Steven Madden, Ltd.

Good day and thank you for standing by. Welcome to the Quarter 2, 2021 Steve Madden Limited Earnings Conference Call. At this time, our participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Danielle McCoy. Please go ahead.

Thanks, Misty, and good morning, everyone. Thank you for joining our second quarter 2021 earnings call and webcast. Before we begin, I'd like to remind you that during our call, we may make certain forward-looking statements as defined in the federal securities laws regarding our expectations or predictions about the future. Generally, these statements relate to rejections involving anticipated revenues, earnings, or other aspects of the company's operating results. Such statements may also include discussions involving the ongoing COVID-19 pandemic, including its current and expected impact on our business operations and results, as well as the company's plans to respond to such uncertain and dynamic events. Because these statements are based on current assumptions and expectations, they involve known and unknown risks, uncertainties, and factors not within the company's control. and as such, our actual performance and results may differ materially from these statements. Our annual report and other reports filed with the SEC from time to time include detailed discussions of the risks the company faces, and we urge you to refer to these. Any forward-looking statements represent our judgment as of the time of this call and cannot be relied upon as current after today's date. We disclaim any intent or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable law. The financial results discussed are on an adjusted basis, unless otherwise noted. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release. Joining the call today are Ed Rosenfeld, Chairman and CEO CEO, and Dean Mazzuzzi, CFO. With that, I'll turn the call over to Ed. Ed?

Thanks, Danielle, and good morning, everyone, and thank you for joining us to review Steve Madden's second quarter 2021 results. We're really excited about the strong and accelerated recovery we are seeing in our business. The outstanding, trend-right product assortments created by Steve and our design teams are driving strong consumer demand for our brands and Our owned and operated e-commerce business continues to have exceptional momentum. Our retail stores have rebounded sharply and are now comping well above pre-pandemic levels. And while our wholesale shipments remained below pre-pandemic levels in the quarter, our sell-through performance was robust, positioning us for strong improvement in that business going forward. Overall, our second quarter results significantly exceeded our expectations. with earnings slightly ahead of pre-COVID-19 second quarter 2019. Turning to our performance by segment, our retail business was the highlight of the quarter and the source of the outperformance versus our expectations. Overall, retail revenue increased 63% compared to the second quarter of 2019. Our digital commerce business was the primary driver as it accelerated once again, with revenue increasing 105% on top of 86% growth in the prior year period, including 119% growth in our Steve Madden global digital business on top of 85% growth last year. We continue to see strong returns on our increased investment in digital marketing, as well as tangible results from our ongoing efforts to add and optimize features and functionality on the site. Our brick-and-mortar business was also strong, On an open-only basis, our global brick-and-mortar comparable store sales were up 8% in the quarter compared to 2019. We achieved this revenue performance with significantly reduced levels of promotional activity in both digital and brick-and-mortar channels, which in turn drove segment gross margin up over 500 basis points compared to the comparable period in 2019 for the second consecutive quarter. We also continue to benefit from the cost savings measures we implemented over the last year, including rent savings from restructured leases. For the first six months of 2021, our retail segment has contributed $31.4 million in EBIT compared to an EBIT loss of $3.8 million in the first half of 2019. In our wholesale business, revenue in the quarter was, as expected, down to the comparable period in 2019. Our sell-through performance, however, was strong across shoes, accessories, and apparel. Our core Steve Madden women's footwear business had particularly outstanding sell-throughs, with success across a range of categories, including sandals, dress shoes, and sneakers. While the industry overall benefited from increased consumer demand and spending on fashion over this time period, Our performance at retail outpaced the competition, and our wholesale customers are reacting with increased purchases for fall. We expect strong sequential improvement in the back half in our wholesale business, with Q3 down low to mid-single digits to 2019 and Q4 returning to growth versus 2019. As we drive this accelerated recovery in our business results, we also continue to focus on advancing our diversity, equity, and inclusion and corporate social responsibility initiatives. In Q2, we expanded our partnership with the Fearless Fund, a venture fund which seeks to bridge the gap in venture capital funding for women of color founders. We established a new partnership with Howard University in which we'll work with the business school to reimagine its retail curriculum starting this fall. and we launched our first collection of Steve Madden Kids Adaptive Footwear, fashion-forward styles which were developed in partnership with children with disabilities and their families. In the coming weeks, we will be putting out our second annual sustainability report. I encourage all of you to check it out so you can see the progress we have made on our sustainability goals as well as our targets and roadmap for the future. Overall, we are very pleased with the progress we are making and the trends we are seeing in the business. The outstanding results in our retail segment and robust sell-through performance in wholesale demonstrate the health of our brands, the strength of our product assortments, and the momentum we have in digital channels. While we still face challenges due to COVID-19, including but not limited to continued supply chain disruption across the globe, we are confident that based on the strength of our brands, our business model, and our people, we are well-positioned to drive sustainable revenue and earnings growth and create value for our stakeholders over the long term. With that, I'll turn it over to Zeen to review our second quarter 2021 financial results in more detail and provide our fiscal year guidance.