Steve Madden shares fell roughly 9% on Thursday following a downgrade from Jefferies, which moved the stock to an Underperform rating and lowered its price target to $30. The firm cited ongoing and persistent pressure in the company’s wholesale business as a central concern for both near-term revenue and margin performance.
Jefferies noted that about 70% of Steve Madden’s sales are generated through wholesale accounts. Several large retail partners - including Walmart, Target, and TJX - are reportedly resisting recent price increases, weighing on Steve Madden’s ability to pass through higher costs or maintain elevated price points.
In its research note, Jefferies said: "We are downgrading SHOO to Underperform, as we see mounting and persistent wholesale pressures that are not adequately reflected in consensus." The brokerage added that some retailers are bypassing traditional wholesalers by sourcing directly from factories or expanding private-label programs, developments that compress the company’s pricing power in its largest channel.
Jefferies adjusted several financial assumptions as a result. The firm lowered its 2026 wholesale revenue estimate by about $250 million from a base of $1.8 billion and trimmed its 2026 EPS forecast to $2 from roughly $2.40 consensus, pointing to slower order volumes and expected pricing concessions. With limited direct-to-consumer exposure, Jefferies said Steve Madden has few offsets to wholesale weakness.
To arrive at the $30 target, Jefferies applied a 14x multiple to its 2027 EPS estimate of $2.15. The brokerage also outlined a downside scenario in which deeper order reductions and further price concessions could push the stock toward $20.
Jefferies further commented: "We believe SHOO may ultimately need to roll back part of its pricing strategy to reaccelerate wholesale vols, which would pressure margins. With SHOO’s heavy reliance on wholesale and limited DTC exposure, the company has few levers to offset these pressures, suggesting several quarters of muted earnings momentum."
The downgrade highlights the sensitivity of companies with large wholesale footprints to shifts in retailer behavior, particularly when sizeable customers push back on pricing or alter sourcing strategies. For Steve Madden, where wholesale represents the dominant sales channel, these dynamics have prompted the brokerage to reduce near-term forecasts and lower its valuation multiple application in arriving at a revised target.
Key context and implications
- Wholesale concentration: Approximately 70% of Steve Madden’s sales come from wholesale relationships that are currently facing pricing pushback from major retailers.
- Analyst revisions: Jefferies cut its 2026 wholesale revenue projection by about $250 million from a $1.8 billion base and reduced 2026 EPS expectations to $2 versus a roughly $2.40 consensus.
- Valuation and downside: A 14x multiple on a 2027 EPS estimate of $2.15 yields the $30 target; a deeper downside scenario could see the stock approach $20.
Outlook
Jefferies expects earnings momentum to remain muted until wholesale ordering patterns and price points stabilize. The brokerage emphasized that, absent significant direct-to-consumer scale or other mitigating levers, Steve Madden could face several quarters of depressed earnings as it navigates order volatility and potential margin erosion from price concessions.