Steven Madden, Ltd.

Good day and thank you for standing by. Welcome to the Q3 2022 Steve Madden LTD Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Danielle McCoy. Please go ahead.

Thanks, Bella, and good morning, everyone. Thank you for joining our third quarter 2022 earnings call and webcast. Before we begin, I'd like to remind you that our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to materially differ from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our press release issued earlier today and filings we make with the SDC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. The financial results discussed on today's call 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 me today on the call is Ed Rosenfeld, Chairman and Chief Executive Officer, and Zine Mouzouzi, Chief Financial Officer. With that, I'll turn the call over to Ed.

Thanks, Danielle. Good morning, everyone, and thank you for joining us to review Steve Madden's third quarter 2022 results. We delivered solid results in the third quarter despite the challenging environment, with revenue increasing 5% and earnings in line with expectations. While macro pressures increased during the quarter, consumer demand for our brands and our products remains healthy, and our team remains steadfast in its focus on executing our strategy for long-term value creation. First and foremost, our top priority, as always, is creating trend right product assortments and getting them to market ahead of the competition. Historically, our consistent success in this regard has been driven by our proven formula, which combines our talented design teams led by Steve with our test and react strategy and industry leading speed to market capabilities. Over the last year and a half, our product teams have done an outstanding job of developing on trend merchandise assortments that have resonated with consumers. But they've had to do this while working much further in advance, as supply chain disruption has extended lead times and limited our ability to test and react in season. Now, we are seeing significant improvement in transit times, positioning us to get back to what we do best in 2023. This restores a critical competitive advantage for us, particularly in an uncertain environment where our wholesale customers will be looking to place fewer orders up front and chase more in season. We also continue to support our brands and products with increased investment in marketing and consumer engagement. An important part of our strategy is connecting our brands to culture through associations with celebrities and influencers that are relevant to our core consumers. Last month, for example, we launched a global brand campaign called Maddenwood, which featured Bella Porch, a singer and social media creator with over 92 million followers on TikTok, Lotto, a rapper and winner of the Best New Artist Award at the 2022 BET Awards, and Chloe Cherry, an actress from the cast of hit TV show Euphoria. By combining outstanding product with effective marketing, we are creating deeper connections with our consumers, which in turn is enabling our success with our four key business drivers, the first of which is driving our direct-to-consumer business, led by digital technology. while DTC revenue in the third quarter declined modestly compared to the prior year. If we compare to the third quarter of 2019, DTC revenue increased 56%, including 178% growth in e-commerce, demonstrating the exceptional progress we've made in this business since the pre-COVID period. Our second key business driver is expanding our business outside of footwear, where we are focused on our largest non-footwear category of handbags, as well as our emerging apparel business. In handbags, our Steve Madden business, which has more than doubled over the last five years, continued its strong momentum in the third quarter with a 19% revenue gain compared to the prior year. In apparel, revenue grew 52% as we successfully transitioned from the BB Dakota Steve Madden co-branded label to the Steve Madden brand for the fall season. Our third key driver is expanding our international business, International has been the fastest growing part of our business over the last few years, and we believe it represents our largest long-term growth opportunity going forward. Our outstanding momentum in international markets continued in the third quarter, as international revenue grew more than 50% from the prior year period for the fourth consecutive quarter. Finally, our fourth key driver is strengthening the U.S. wholesale footwear business that remains the core of our business. In the third quarter, U.S. wholesale footwear revenue increased 3% over last year. Revenue in our branded business grew more than 20%, led by strong gains in Steve Madden and Dolce Vita. This was partially offset by a significant decline in private label. Looking ahead, we remain confident in our market-leading positioning and long-term prospects in this channel. But in the near term, many of our wholesale customers have pulled back on orders as they prioritize inventory control. and we have adjusted our overall fiscal 2022 outlook accordingly, which Zine will go into in further detail in a little bit. As we execute all these initiatives, we also embrace the opportunity and the responsibility we have to create positive change for our people, planet, and communities, and as such, seek to embed corporate social responsibility and sustainability in everything we do. In the third quarter, we published our 2021 sustainability report, which outlines our Let's Get Real sustainability strategy and our company's approach to critical issues including climate change, diversity and inclusion, and post-consumer waste management. You can find the report on the sustainability section of stevemadden.com, and I encourage you all to check it out. Overall, we are confident in our strategy and pleased with the progress we are making on our key priorities despite the increasingly challenging environment. While we expect a macroeconomic backdrop to remain unpredictable in the coming quarters, we believe we are well positioned due to our strong brands, agile business model, and proven ability to navigate difficult market conditions. Looking now further, we are confident that our unique competitive advantages will enable us to drive sustainable growth and value creation over the long term. With that, I'll turn it over to Zine to review our third quarter financial results in more detail and provide our updated outlook for the year.