Strategic Brand Momentum and Portfolio Execution
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Performance was driven by disciplined execution across the brand portfolio, combining trend-right product assortments with high-impact marketing campaigns like 'Ask Steve'.
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The flagship Steve Madden brand saw exceptional growth in casuals, booties, and heels, which more than offset a trend-driven decline in the tall shaft boots category.
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Kurt Geiger's growth is normalizing toward a 'low double digits' pro forma annual rate following an exceptionally strong first quarter that saw 24% comp growth.
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Dolce Vita achieved record third-quarter results by successfully capitalizing on trending materials like suede and animal prints across both footwear and handbags.
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Betsey Johnson's revitalization was accelerated by tapping into the Y2K fashion revival and high-engagement collaborations, such as the Paris Hilton collection which sold out in two days.
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Wholesale revenue growth of 19.4% was significantly influenced by a normalization of shipment timing compared to the prior year's tariff-related disruptions.
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Management attributed gross margin expansion in the wholesale segment to strong underlying improvements, despite headwinds from higher freight expenses.
Updated Fiscal 2026 Outlook and Strategic Priorities
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Full-year revenue guidance was raised to a range of 12% to 13% growth, reflecting year-to-date momentum and sustained brand heat.
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Q4 wholesale revenue is projected to decline 6% to 7% as the business laps the unusual shipment timing shifts from the prior year.
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The company adjusted its Q4 tariff assumption to approximately 12.5%, down from a previous estimate of 15%, for products received during the period.
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Strategic expansion for Kurt Geiger includes increasing the Macy's shop-in-shop footprint to potentially 40 or 42 locations by spring 2027.
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Management aims to stabilize the private label business in 2027, targeting flat performance to 'stop the bleeding' after significant multi-year revenue declines.
Operational Dynamics and Risk Factors
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Inventory levels were reduced by 12.8% year-over-year, led by a 26% reduction in Kurt Geiger inventory to optimize stock positions.
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Direct-to-consumer margins faced pressure from deeper discounting required to liquidate seasonal sandal inventory and higher outbound freight costs.
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International comp sales were impacted by a 2% decrease, primarily attributed to the conflict in the Middle East affecting the GCC business.
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Approximately $12 million to $14 million in wholesale orders shifted from Q3 into Q4 due to typhoons in Asia and subsequent delivery delays.
Q&A Session Highlights
Wholesale shipment timing and Q4 revenue expectations
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Management explained that the 19.4% wholesale growth in Q3 will be followed by a decline in Q4 due to the comparison against last year's tariff-disrupted schedule.
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The branded wholesale business is expected to be up low double digits for the second half of the year in total.
Kurt Geiger growth normalization and concession performance
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The adjustment in Kurt Geiger guidance to 'low double digits' reflects a return to original expectations after a 'normalized' 6% comp in Q3.
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The brand's concessions business is currently performing at a lower operating margin than the core brand and has remained relatively flattish.
Private label turnaround strategy and 2027 goals
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The private label business is expected to be down mid-teens for 2026, a slight improvement from previous 'mid-to-high teens' estimates due to order timing.
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Management has not yet 'cracked the code' on a full turnaround but is focused on stabilizing the base to achieve flat growth next year.
Category trends and promotional environment in DTC
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While overall promotional days have decreased, deep markdowns were necessary in Q3 specifically to clear lagging spring sandal categories.
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Management identified tall shaft boots as a trend-driven laggard, while dress shoes, booties, and loafers continue to see strong consumer appetite.
