STEVEN MADDEN LTD
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
SHOO$39.50+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001628280-24-019938
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001628280-24-034229
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 93 current paragraphs.
59 unchanged; 20 reworded; 13 added; 0 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Selected Financial Information
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Consolidated:
Current report
Total revenue in the six months ended June 30, 2024 increased 18.3% to $1,075,934 compared to $909,136 in the same period of the prior year with increases in the Wholesale Accessories/Apparel, Wholesale Footwear, and Direct-to-Consumer segments. Gross profit was $441,944, or 41.1% of total revenue, as compared to $384,962, or 42.3% of total revenue, in the prior-year period. The decrease in gross profit as a percentage of total revenue was primarily driven by the impact of the Almost Famous acquisition as well as the mix shift to the private label footwear business. Gross profit in the 2024 period included $333 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses for the first six months of 2024 were $328,428, or 30.5% of total revenue, as compared to $294,411, or 32.4% of total revenue, in the first six months of the prior year. The decrease in operating expenses as a percentage of total revenue was primarily attributable to expense leverage on a higher revenue base. The first six months of 2024 operating expenses included an expense of $1,295 related to acquisition costs and the formation of joint ventures. The 2023 same period operating expenses included $1,676 of expense related to certain severances, termination benefits, and a corporate office relocation. In the 2024 period, we also recorded an expense of $8,200, due to the change in valuation of a contingent payment liability and a charge of $1,700 related to the impairment of an intangible. Income from operations increased to $103,616, or 9.6% of total revenue, as compared to income from operations of $90,551, or 10.0% of total revenue, in the prior-year period. The effective tax rate in the first six months of 2024 was 23.5% compared to 24.0% in the first six months of the prior year. Net income attributable to Steven Madden, Ltd. in the first six months of 2024 was $79,310 compared to $71,259 in the same period of 2023.
Current report
Wholesale Footwear Segment:
Current report
Revenue from the Wholesale Footwear segment in the first six months of 2024 accounted for $532,685, or 49.5% of total revenue, as compared to $517,229, or 56.9% of total revenue, in the first six months of 2023. Revenue increased 3.0% driven by growth in our private label business partially offset by softness in the branded business. Gross profit was $187,408, or 35.2% of Wholesale Footwear revenue, in the first six months of 2024 as compared to $186,567, or 36.1% of Wholesale Footwear revenue, in the first six months of 2023. The decrease in gross profit as a percentage of revenue was primarily due to higher penetration of our private label business. Operating expenses in the first six months of 2024 were $85,354, or 16.0% of Wholesale Footwear revenue, as compared to $80,785, or 15.6% of Wholesale Footwear revenue, in the first six months of the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue was primarily attributable to increases in payroll and related expenses. The first six months of 2024 operating expenses included an expense of $1,030 related to acquisition costs and the formation of joint ventures. Income from operations decreased to $102,054, or 19.2% of Wholesale Footwear revenue in the first six months of 2024 as compared to $105,782, or 20.5% of Wholesale Footwear revenue, in the same period of the prior year.
Current report
Wholesale Accessories/Apparel Segment:
Current report
Revenue from the Wholesale Accessories/Apparel segment in the first six months of 2024 accounted for $290,852, or 27.0% of total revenue, as compared to $159,540, or 17.5% of total revenue, in the first six months of 2023. Revenue increased 82.3% driven by the incremental revenue from the acquisition of Almost Famous, as well as strength in the Steve Madden handbag and apparel businesses. Gross profit was $93,594, or 32.2% of Wholesale Accessories/Apparel revenue, in the first six months of 2024 as compared to $53,224, or 33.4% of Wholesale Accessories/Apparel revenue, in the first six months of the prior year. The decrease in gross profit as a percentage of revenue was due to the impact of the Almost Famous acquisition. Gross profit in the 2024 period included $333 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses in the first six months of 2024 were $51,877, or 17.8% of Wholesale Accessories/Apparel revenue, as compared to $32,406, or 20.3% of Wholesale Accessories/Apparel revenue, in the same period of the prior year. The decrease in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was primarily attributable to expense leverage on a higher revenue base. In the 2024 period, we recorded an expense of $8,200, due to the change in valuation of a contingent payment liability. Income from operations for the Wholesale Accessories/Apparel segment in the first six months of 2024 was $33,517, or 11.5% of Wholesale Accessories/Apparel revenue, as compared to $20,818, or 13.0% of Wholesale Accessories/Apparel revenue, in the same period of the prior year.
