Over the past year, shares of Steve Madden
One analyst upgraded the stock, and another initiated coverage on Thursday; as a result, the stock jumped back up to a recent $29.10. Analysts like Madden's mix of footwear for low- to high-end consumer price points, a diversity that also leads to wider appeal for its wholesale business with department stores and other retailers. In addition, nearly 32% of its revenues come from its own growing base of 98 retail stores. In terms of demographics, women dominate the company's market; Madden Men's sales make up only about 15% of total sales.
Steve Madden may be a good alternative to pure-shoe retailers such as PaylessShoeSource
At about 15 times next year's projected earnings, the quick run-up in the shares appears to have lifted Madden to "fully valued" status, given its mixed growth track record. Top-line growth should continue, as management opens new stores and focuses on a younger female demographic. But at the current valuation, I'd demand more consistent earnings and cash flow generation. This is hardly impossible, but the company operates in the fickle footwear fashion industry, adding an ever-present element of unpredictability.
Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.