Jefferies says Steve Madden growth faces pressure as wholesale headwinds build

Investing.com --Jefferies said Steve Madden may face a tougher growth path as pressure builds in its wholesale business, which accounts for about 70% of revenue, while resistance from retail partners to price increases weighs on near-term performance.

The brokerage said retailers are pushing back on double-digit price hikes, which could make it harder for the company to drive its next phase of growth. It warned that the pressure in wholesale could persist over multiple quarters, raising the risk of further cuts to revenue and earnings forecasts.

Jefferies now sees investor expectations for 2026 earnings closer to about $2.20 per share, down from the high-$2 range previously. It added that consensus estimates for both revenue and profit may still be too high given the likelihood that wholesale challenges will take time to ease.

The firm said the pressure is concentrated in wholesale rather than direct-to-consumer channels. It does not see signs of product or brand weakness, noting that sales trends in direct channels remain healthy, with strong sell-in activity and no clear issues in assortment or styling. Still, the direct business is not large enough to offset weaker wholesale demand in the near term.

Jefferies also flagged the 2023 acquisition of Almost Famous as a potential margin headwind. The unit supports longer-term growth, but fixed costs tied to the business could weigh on results if wholesale exposure to mass retail channels declines.

The firm expects Kurt Geiger to continue performing well, supported by brand strength and expansion, though its contribution remains smaller relative to the core wholesale business and is unlikely to fully offset broader pressures.

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