Last Update 04 Dec 25

SHOO: Margin Recovery And Inventory Discipline Will Support Future Earnings Power

Analysts have nudged their average price target on Steven Madden modestly higher to $43, citing a series of upgrades and target raises into the low to mid $40s as they gain confidence in margin recovery, faster inventory turns, and the company's longer term earnings power.

Analyst Commentary

Bullish analysts highlight that the recent wave of upgrades and target increases reflects growing conviction that Steven Madden is in the early stages of a multi year earnings recovery, supported by improving profitability metrics and operational execution.

Given the stock is still trading at what they view as a discounted multiple on 2026 estimates, they argue that the current valuation does not fully capture the company’s normalized earnings power or the benefits of recent strategic initiatives.

Bullish Takeaways

Bullish analysts see the move to higher price targets in the low to mid $40s as consistent with a view that the stock is undervalued relative to its potential to deliver more than $4 in earnings power over time.
Improving margin trajectory, including expectations for EBIT margins to recover from around 6 percent toward an 11 to 12 percent range, is cited as a key driver of upside to current profit forecasts.
Faster inventory turns and tighter cost discipline are viewed as evidence of stronger execution, which should support more stable earnings and justify a higher earnings multiple.
The continued integration and margin expansion opportunity at acquired brands, such as moving Kurt Geiger toward mid teens margins, is seen as an incremental growth lever that is not fully reflected in current valuation.

Bearish Takeaways

More cautious analysts point to the stock’s rebound from its lows and note that near term upside could be limited if macro headwinds pressure discretionary spending or delay the expected margin recovery.
There is concern that the path back to double digit EBIT margins may take longer than modeled if input costs, tariffs, or promotional intensity remain elevated, which would challenge the more optimistic earnings scenarios.
Some view the reliance on multiple expansion as a key component of the bull case, warning that any disappointment versus 2026 estimates could compress the current mid teens earnings multiple.
Execution risk around integrating and scaling acquired brands, while a source of potential upside, is also seen as a variable that could weigh on profitability if synergies do not materialize as planned.

What's in the News

Issued fourth quarter 2025 guidance calling for revenue growth of 27 percent to 30 percent year over year and GAAP diluted EPS of $0.30 to $0.35, indicating a sharp acceleration compared with 2024. (Corporate Guidance)
Reported no share repurchases in the July 1 to September 30, 2025 tranche, and confirmed completion of the long running buyback program launched in 2005, retiring 37,152,860 shares for $1,290.53 million in total. (Buyback Tranche Update)
Total repurchased shares under the completed authorization represent 42.05 percent of the company’s outstanding share base over the life of the program, reducing share count and increasing per share earnings. (Buyback Tranche Update)

Valuation Changes

Fair Value: Unchanged at $43.75 per share, indicating no adjustment to the modeled intrinsic value.
Discount Rate: Fallen slightly from 9.11 percent to approximately 9.08 percent, reflecting a modestly lower perceived risk profile.
Revenue Growth: Effectively unchanged at about 11.25 percent, signaling stable long term top line growth expectations.
Net Profit Margin: Stable at roughly 11.15 percent, with no meaningful revision to long run profitability assumptions.
Future P/E: Edged down marginally from 11.44x to about 11.43x, suggesting a slightly lower valuation multiple applied to forward earnings.

Strong digital and international growth, strategic focus on younger consumers, and e-commerce expansion are driving higher margins and diversified revenue streams.
Supply chain diversification, vertical integration, and the Kurt Geiger acquisition enhance cost efficiency, margin stability, and global brand scaling potential.
Ongoing tariff uncertainty, sourcing concentration, and inventory risks threaten margin stability, earnings growth, and a sustainable recovery in the face of volatile consumer demand.

Catalysts

About Steven Madden

Designs, sources, and markets fashion-forward branded and private label footwear, accessories, and apparel in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Strong double-digit digital growth-especially in the U.S. for both Steve Madden and newly acquired Kurt Geiger-alongside increased marketing focus on Gen Z/millennial consumers and expanded e-commerce investments, should enable faster revenue acceleration and higher margin mix as direct-to-consumer channels continue to outpace wholesale.
Expansion of international business, evidenced by high single-digit to double-digit constant currency growth across EMEA, APAC, and Americas outside the U.S., and plans to scale Kurt Geiger globally through the Steve Madden network, positions the company to benefit from a rising global middle class and geographically diversified revenue, supporting top-line growth.
Early consumer acceptance of selective price increases (~10% on average, higher for new fashion and Kurt Geiger), combined with a focus on trending categories like boots and dress shoes, signals potential for margin recovery and higher average selling prices as macro/tariff headwinds abate.
Vertical integration efforts and ongoing supply chain diversification away from China (expecting U.S. imports sourced from China to drop from 71% to 30% YoY) provide a pathway to improve gross margin stability and working capital management, supporting future earnings recovery once tariff disruptions stabilize.
Kurt Geiger integration creates meaningful synergies, with opportunities to scale the brand via Steve Madden's distribution in the U.S. and globally, leverage digital momentum, and unlock cost efficiencies-potentially accelerating revenue growth, portfolio diversification, and net margin expansion over the medium to long term.

Steven Madden Earnings and Revenue Growth

Steven Madden Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Steven Madden's revenue will grow by 10.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.9% today to 8.5% in 3 years time.
Analysts expect earnings to reach $266.9 million (and earnings per share of $3.11) by about September 2028, up from $91.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.1x on those 2028 earnings, down from 24.2x today. This future PE is lower than the current PE for the US Luxury industry at 19.8x.
Analysts expect the number of shares outstanding to grow by 0.64% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.0%, as per the Simply Wall St company report.

Steven Madden Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged and uncertain tariff regimes on imports, especially from China and other key sourcing countries like Brazil, create ongoing pressure on gross margins, increase landed costs, and disrupt both wholesale and DTC inventory flows, raising the risk of persistent margin compression and earnings volatility.
Heavy reliance on value-priced wholesale channels (mass and off-price), which experienced significant order cancellations (accounting for 95% of the wholesale revenue shortfall), exposes the company to wholesale customer caution and limited pricing power, constraining top-line revenue growth and margin recovery if consumer discretionary spending in these segments remains depressed.
Difficulty in swiftly diversifying sourcing away from China and adapting to shifting tariff landscapes in other countries (e.g., Brazil introducing new tariffs), increases operational complexity and raises the risk of continued supply chain disruptions, delayed deliveries, and increased cost of goods sold, all of which can dampen earnings and net margins.
Elevated inventory levels (up significantly due to recent acquisition and tariff impacts), along with pressure from fast-changing fashion cycles and uncertain consumer response to price increases, heighten the risk of inventory obsolescence, higher markdowns, and negative impact on net income and return on capital.
Growing operating expenses and lack of near-term guidance for margin recapture-compounded by integration risks with the Kurt Geiger acquisition and potentially lower near-term EBIT margins due to tariffs-could constrain sustainable earnings growth and challenge the achievement of double-digit operating margins in the foreseeable future.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $28.125 for Steven Madden based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $34.0, and the most bearish reporting a price target of just $24.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.1 billion, earnings will come to $266.9 million, and it would be trading on a PE ratio of 10.1x, assuming you use a discount rate of 9.0%.
Given the current share price of $30.28, the analyst price target of $28.12 is 7.7% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Boost Steven Madden Price Targets on Margin Recovery and Strong Growth Outlook