STEVEN MADDEN LTD

Previous 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.

Current wording

The following discussion of our financial condition and results of operations for the three and nine months ended September 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

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.

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, South Eastern Europe, 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

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.

Current wording

Total revenue for the quarter ended September 30, 2024 increased 13.0% to $624,675 compared to $552,732 in the same period of last year. Net income attributable to Steven Madden, Ltd. was $55,278 in the third quarter of 2024 compared to $64,413 in the same period of last year. Our effective tax rate for the third quarter of 2024 was 25.5% compared to 23.1% in the third quarter of last year. Diluted earnings per share were $0.77 per share on 71,569 diluted weighted average shares outstanding compared to diluted earnings per share of $0.87 per share on 74,071 diluted weighted average shares outstanding in the third quarter of last year.

Previous 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.

Current wording

Our inventory turnover (calculated on a trailing four quarter average) for the quarter ended September 30, 2024 was 5.5 compared to 5.4 times at September 30, 2023. Our total Company accounts receivable average collection days increased to 66 days in the third quarter of 2024 compared to 61 days in the third quarter of 2023. As of September 30, 2024, we had $150,478 in cash, cash equivalents, and short-term investments, no debt, and total stockholders’ equity of $860,066. Working capital was $491,880 as of September 30, 2024, compared to $521,823 as of September 30, 2023.

Previous 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.

Current wording

Total revenue for the three months ended September 30, 2024 increased 13.0% to $624,675 compared to $552,732 in the same period of the prior year, driven by increases in the Wholesale Accessories/Apparel and Direct-to-Consumer businesses. Gross profit was $259,544, or 41.5% of total revenue, as compared to $232,625, or 42.1% of total revenue, in the prior-year period. Gross profit in the 2024 period included $59 of expense related to 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 third quarter of 2024 were $178,915, or 28.6% of total revenue, as compared to $149,887, or 27.1% of total revenue, in the third quarter of the prior year. The increase in operating expenses as a percentage of total revenue was attributable to higher payroll-related expenses, our continued investment in marketing and a mix shift within our Direct-to-Consumer segment to e-commerce. In the third quarter of 2024, our operating expenses also included $3,199 due to a loss on the divestiture of a business and $1,480 due to acquisition costs and the formation of joint ventures. The 2023 operating expenses included $538 of expense related to dissolution of an entity in Asia and $84 of expense related to certain severances and termination benefits. During the third quarter 2024, we also recorded $8,635 related to the impairment of an intangible and a benefit of $2,584 due to the change in valuation of a contingent payment liability. Income from operations for the third quarter of 2024 decreased to $74,578, or 11.9% of total revenue, as compared to $82,738, or 15.0% of total revenue, in the prior-year period. The effective tax rate in the third quarter of 2024 was 25.5% compared to 23.1% in the third quarter of last year. Net income attributable to Steven Madden, Ltd. for the third quarter of 2024 was $55,278 compared to $64,413 in the third quarter of 2023.

Previous 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.

Current wording

Revenue from the Wholesale Footwear segment in the third quarter of 2024 accounted for $299,315, or 47.9% of total revenue, as compared to $306,058, or 55.4% of total revenue, in the third quarter of 2023. Wholesale Footwear revenue decreased 2.2% compared to the same quarter of 2023 driven by a decrease in demand in the branded business. Gross profit was $110,778, or 37.0% of Wholesale Footwear revenue, in the third quarter of 2024 as compared to $112,288, or 36.7% of Wholesale Footwear revenue, in the third quarter of 2023. Operating expenses in the third quarter of 2024 were $46,523, or 15.5% of Wholesale Footwear revenue, as compared to $43,997, or 14.4% of Wholesale Footwear revenue, in the third quarter of the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue was attributable to increases in payroll-related expenses. In the third quarter of 2024, operating expenses included an expense of $109 related to acquisition costs and the formation of joint ventures. The 2023 operating expenses included $2,712 of expense related to dissolution of an entity in Asia and $41 of expense related to certain severances and termination benefits. Income from operations decreased to $64,255, or 21.5% of Wholesale Footwear revenue, in the third quarter of 2024 as compared to $68,291, or 22.3% of Wholesale Footwear revenue in the third quarter of the prior year.

