
local economic conditions, and political upheavals as well as their ability to
meet our quality standards;
•changes in trade policies and tariffs imposed by the United States government
and the governments of other nations in which we manufacture and sell products;
•legal, regulatory, political and economic risks that may affect our sales in
international markets;
•additional tax liabilities resulting from audits by various taxing authorities;
•our ability to adequately protect our trademarks and other intellectual
property rights;
•changes in U.S. and foreign tax laws that could have an adverse effect on our
financial results; and
•other risks and uncertainties indicated from time to time in our filings with
the Securities and Exchange Commission.

These risks and uncertainties, along with the risk factors discussed under Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q and, in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021, should be considered in evaluating any forward-looking statements contained in this report. We do not undertake any obligation to publicly update any forward-looking statement, including without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments or otherwise.



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Overview:

($ in thousands, except earnings per share and per share data)

Steven Madden, Ltd. and its subsidiaries design, source and market fashion-forward branded and private label footwear, accessories and apparel for women, men and children. We distribute our products through department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers and independent stores throughout the United States, Canada, Mexico, Europe, South Africa and certain other international markets. In addition, our products are distributed through our retail stores within the United States, Canada, Mexico and South Africa, and our joint ventures in Israel, Taiwan and China, and under special distribution arrangements in certain European countries, the Middle East, North Africa, South and Central America, Australia and various countries in Asia, in addition to our e-commerce sites. Our product lines include a broad range of contemporary styles designed to establish or capitalize on market trends, complemented by core product offerings. We have established a reputation for design creativity and our ability to offer quality, trend-right products at accessible price points, delivered in an efficient manner and time frame.

Executive Summary

COVID-19

The COVID-19 pandemic has negatively impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets. The COVID-19 pandemic has also significantly impacted our supply chain. We have experienced disruptions and delays in shipments and increases in the pricing of most components of our products. The receipt of inventory sourced from areas impacted by COVID-19 has been slowed or disrupted and our manufacturers have also faced similar challenges in receiving raw materials and fulfilling our orders. In addition, there is significant inflationary pressure on ocean and air freight costs as capacity issues and port congestions continue to persist due to the post pandemic demand levels.

Key Highlights

Total revenue for the quarter ended March 31, 2022 increased 55.0% to $559,734 compared to $361,025 in the same period of last year. Net income attributable to Steven Madden, Ltd. was $74,513 in the first quarter of 2022 compared to $21,197 in the same period of last year. The effective tax rate for the first quarter of 2022 increased to 23.8% compared to 20.3% in the first quarter of last year. Net income was $0.94 per share on 79,663 diluted weighted average shares outstanding in the first quarter of 2022 compared to $0.26 per share on 81,889 diluted weighted average shares outstanding in the first quarter of last year.

Our inventory turnover, calculated on a trailing twelve-month average, for the quarters ended March 31, 2022 and 2021 was 5.9 times and 7.0 times, respectively. The decrease in inventory turnover is primarily due to the increase in lead times as a result of the supply chain disruptions and higher penetration from our Direct-to-Consumer segment. Our total Company accounts receivable days outstanding decreased to 71 days in the first quarter of 2022 compared to 79 days in the first quarter of 2021. As of March 31, 2022, we had $180,244 in cash, cash equivalents and short-term investments, no debt and total stockholders' equity of $843,407. Working capital was $522,843 as of March 31, 2022, compared to $478,038 on March 31, 2021.



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The following tables set forth information on operations for the periods indicated:

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