Current report
Direct-to-Consumer Segment:
Current report
Licensing Segment:
Current report
Royalty income generated by the Licensing segment accounted for $3,658, or 0.4% of total revenue, in thefirst six months of 2024 compared to $4,562, or 0.5% of total revenue, in thefirst six months of 2023. Operating expenses decreased to $962 in the current period compared to $1,472 in the same period of the prior year. Income from the Licensing segment was $2,696 in the firstsix months of 2024 as compared to $3,090 in the same period last year.
Current report
Corporate:
Current report
Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These costs are primarily related to expenses associated with corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cyber security, and other shared services. Corporate operating expenses amounted to $47,716 or 4.4% of total revenue in the first six months of 2024 as compared to $45,221 or 5.0% of total revenue in the same period last year.
Reworded paragraphs (20)
Previous wording
The following discussion of our financial condition and results of operations for the three months ended March 31, 2024 should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The following discussion of our financial condition and results of operations for the three and six months ended June 30, 2024 should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
•our dependence on the retention and hiring of key personnel;
Current wording
•our dependence on the hiring and retention of key personnel;
Previous wording
Steven Madden, Ltd. and its subsidiaries design, source, and market fashion-forward branded and private label footwear, accessories, and apparel. We distribute our products in the wholesale channel through department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and other international markets through our joint ventures in Israel, South Africa, China, Taiwan, Malaysia, and the Middle East along with special distribution arrangements in certain European countries, North Africa, South and Central America, Australia, and various countries in Asia. In addition, our products are distributed through our direct-to-consumer channel within the United States, Canada, Mexico, and Europe, and our joint ventures in Israel, South Africa, China, Taiwan, and the Middle East.
Current wording
Steven Madden, Ltd. and its subsidiaries design, source, and market fashion-forward branded and private label footwear, accessories, and apparel. We distribute our products in the wholesale channel through department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and other international markets through our joint ventures in Israel, South Africa, China, Taiwan, Malaysia, Latin America, and the Middle East along with special distribution arrangements in certain European countries, North Africa, South and Central America, Australia, and various countries in Asia. In addition, our products are distributed through our direct-to-consumer channel within the United States, Canada, Mexico, and Europe, and our joint ventures in Israel, South Africa, China, Taiwan, Latin America, Southeastern Europe, and the Middle East.
Previous wording
We manage our operations through our operating divisions, which are presented as the following reportable segments: Wholesale Footwear, Wholesale Accessories/Apparel, Direct-to-Consumer, and Licensing. Our Wholesale Footwear segment designs, sources, and markets our brands, and sells our products to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and through our joint ventures, and international distributor network. Our Wholesale Accessories/Apparel segment designs, sources, and markets our brands, and sells our products to department stores, mass merchants, off-price retailers, online retailers, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and through our joint ventures, and international distributor network. Our Direct-to-Consumer segment consists of Steve Madden® and Dolce Vita® full-price retail stores, Steve Madden® outlet stores, Steve Madden® concessions in international markets, and our directly-operated digital e-commerce websites. We operate retail locations in regional malls and shopping centers, as well as high streets in major cities across the United States, Canada, Mexico, Europe, Israel, South Africa, Taiwan, China, and the Middle East. Our Licensing segment is engaged in the licensing of the Steve Madden® and Betsey Johnson® trademarks for use in the sale of select apparel, accessory, and home categories as well as various other non-core products. Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These costs are primarily related to expenses associated with corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cyber security, and other shared services.
Current wording
We manage our operations through our operating divisions, which are presented as the following reportable segments: Wholesale Footwear, Wholesale Accessories/Apparel, Direct-to-Consumer, and Licensing. Our Wholesale Footwear segment designs, sources, and markets our brands, and sells our products to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and through our joint ventures, and international distributor network. Our Wholesale Accessories/Apparel segment designs, sources, and markets our brands, and sells our products to department stores, mass merchants, off-price retailers, online retailers, specialty retailers, independent stores, and clubs throughout the United States, Canada, Mexico, and Europe, and through our joint ventures, and international distributor network. Our Direct-to-Consumer segment consists of Steve Madden® and Dolce Vita® full-price retail stores, Steve Madden® outlet stores, Steve Madden® concessions in international markets, and our directly-operated digital e-commerce websites. We operate retail locations in regional malls and shopping centers, as well as high streets in major cities across the United States, Canada, Mexico, Latin America, Europe, Israel, South Africa, Taiwan, China, and the Middle East. Our Licensing segment is engaged in the licensing of the Steve Madden® and Betsey Johnson® trademarks for use in the sale of select apparel, accessory, and home categories as well as various other non-core products. Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These costs are primarily related to expenses associated with corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cyber security, and other shared services.