Previous 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.

Current wording

Revenue from the Wholesale Accessories/Apparel segment in the third quarter of 2024 accounted for $196,400, or 31.4% of total revenue, as compared to $127,395, or 23.0% of total revenue, in the third quarter of 2023. Wholesale Accessories/Apparel revenue increased 54.2% 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 business. Gross profit was $64,963, or 33.1% of Wholesale Accessories/Apparel revenue, in the third quarter of 2024 as compared to $43,366, or 34.0% of Wholesale Accessories/Apparel revenue, in the third 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. Gross profit in the 2024 period included $59 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses in the third quarter of 2024 were $28,251, or 14.4% of Wholesale Accessories/Apparel revenue, as compared to $19,202, or 15.1% of Wholesale Accessories/Apparel revenue, in the third quarter of the prior year. The decrease in operating expenses as a percentage of Wholesale Accessories/Apparel revenue was attributable to expense leverage on a higher revenue base. In the third quarter of 2024, operating expenses included an expense of $195 related to acquisition costs and the formation of joint ventures. The 2023 operating expenses included $43 of expense related to certain severances and termination benefits. During the third quarter 2024, we also recorded $8,635 related to an impairment of an intangible and a benefit of $2,584 due to the change in valuation of a contingent payment liability. Income from operations increased to $30,661, or 15.6% of Wholesale Accessories/Apparel revenue, in the third quarter of 2024, as compared to $24,164, or 19.0% of Wholesale Accessories/Apparel revenue in the third quarter of the prior year.

Previous 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.

Current wording

In the third quarter of 2024, revenue from the Direct-to-Consumer segment accounted for $125,455, or 20.1% of total revenue, as compared to $116,393, or 21.1% of total revenue, in the third quarter of 2023. Revenue increased 7.8% compared to the prior year period, driven by increases in our e-commerce and brick-and-mortar stores. As of September 30, 2024, we operated 282 brick-and-mortar stores, five e-commerce websites, and 67 concessions in international markets compared to 251 brick-and-mortar stores, five e-commerce websites, and 22 concessions in international markets as of September 30, 2023. Gross profit in the third quarter of 2024 was $80,298, or 64.0% of Direct-to-Consumer revenue, compared to $74,085, or 63.7% of Direct-to-Consumer revenue, in the third 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 third quarter of 2024 were $78,799, or 62.8% of Direct-to-Consumer revenue, as compared to $64,344, or 55.3% of Direct-to-Consumer revenue, in the third quarter of 2023. The increase in operating expenses as a percentage of revenue was mainly attributable to higher marketing expense and occupancy related costs. In the third quarter of 2024, operating expenses included $3,199 due to a loss on the divestiture of a business and an expense of $1,176 related to acquisition costs and the formation of joint ventures. In the same period of 2023, operating expenses included a benefit of $2,174 related to the dissolution of an entity in Asia. In the third quarter of 2024, income from operations for the Direct-to-Consumer segment was $1,499, or 1.2% of Direct-to-Consumer revenue, as compared to $9,741, or 8.4% of Direct-to-Consumer revenue, in the third quarter of the prior year.

Previous 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.

Current wording

Royalty income generated by the Licensing segment accounted for $3,505, or 0.6% of total revenue, in the third quarter of 2024 compared to $2,886, or 0.5% of total revenue, in the third quarter of 2023. Operating expenses were $277 in the current period compared to $729 in the same period of the prior year. In the third quarter of 2024, income from operations for the Licensing segment was $3,228 as compared to $2,157 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, $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.

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, $25,065, or 4.0% of total revenue, in the third quarter of 2024 as compared to $21,615, or 3.9% of total revenue, in the third quarter of 2023.

