Jefferies said Steve Madden is likely to face a more difficult path to growth as strain in its wholesale operations intensifies, with that channel representing about 70% of the shoe and accessories maker's revenue.
The brokerage noted that many retail partners are pushing back against proposed double-digit price increases. That resistance, Jefferies said, could make it harder for the company to deliver its next phase of top-line expansion and may prolong weakness in wholesale over several quarters, increasing the risk of additional downward revisions to revenue and earnings forecasts.
Reflecting these pressures, Jefferies adjusted investor expectations for 2026 earnings to roughly $2.20 per share, a reduction from prior estimates in the high-$2 range. The firm also signaled that consensus forecasts for both revenue and profit might remain overly optimistic given the likely duration of wholesale challenges.
Importantly, Jefferies differentiated between the company’s channels. The firm said the stress is concentrated in wholesale, not in direct-to-consumer operations. It reported no clear signs of product or brand deterioration, pointing out that sales trends in direct channels are healthy, characterized by strong sell-in activity and no identifiable assortment or styling problems.
However, Jefferies emphasized that the direct business is not yet large enough to make up for declining wholesale demand in the near term. As a result, healthy direct-channel performance is unlikely to fully counteract pressures arising in the wholesale segment.
The brokerage also highlighted the company’s 2023 acquisition of Almost Famous as a potential headwind for margins. While Jefferies acknowledged that the unit supports longer-term growth prospects, it warned that fixed costs associated with Almost Famous could suppress results if the company’s exposure to mass retail channels weakens.
Lastly, Jefferies expects Kurt Geiger to continue producing solid results, supported by brand momentum and expansion efforts. Even so, the contribution from Kurt Geiger remains relatively small compared with the core wholesale business and is unlikely to fully offset the broader challenges identified by the firm.