Steven Madden Earnings Preview

Steven Madden (Nasdaq: SHOO  ) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings Tuesday. Steven Madden designs, sources, markets, and retails women's, men's, and children's shoes for sale through its wholesale and retail channels.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Steven Madden, with four of six rating it a buy and the remainder rating it a hold. Analysts like Steven Madden better than competitor SKECHERS USA overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared with three months ago.
• Revenue forecasts: On average, analysts predict $195 million in revenue this quarter. That would represent a rise of 22.9% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.54 per share. Estimates range from $0.53 to $0.55.

What our community says:
CAPS All-Stars are solidly behind the stock with 90.1% granting it an "outperform" rating. The community at large backs the All-Stars with 90.6% assigning it a rating of "outperform." Fools are bullish on Steven Madden, though the message boards have been quiet lately with only 94 posts in the past 30 days. Even with a robust four out of five stars, Steven Madden's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Steven Madden's profit has risen year over year by an average of 34.4%. The company's gross margin shrank by 4.7 percentage points in the last quarter. Revenue rose 23.6% while cost of sales rose 34.8% to $96.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	43.3%	43.2%	42.1%	45.2%
Operating Margin	16.1%	17.0%	20.3%	19.6%
Net Margin	10.5%	10.9%	12.4%	12.1%

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