Previous wording
Total revenue for the quarter ended March 31, 2024 increased 19.1% to $552,381 compared to $463,834 in the same period of last year. Net income attributable to Steven Madden, Ltd. was $43,934 in the first quarter of 2024 compared to $36,730 in the same period of last year. Our effective tax rate for the first quarter of 2024 decreased to 23.6% compared to 24.2% in the first quarter of last year. Diluted earnings per share was $0.60 per share on 72,865 diluted weighted average shares outstanding compared to diluted earnings per share of $0.48 per share on 75,855 diluted weighted average shares outstanding in the first quarter of last year.
Current wording
Total revenue for the quarter ended June 30, 2024 increased 17.6% to $523,553 compared to $445,302 in the same period of last year. Net income attributable to Steven Madden, Ltd. was $35,376 in the second quarter of 2024 compared to $34,529 in the same period of last year. Our effective tax rate for the second quarter of 2024 was 23.4% compared to 23.7% in the second quarter of last year. Diluted earnings per share were $0.49 per share on 72,004 diluted weighted average shares outstanding compared to diluted earnings per share of $0.46 per share on 74,883 diluted weighted average shares outstanding in the second quarter of last year.
Previous wording
Our inventory turnover (calculated on a trailing four quarter average) for the quarter ended March 31, 2024 was 5.7 compared to 4.9 times at March 31, 2023. Our total Company accounts receivable average collection days increased to 68 days in the first quarter of 2024 compared to 64 days in the first quarter of 2023. As of March 31, 2024, we had $143,057 in cash, cash equivalents, and short-term investments, no debt, and total stockholders’ equity of $843,607. Working capital was $474,782 as of March 31, 2024, compared to $510,791 as of March 31, 2023.
Current wording
Our inventory turnover (calculated on a trailing four quarter average) for the quarter ended June 30, 2024 was 5.7 compared to 5.2 times at June 30, 2023. Our total Company accounts receivable average collection days increased to 73 days in the second quarter of 2024 compared to 69 days in the second quarter of 2023. As of June 30, 2024, we had $192,218 in cash, cash equivalents, and short-term investments, no debt, and total stockholders’ equity of $832,356. Working capital was $454,178 as of June 30, 2024, compared to $510,257 as of June 30, 2023.
Previous wording
Total revenue for the three months ended March 31, 2024 increased 19.1% to $552,381 compared to $463,834 in the same period of the prior year, due to increases in the Wholesale Accessories/Apparel, Wholesale Footwear, and Direct-to-Consumer segments. Gross profit was $224,815, or 40.7% of total revenue, as compared to $195,092, or 42.1% of total revenue, in the prior-year period. The decrease in gross profit as a percentage of total revenue was primarily driven by a decrease in gross margin in the Wholesale Accessories/Apparel and Wholesale Footwear segments, partially offset by higher gross margin in the Direct-to-Consumer segment. Operating expenses in the first quarter of 2024 were $166,369, or 30.1% of total revenue, as compared to $148,581, or 32.0% of total revenue, in the first quarter of the prior year. The decrease in operating expenses as a percentage of total revenue was primarily attributable to expense leverage on a higher revenue base. The first quarter 2024 operating expenses included an expense of $1,650, due to the change in valuation of contingent consideration. In the 2024 period, we also recorded a charge of $1,700 related to the impairment of an intangible. The 2023 operating expenses included $1,181 of expense related to certain severances, termination benefits, and a corporate office relocation. Income from operations for the three months ended March 31, 2024 increased to $56,746, or 10.3% of total revenue, as compared to $46,511, or 10.0% of total revenue, in the prior-year period. The effective tax rate in the first quarter of 2024 was 23.6% compared to 24.2% in the first quarter of last year. Net income attributable to Steven Madden, Ltd. for the first quarter of 2024 was $43,934 compared to $36,730 in the first quarter of 2023.