Previous wording

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 wording

Total revenue in the nine months ended September 30, 2024 increased 16.3% to $1,700,609 compared to $1,461,868 in the same period of the prior year with increases in the Wholesale Accessories/Apparel, Direct-to-Consumer, and Wholesale Footwear businesses. Gross profit was $701,488, or 41.2% of total revenue, as compared to $617,587, or 42.2% of total revenue, in the prior-year period. The decrease in gross profit as a percentage of total revenue was driven by the impact of the Almost Famous acquisition. Gross profit in the 2024 period included $393 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses for the first nine months of 2024 were $507,343, or 29.8% of total revenue, as compared to $444,298, or 30.4% of total revenue, in the first nine 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. In the first nine months of 2024, operating expenses included an expense of $3,199 related to a loss on the divestiture of a business, $2,776 related to acquisition costs and the formation of joint ventures, and $326 working capital adjustment related to the Almost Famous acquisition. The 2023 same period operating expenses included $1,760 of expense related to certain severances, termination benefits, a corporate office relocation, and $538 of expense related to the dissolution of an entity in Asia. In the 2024 period, we also recorded a charge of $10,335 related to the impairment of intangibles and an expense of $5,616 due to the change in valuation of a contingent payment liability. Income from operations increased to $178,194, or 10.5% of total revenue, as compared to income from operations of $173,289, or 11.9% of total revenue, in the prior-year period. The effective tax rate in the first nine months of 2024 was 24.3% compared to 23.6% in the first nine months of the prior year. Net income attributable to Steven Madden, Ltd. in the first nine months of 2024 was $134,589 compared to $135,673 in the same period of 2023.

Previous wording

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 wording

Revenue from the Wholesale Footwear segment in the first nine months of 2024 accounted for $832,000, or 48.9% of total revenue, as compared to $823,288, or 56.3% of total revenue, in the first nine months of 2023. Revenue increased 1.1% driven by growth in our private label business partially offset by decrease in demand in the branded business. Gross profit was $298,186, or 35.8% of Wholesale Footwear revenue, in the first nine months of 2024, as compared to $298,856, or 36.3% of Wholesale Footwear revenue, in the first nine 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 nine months of 2024 were $131,877, or 15.9% of Wholesale Footwear revenue, as compared to $124,784, or 15.2% of Wholesale Footwear revenue, in the first nine months of the prior year. The increase in operating expenses as a percentage of Wholesale Footwear revenue was attributable to increases in payroll-related expenses and marketing investment. In the first nine months of 2024, operating expenses included an expense of $109 related to acquisition costs and the formation of joint ventures. The 2023 same period operating expenses included $356 of expense related to certain severances, termination benefits, a corporate office relocation, and $2,712 of expense related to the dissolution of an entity in Asia. Income from operations decreased to $166,309, or 20.0% of Wholesale Footwear revenue in the first nine months of 2024 as compared to $174,072, or 21.1% of Wholesale Footwear revenue, in the same period of the prior year.

Previous wording

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 wording

Revenue from the Wholesale Accessories/Apparel segment in the first nine months of 2024 accounted for $487,252, or 28.7% of total revenue, as compared to $286,935, or 19.6% of total revenue, in the first nine months of 2023. Revenue increased 69.8% 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 $158,558, or 32.5% of Wholesale Accessories/Apparel revenue, in the first nine months of 2024 as compared to $96,590, or 33.7% of Wholesale Accessories/Apparel revenue, in the first nine 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 $393 of expense in connection with the purchase accounting fair value adjustment of inventory from acquired businesses. Operating expenses in the first nine months of 2024 were $80,129, or 16.4% of Wholesale Accessories/Apparel revenue, as compared to $51,607, or 18.0% 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. The first nine months of 2024 operating expenses included an expense of $398 related to acquisition costs and the formation of joint ventures and $326 of working capital adjustment related to the Almost Famous acquisition. The 2023 same period operating expenses included $481 of expense related to certain severances, termination benefits, and a corporate office relocation. In the 2024 period, we also recorded a charge of $8,635 related to the impairment of an intangible and an expense of $5,616, due to the change in valuation of a contingent payment liability. Income from operations for the Wholesale Accessories/Apparel segment in the first nine months of 2024 was $64,178, or 13.2% of Wholesale Accessories/Apparel revenue, as compared to $44,983, or 15.7% of Wholesale Accessories/Apparel revenue, in the same period of the prior year.

Previous wording

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.

