"After a strong 2019, we got off to a good start to 2020, with revenue and earnings trending above plan through the first two months of the year and very positive consumer reaction to the Spring product in our flagship Steve Madden brand. Beginning in March, however, our business weakened materially due to the effects of the COVID-19 pandemic. Since then, our top priority has been protecting the safety and well-being of our employees and the broader community, followed by ensuring the long-term viability and strength of our business. As we look ahead, we are confident that our strengths – including our brands, business model and balance sheet – will enable us to navigate this crisis and to thrive once conditions normalize", commented Edward Rosenfeld, Chairman and Chief Executive Officer.

Steve Madden's revenue decreased by 13.6% to 359.2 million US dollars compared to 415.8 million US dollars in similar period of 2019. Gross margin for the period was 37.2% compared to 38.9% in the same period last year. Net loss attributable to Steven Madden, Ltd. was (17.5) million US dollars, or (0.22) US dollars per diluted share (compares to 34.5 million US dollars, or 0.41 US dollars per diluted share, in the prior year’s first quarter). Adjusted net income attributable to Steven Madden, Ltd. totalled 13.0 million US dollars, or 0.16 US dollars per diluted share (35.1 million US dollars, or 0.42 US dollars per diluted share).

Segment Results

Revenue for the wholesale business decreased by 13.0% to 302.7 million US dollars in the first quarter of 2020, including a 15.0% decline in wholesale footwear and a 5.4% decline in wholesale accessories/apparel. The revenue decline was driven by significant order cancellations in March resulting from the COVID-19 pandemic. Gross margin in the wholesale business decreased to 32.5% compared to 34.5% in last year’s first quarter due to inventory reserves taken as a result of the COVID-19 pandemic. Retail revenue in the first quarter decreased 15.8% to 52.9 million US dollars compared to 62.8 million US dollars in the first quarter of the prior year, mainly driven by the closure in March of all the Company's retail stores outside of China. Retail gross margin increased to 59.8% in the first quarter of 2020 compared to 58.5% in the first quarter of the prior year due to a benefit recognized in connection with the modification of the company's loyalty program, partially offset by inventory reserves taken as a result of the COVID-19 pandemic.

Responding to COVID-19

In response to the COVID-19 pandemic, Steve Madden has taken some precautionary measures to maintain ample liquidity and financial flexibility such as to suspend share repurchases; to suspend the quarterly cash dividend; to significantly reduced payroll, non-essential operating expenses, capital expenditures and planned inventory receipts.