Current wording
Total revenue for the three months ended June 30, 2024 increased 17.6% to $523,553 compared to $445,302 in the same period of the prior year, due to increases in the Wholesale Accessories/Apparel, Direct-to-Consumer, and Wholesale Footwear segments. Gross profit was $217,129, or 41.5% of total revenue, as compared to $189,870, or 42.6% of total revenue, in the prior-year period. Gross profit in the 2024 period included $126 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. The decrease in gross profit as a percentage of total revenue was driven by the impact of the Almost Famous acquisition. Operating expenses in the second quarter of 2024 were $163,709, or 31.3% of total revenue, as compared to $145,830, or 32.7% of total revenue, in the second quarter of the prior year. The decrease in operating expenses as a percentage of total revenue was primarily attributable to expense leverage on a higher revenue base. The second quarter 2024 operating expenses included $958 due to acquisition costs and the formation of joint ventures. The 2023 operating expenses included $495 of expense related to certain severances and termination benefits. During the second quarter 2024, we also recorded an expense of $6,550 due to the change in valuation of a contingent payment liability. Income from operations for the three months ended June 30, 2024 increased to $46,870, or 9.0% of total revenue, as compared to $44,040, or 9.9% of total revenue, in the prior-year period. The effective tax rate in the second quarter of 2024 was 23.4% compared to 23.7% in the second quarter of last year. Net income attributable to Steven Madden, Ltd. for the second quarter of 2024 was $35,376 compared to $34,529 in the second quarter of 2023.
Previous wording
Revenue from the Wholesale Footwear segment in the first quarter of 2024 accounted for $295,660, or 53.5% of total revenue, as compared to $282,321, or 60.9% of total revenue, in the first quarter of 2023. Wholesale Footwear revenue increased 4.7% compared to the same quarter of 2023 driven by sales growth in our private label business. Gross profit was $108,297, or 36.6% of Wholesale Footwear revenue, in the first quarter of 2024 as compared to $107,522, or 38.1% of Wholesale Footwear revenue, in the first quarter of 2023. The decrease in gross profit as a percentage of revenue was primarily due to a higher penetration of our private label business. Operating expenses in the first quarter of 2024 were $45,182, or 15.3% of Wholesale Footwear revenue, as compared to $45,466, or 16.1% of Wholesale Footwear revenue, in the first quarter of the prior year. The decrease in operating expenses as a percentage of Wholesale Footwear revenue was primarily attributable to expense leverage on a higher revenue base. Income from operations increased to $63,115, or 21.3% of Wholesale Footwear revenue, in the first quarter of 2024 as compared to $62,056, or 22.0% of Wholesale Footwear revenue in the first quarter of the prior year.
Current wording
Revenue from the Wholesale Footwear segment in the second quarter of 2024 accounted for $237,024, or 45.3% of total revenue, as compared to $234,908, or 52.8% of total revenue, in the second quarter of 2023. Wholesale Footwear revenue increased 0.9% compared to the same quarter of 2023 driven by growth in our private label business partially offset by softness in the branded business. Gross profit was $79,110, or 33.4% of Wholesale Footwear revenue, in the second quarter of 2024 as compared to $79,045, or 33.6% of Wholesale Footwear revenue, in the second quarter of 2023. The decrease in gross profit as a percentage of revenue was due to a higher penetration of our private label business. Operating expenses in the second quarter of 2024 were $40,171, or 16.9% of Wholesale Footwear revenue, as compared to $35,319, or 15.0% of Wholesale Footwear revenue, in the second quarter of the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue was primarily attributable to increases in payroll and related expenses. The second quarter 2024 operating expenses included an expense of $865 due to acquisition costs and formation of joint ventures. Income from operations decreased to $38,939, or 16.4% of Wholesale Footwear revenue, in the second quarter of 2024 as compared to $43,726, or 18.6% of Wholesale Footwear revenue in the second quarter of the prior year.