Current wording

In the first nine months of 2024, revenue from the Direct-to-Consumer segment accounted for $374,194, or 22.0% of total revenue, as compared to $344,197, or 23.5% of total revenue, in the first nine months of 2023. Revenue increased 8.7% driven by increases in both our brick-and-mortar and e-commerce businesses. Gross profit in the first nine months of 2024 was $237,581, or 63.5% of Direct-to-Consumer revenue, compared to $214,693, or 62.4% of Direct-to-Consumer revenue, in the first nine 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 nine months of 2024 were $221,317, or 59.1% of Direct-to-Consumer revenue, as compared to $198,870, or 57.8% of Direct-to-Consumer revenue, in the first nine months of 2023. The increase in operating expenses as a percentage of revenue was attributable to higher marketing expense and occupancy related costs, partially offset by savings in logistics and fulfillment expenses. The first nine months of 2024 operating expenses also included an expense of $3,199 related to a loss on the divestiture of a business and $2,268 related to acquisition costs and the formation of joint ventures. In the same period of 2023, operating expenses included $259 of expense related to certain severances, termination benefits, a corporate office relocation, and a benefit of $2,174 related to the dissolution of an entity in Asia. In the 2024 period, we also recorded a charge of $1,700 related to the impairment of an intangible. In the first nine months of 2024, income from operations for the Direct-to-Consumer segment was $14,564, or 3.9% of Direct-to-Consumer revenue, as compared to $15,823, or 4.6% of Direct-to-Consumer revenue, in the same period last year.

Previous wording

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 wording

Royalty income generated by the Licensing segment accounted for $7,163, or 0.4% of total revenue, in thefirst nine months of 2024 compared to $7,448, or 0.5% of total revenue, in thefirst nine months of 2023. Operating expenses decreased to $1,239 in the current period compared to $2,201 in the same period of the prior year. Income from the Licensing segment was $5,924 in the first nine months of 2024, as compared to $5,247 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 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.

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 amounted to $72,781 or 4.3% of total revenue in the first nine months of 2024 as compared to $66,836 or 4.6% of total revenue in the same period last year.

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 $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.

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 $150,478 and $219,813 at September 30, 2024 and December 31, 2023, respectively. Of the total cash, cash equivalents, and short-term investments as of September 30, 2024, $104,674, or approximately 70%, 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 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.

Current wording

As of September 30, 2024, we had working capital of $491,880, cash and cash equivalents of $139,414, short-term investments of $11,064, no cash borrowing, and $504 in letters of credit outstanding unrelated to the Credit Agreement.

Previous 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.

Current wording

Cash provided by operations was $94,245 for the nine months ended September 30, 2024, compared to $77,756 in the same period of the prior year. The increase in cash provided by operations, as presented in the statement of cash flow, was primarily driven by favorable changes in accounts payable, impairment of intangibles, and net income, partially offset by unfavorable changes in inventories and receivables.

Previous 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.

Current wording

Cash used in investing activities was $16,715 for the nine months ended September 30, 2024, which primarily consisted of purchases of $12,840 of short-term investments; capital expenditures of $16,642 for leasehold improvements, new stores, and systems enhancements; the acquisition of a hosiery business for $4,259 partially offset by $16,654 from the proceeds of sales of short-term investments.

Previous 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.

Current wording

During the nine months ended September 30, 2024, net cash used in financing activities was $140,582, which primarily consisted of share repurchases and net settlements of stock awards of $95,788, as well as cash dividends paid of $45,880.

Previous wording

Substantially all our products are produced by independent manufacturers at overseas locations, the majority of which are located in China, with a growing percentage located in Cambodia, Mexico, Vietnam, India, Italy, Brazil, Tunisia, and some other European and Asian countries. We have not entered into any long-term manufacturing or supply contracts with any of these foreign manufacturers. We believe that a sufficient number of alternative sources exist outside of the United States for the manufacture of our products. Purchases are made primarily in United States dollars.

Current wording

Substantially all our products are produced by independent manufacturers at overseas locations, the majority of which are located in China, with a growing percentage located in Cambodia, Mexico, Vietnam, India, Italy, Brazil, Tunisia, and various other European and Asian countries. We have not entered into any long-term manufacturing or supply contracts with any of these foreign manufacturers. We believe that a sufficient number of alternative sources exist outside of the United States for the manufacture of our products. Purchases are made primarily in United States dollars.

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 $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.

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 $2,672 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.