Footwear companies, bolstered by strong sales from consumers who view shoes as fashion accessories, posted strong quarterly profits Thursday.
Brown Shoe Co. Inc. , Genesco Inc. and Steven Madden Ltd. all reported profit gains that beat analysts’ estimates.
“The fashion footwear category has been incredibly strong, with a lot of momentum,” said Sidote & Co. analyst Heather Boksen. “I suspect Brown Shoe, like Steve Madden, is benefiting from strength in the fashion, dress and casuals” categories, she said.
Steven Madden, known for its trendy shoes and accessories, said net income jumped on better-than-expected sales in its wholesale business and improving margins in its retail business, sending its shares up 3 percent in Thursday afternoon trade.
Fourth-quarter profit jumped to $7.4 million, or 51 cents per share, from $373,000, or 3 cents per share, a year ago.
Three analysts, on average, expected 50 cents per share, excluding items. They raised their estimates from 34 cents after Madden forecast a profit of 49 cents to 51 cents in January.
Total sales rose 8 percent to $91.4 million as a 14.7 percent increase in wholesale revenue outweighed a slight decline in retail revenue.
Quarterly same-store sales fell 6.3 percent as the company phased out certain items to make room to launch accessories by Daniel M. Friedman, which it acquired last month.
Brown Shoe, whose brands include Bass, Dr. Scholl’s and Lifestride, is also positioned to benefit from strength in the fashion category, through its brand “Carlos” by musician Carlos Santana and its acquisition of Bennett Footwear Group.
Shares of Brown Shoe swung between gains and losses in morning trade as investors weighed a jump of 56 percent in net profit against some lukewarm segment results.
“There were some issues in terms of their wholesale business,” said Susquehanna Financial analyst John Shanley. “It was a little less than we’d have liked.” Shanley also singled out the Naturalizer retail business, calling it “a little less robust.”
Since last June, St. Louis-based Brown Shoe has closed 95 Naturalizer stores in hopes of boosting the unit’s profitability.
Fourth-quarter net income at Brown Shoe rose to $13.4 million, or 70 cents per share, from $8.5 million, or 46 cents per share.
Genesco, whose brands include Journeys, Johnston & Murphy and Underground Station, said net income rose to $31.3 million, or $1.15 per share, in the fourth quarter, from $25.7 million, or 98 cents per share, a year earlier. Analysts expected earnings of $1.13 a share, on average.
D.A. Davidson analyst Mitch Kummetz said Genesco’s strong results, especially at Journeys and Johnston & Murphy, signals that it is well positioned for fiscal 2007.