Previous wording
Revenue from the Wholesale Accessories/Apparel segment in the first quarter of 2024 accounted for $142,576, or 25.8% of total revenue, as compared to $79,816, or 17.2% of total revenue, in the first quarter of 2023. Wholesale Accessories/Apparel revenue increased 78.6% compared to the same quarter of 2023 driven by the incremental revenue from the acquisition of Almost Famous, as well as the strength in Steve Madden handbags. Gross profit was $45,150, or 31.7% of Wholesale Accessories/Apparel revenue, in the first quarter of 2024 as compared to $26,514, or 33.2% of Wholesale Accessories/Apparel revenue, in the first quarter of the prior year. The decrease in gross profit as a percentage of revenue was due to the impact of the Almost Famous acquisition partially offset by gross margin expansion in our organic business. Operating expenses in the first quarter of 2024 were $26,979, or 18.9% of Wholesale Accessories/Apparel revenue, as compared to $17,076, or 21.4% of Wholesale Accessories/Apparel revenue, in the first quarter of the prior year. The decrease in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was primarily attributable to expense leverage on a higher revenue base. The first quarter 2024 operating expenses included an expense of $1,650, due to the change in valuation of contingent consideration. Income from operations increased to $18,171, or 12.7% of Wholesale Accessories/Apparel revenue, in the first quarter of 2024, as compared to $9,438, or 11.8% of Wholesale Accessories/Apparel revenue in the first quarter of the prior year.
Current wording
Revenue from the Wholesale Accessories/Apparel segment in the second quarter of 2024 accounted for $148,276, or 28.3% of total revenue, as compared to $79,723, or 17.9% of total revenue, in the second quarter of 2023. Wholesale Accessories/Apparel revenue increased 86.0% compared to the same quarter of 2023 driven by the incremental revenue from the acquisition of Almost Famous, as well as strength in the Steve Madden handbag and apparel businesses. Gross profit was $48,444, or 32.7% of Wholesale Accessories/Apparel revenue, in the second quarter of 2024 as compared to $26,709, or 33.5% of Wholesale Accessories/Apparel revenue, in the second quarter of the prior year. The decrease in gross profit as a percentage of revenue was due to the impact of the Almost Famous acquisition partially offset by gross margin expansion in our organic business. Gross profit in the 2024 period included $126 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses in the second quarter of 2024 were $26,340, or 17.8% of Wholesale Accessories/Apparel revenue, as compared to $15,329, or 19.2% of Wholesale Accessories/Apparel revenue, in the second quarter of the prior year. The decrease in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was primarily attributable to expense leverage on a higher revenue base. During the second quarter 2024, we also recorded an expense of $6,550, due to the change in valuation of a contingent payment liability. Income from operations increased to $15,554, or 10.5% of Wholesale Accessories/Apparel revenue, in the second quarter of 2024, as compared to $11,380, or 14.3% of Wholesale Accessories/Apparel revenue in the second quarter of the prior year.
Previous wording
In the first quarter of 2024, revenue from the Direct-to-Consumer segment accounted for $112,331, or 20.3% of total revenue, as compared to $99,600, or 21.5% of total revenue, in the first quarter of 2023. Revenue increased 12.8% compared to the prior year period, driven by increases in both our brick-and-mortar and e-commerce businesses. As of March 31, 2024, we operated 253 brick-and-mortar stores, five e-commerce websites, and 25 concessions in international markets compared to 235 brick-and-mortar stores, five e-commerce websites, and 21 concessions in international markets as of March 31, 2023. Gross profit in the first quarter of 2024 was $69,554, or 61.9% of Direct-to-Consumer revenue, compared to $58,959, or 59.2% of Direct-to-Consumer revenue, in the first quarter of 2023. The increase in gross profit as a percentage of revenue was primarily due to a reduction in promotional activity. Operating expenses in the first quarter of 2024 were $70,079, or 62.4% of Direct-to-Consumer revenue, as compared to $63,206, or 63.5% of Direct-to-Consumer revenue, in the first quarter of 2023. The decrease in operating expenses as a percentage of revenue was primarily attributable to expense leverage on a higher revenue base. In the first quarter of 2024, we also recorded a charge of $1,700 related to an impairment of an intangible. In the first quarter of 2024, loss from operations for the Direct-to-Consumer segment was $2,225, or (2.0%) of Direct-to-Consumer revenue, as compared to loss from operations of $4,247, or (4.3%) of Direct-to-Consumer revenue, in the first quarter of the prior year.
Current wording
In the second quarter of 2024, revenue from the Direct-to-Consumer segment accounted for $136,409, or 26.1% of total revenue, as compared to $128,205, or 28.8% of total revenue, in the second quarter of 2023. Revenue increased 6.4% compared to the prior year period, driven primarily by increases in our brick-and-mortar stores. As of June 30, 2024, we operated 273 brick-and-mortar stores, five e-commerce websites, and 27 concessions in international markets compared to 242 brick-and-mortar stores, five e-commerce websites, and 22 concessions in international markets as of June 30, 2023. Gross profit in the second quarter of 2024 was $87,731, or 64.3% of Direct-to-Consumer revenue, compared to $81,650, or 63.7% of Direct-to-Consumer revenue, in the second quarter of 2023. The increase in gross profit as a percentage of revenue was primarily due to a reduction in promotional activity. Operating expenses in the second quarter of 2024 were $72,649, or 53.3% of Direct-to-Consumer revenue, as compared to $71,320, or 55.6% of Direct-to-Consumer revenue, in the second quarter of 2023. The decrease in operating expenses as a percentage of revenue was primarily attributable to expense leverage on a higher revenue base. In the second quarter of 2024, income from operations for the Direct-to-Consumer segment was $15,082, or 11.1% of Direct-to-Consumer revenue, as compared to $10,330, or 8.1% of Direct-to-Consumer revenue, in the second quarter of the prior year.
Previous wording
Royalty income generated by the Licensing segment accounted for $1,814, or 0.3% of total revenue, in the first quarter of 2024 compared to $2,097, or 0.5% of total revenue, in the first quarter of 2023. Operating expenses were $500 in the current period compared to $279 in the same period of the prior year. In the first quarter of 2024, income from operations for the Licensing segment was $1,314 as compared to $1,818 in the same period last year.
Current wording
Royalty income generated by the Licensing segment accounted for $1,844, or 0.3% of total revenue, in the second quarter of 2024 compared to $2,466, or 0.6% of total revenue, in the second quarter of 2023. Operating expenses were $462 in the current period compared to $1,195 in the same period of the prior year. In the second quarter of 2024, income from operations for the Licensing segment was $1,382 as compared to $1,271 in the same period last year.
Previous wording
Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These costs are primarily related to expenses associated with corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cyber security, and other shared services. Corporate operating expenses were $23,629, or 4.3% of total revenue, in the first quarter of 2024 as compared to $22,554, or 4.9% of total revenue, in the first quarter of 2023.
Current wording
Corporate does not constitute a reportable segment and includes costs not directly attributable to the segments. These costs are primarily related to expenses associated with corporate executives, corporate finance, corporate social responsibility, legal, human resources, information technology, cyber security, and other shared services. Corporate operating expenses were, $24,087, or 4.6% of total revenue, in the second quarter of 2024 as compared to $22,667, or 5.1% of total revenue, in the second quarter of 2023.
Previous wording
Our primary sources of liquidity are cash flows from operations, cash, cash equivalents and short-term investments. Cash, cash equivalents, and short-term investments totaled $143,057 and $219,813 at March 31, 2024 and December 31, 2023, respectively. Of the total cash, cash equivalents, and short-term investments as of March 31, 2024, $114,754, or approximately 80%, was held in our foreign subsidiaries, and of the total cash, cash equivalents, and short-term investments on December 31, 2023, $134,745, or approximately 61%, was held in our foreign subsidiaries.
Current wording
Our primary sources of liquidity are cash flows from operations, cash, cash equivalents, and short-term investments. Cash, cash equivalents, and short-term investments totaled $192,218 and $219,813 at June 30, 2024 and December 31, 2023, respectively. Of the total cash, cash equivalents, and short-term investments as of June 30, 2024, $139,842, or approximately 73%, was held in our foreign subsidiaries, and of the total cash, cash equivalents, and short-term investments on December 31, 2023, $134,745, or approximately 61%, was held in our foreign subsidiaries.
Previous wording
As of March 31, 2024, we had working capital of $474,782, cash and cash equivalents of $131,501, short-term investments of $11,556, no cash borrowing, and $505 in letters of credit outstanding unrelated to the Credit Agreement.
Current wording
As of June 30, 2024, we had working capital of $454,178, cash and cash equivalents of $180,457, short-term investments of $11,761, no cash borrowing, and $504 in letters of credit outstanding unrelated to the Credit Agreement.
Previous wording
Cash used in operations was $15,705 for the three months ended March 31, 2024, compared to $13,275 in the same period of the prior year. The increase in cash used in operations was primarily driven by unfavorable changes in receivables and inventories partially offset by favorable changes in net income and accounts payable.
Current wording
Cash provided by operations was $93,801 for the six months ended June 30, 2024, compared to $82,257 in the same period of the prior year. The increase in cash provided by operations was primarily driven by favorable changes in accounts payable and net income, partially offset by unfavorable changes in inventories and receivables.
Previous wording
Cash used in investing activities was $4,618 for the three months ended March 31, 2024, which primarily consisted of the acquisition of a hosiery business for $4,259, purchases of $790 in short-term investments offset by cash received of $4,084 from the maturities and sales of short-term investments. We also made capital expenditures of $3,979, principally for leasehold improvements, new stores, and systems enhancements.
Current wording
Cash used in investing activities was $10,185 for the six months ended June 30, 2024, which primarily consisted of purchases of $10,510 of short-term investments; capital expenditures of $9,272 for leasehold improvements, new stores, and systems enhancements; the acquisition of a hosiery business for $4,259 partially offset by $13,485 from the proceeds of sales of short-term investments.
Previous wording
During the three months ended March 31, 2024, net cash used in financing activities was $52,531, which primarily consisted of share repurchases and net settlements of stock awards of $37,337, as well as cash dividends paid of $15,416.
Current wording
During the six months ended June 30, 2024, net cash used in financing activities was $105,508, which primarily consisted of share repurchases and net settlements of stock awards of $75,549, as well as cash dividends paid of $30,708.
Previous wording
As of the date of this report, we have employment agreements with our Founder and Creative and Design Chief, Steven Madden, and certain executive officers, which provide for the payment of compensation aggregating to approximately $8,016 in the remainder of 2024, $10,368 in 2025, $9,396 in 2026, $8,589 in 2027, $8,549 in 2028, $7,942 in 2029, and $7,746 in each of the years 2030 and 2031. In addition, some of these employment agreements provide for incentive compensation based on various performance criteria and some provide for discretionary bonuses as well as other benefits, including stock-based compensation.
Current wording
As of the date of this report, we have employment agreements with our Founder and Creative and Design Chief, Steven Madden, and certain executive officers, which provide for the payment of compensation aggregating to approximately $5,344 through the remainder of 2024, $10,368 in 2025, $9,396 in 2026, $8,589 in 2027, $8,549 in 2028, $7,942 in 2029, and $7,746 in each of the years 2030 and 2031. In addition, some of these employment agreements provide for incentive compensation based on various performance criteria and some provide for discretionary bonuses as well as other benefits, including stock-based compensation.
Previous wording
Transition tax of $4,884 was the result of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). Excluded from the contractual obligations table above are long-term taxes payable of $238 as of March 31, 2024 primarily related to uncertain tax positions, for which we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond one year due to uncertainties in the timing of tax audit outcomes.
Current wording
Transition tax of $4,884 was the result of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). Excluded from the contractual obligations table above are long-term taxes payable of $238 as of June 30, 2024 primarily related to an uncertain tax position, for which we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond one year due to uncertainties in the timing and outcome of tax audits.
Previous wording
In addition to the commitments included in the Contractual Obligations table above, we have outstanding letters of credit of $505 outstanding as of March 31, 2024 related to the purchase of inventory. These letters of credit expire at various dates through 2030.
Current wording
In addition to the commitments included in the Contractual Obligations table above, we have outstanding letters of credit of $504 outstanding as of June 30, 2024 related to the purchase of inventory. These letters of credit expire at various dates through 2030.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In the first six months of 2024, revenue from the Direct-to-Consumer segment accounted for $248,739, or 23.1% of total revenue, as compared to $227,805, or 25.1% of total revenue, in the first six months of 2023. Revenue increased 9.2% driven by increases in both our brick-and-mortar and e-commerce businesses. Gross profit in the first six months of 2024 was $157,284, or 63.2% of Direct-to-Consumer revenue, compared to $140,609, or 61.7% of Direct-to-Consumer revenue, in the first six months of 2023. The increase in gross profit as a percentage of revenue was primarily due to a reduction in promotional activity. Operating expenses in the first six months of 2024 were $142,519, or 57.3% of Direct-to-Consumer revenue, as compared to $134,527, or 59.1% of Direct-to-Consumer revenue, in the first six months of 2023. The decrease in operating expenses as a percentage of revenue was primarily attributable to expense leverage on a higher revenue base. In the 2024 period, we also recorded a charge of $1,700 related to the impairment of an intangible. In the first six months of 2024, income from operations for the Direct-to-Consumer segment was $13,065, or 5.3% of Direct-to-Consumer revenue, as compared to $6,082, or 2.7% of Direct-to-Consumer revenue, in the same period last year.