Q1 2022 Steven Madden Ltd Earnings Call
Yeah.
Good day, and thank you for standing by and welcome to the first quarter, Steve Madden L. T. D earnings Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone please be advised that today's conference is.
Being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference to Danielle Mccoy Vice President of corporate development and Investor Relations. Please go ahead.
Thanks, Noah and good morning, everyone. Thank you for joining our first quarter 2022 earnings call and webcast before.
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.
Forward looking statements are subject to risks that could cause actual results to Mr.
He really 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 S E C.
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.
Reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release.
The call today are Ed Rosenfeld, Chairman and Chief Executive Officer, and Zane was he was the 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 first quarter 2022 results.
Before I begin I would like to acknowledge the devastating war in Ukraine, and the heartbreaking humanitarian crisis, we are seeing in the region.
Steve Madden and provided over $500000 in assistance for the relief effort through cash donations from the Steve Madden Foundation, as well as donations and footwear clothing blankets and accessories.
We'll continue to look for ways to help and stand alongside the global community, calling for an immediate end to the war.
Now moving on to our first quarter results.
We got off to an outstanding start to the year delivering the highest quarterly earnings in our history in the first quarter.
Q1 revenue increased 55% and diluted EPS increased 180% compared to the prior year.
Overall these results reflect the strength of our strategy and our team's execution, we are winning with product and supporting that great product with effective marketing and that combination is driving closer connections with our consumers and increasing brand relevance, particularly for our two largest brands, Steve Madden Dolce Vita.
That in turn is enabling success with each of our four key business drivers first driving our direct to consumer business led by digital.
DTC revenue grew over 60% in the quarter.
Second expanding in categories outside of footwear handbags in apparel, our branded handbag business increased more than 50% and our apparel revenue was up more than 100% in Q1.
Third growing in international markets, our international revenue increased over 60% in the quarter.
And fourth strengthening our key our core U S wholesale footwear business that business also grew over 60% in Q1.
So across the board we are executing on our key strategic initiatives and seeing the results and we are confident that our continued focus on these initiatives will enable us to continue to drive top and bottomline growth going forward.
So turning to our performance by segment in Q1.
Our wholesale footwear segment revenue increased 60% compared to the prior year.
The Steve Madden brand drove the majority of the growth with strong gains strong gains excuse me across Steve Madden Women's men's and kids as well as Madden girl.
Dolce Vita was also outstanding with revenue up over 100% to last year is that brands momentum continues to accelerate.
In international markets, we had triple digit percentage increases in Canada, and Mexico, and another strong quarter of growth in Europe .
In our wholesale accessories, and apparel segment revenue increased 37% compared to the prior year growth. In this segment was driven primarily by strong gains in Steve Madden handbags, which was up more than 60% to the prior year, and BB Dakota, Steve Madden apparel, which more than doubled compared to the year ago period.
Yeah.
And in our direct to consumer segment revenue increased 61% versus the prior year period.
E Commerce continued to account for the majority of our DTC revenue and E com revenue increased 57% compared to last year.
And mortar revenue increased 64% year over year.
Overall, we are seeing robust consumer demand for our brands and strong performance across channels product categories and geographies. Our strategic initiatives are paying dividends and we are confident that we are well positioned to deliver sustainable growth for years to come.
So now I will turn it over to Zane to review, our first quarter financial results in more detail and provide an update to our outlook for 2022.
Thanks, Ed and good morning, everyone.
Our consolidated revenue in the first quarter was $559 7 million, a 55% increase compared to 2021.
34, 6% increase versus 2019.
Our wholesale revenue was $449 million up 54, 1% compared to the prior year and up.
Up 29% compared to 2019.
Wholesale footwear revenue was $346 7 million, a 59, 9% increase from 2021, and a 25, 4% increase from 2019.
These results were primarily driven by strong performance in our flagship brands, Steve Madden as well as in Dolce Vita and Betsey Johnson.
Q1 revenue also benefited from a pull forward of orders are some wholesale customers elected to frontload deliveries.
Wholesale accessories, and apparel revenue was $102 3 million.
Up 37, 1% to last year and up 43% for 2019.
These results were primarily driven by a strong quarter in Steve Madden handbag, which grew 59% compared to 2021 and 70% compared to 2019.
Due to some acceleration of handbag shipments from Q2.
The apparel business also saw significant strength growing triple digits compared to last year.
And our direct to consumer segment revenue was $108 3 million.
A 65% increase compared to 2021, and a 72, 4% increase compared to 2019.
E Commerce revenue increased 57, 5% compared to last year, and 244% versus 2019, reflecting strong performance in the Steve Madden, Dolce Vita and Betsey Johnson and digital businesses.
Brick and motor revenue increased 64, 1% to last year or 52% on a comp store basis.
Comparing to 2019 brick and mortar revenue was up 10, 4% or 13% on a comp basis.
We ended the quarter with 213 brick and motor retail stores, including 66 outlets as well as six E Commerce websites and 19 company operated concessions in international markets.
Turning to our licensee on first of all segments.
Our licensing royalty income was $1 6 million in the quarter compared to $1 5 million last year and $2 5 million in 2019.
First cost Commission income was <unk> $8 million in the quarter compared to zero point $6 million last year and $2 4 million in 2019.
Consolidated gross margin was 47% in the quarter expanded 220 basis points from the prior year.
Wholesale gross margin was 35, 2%, a 290 basis point improvement compared to last year, driven by an increase in wholesale footwear.
Direct to consumer gross margin was 62, 3% compared to 63, 5% last year, driven primarily by freight freight pressure.
Operating expenses were $133 5 million in the quarter compared to $103 5 million last year.
As a percentage of revenue operating expenses were 23, 8% in the quarter compared to 28, 7% last year, reflecting expense leverage on the increased revenue and our continued discipline around expense management.
Operating income for the quarter totaled $94 4 million.
Or 16, 9% of revenue.
Up from $35 6 million or nine 9% of revenue in last year, and $45 1 million or 10, 8% of revenue in 2019.
Our effective tax rate for the quarter was 22, 3% compared to 21, 1% in 2021.
Finally, net income attributable Steve Madden Ltd for the quarter was $73 4 million or.
92 cents per diluted share.
$26 9 million or <unk> 33 per diluted share in 2021.
And $35 1 million or 42 cents per diluted share in 2019.
Moving to the balance sheet, our financial Foundation remains very strong as of March 31, 2022, we had $182 million of cash cash equivalents and short term investments and no debt.
Inventory totaled $233 $4 million compared to $106 6 million last year.
Inventory continues to be higher than historical levels due to our need to place production orders earlier due to the supply chain disruption and longer transit lead times.
Remain comfortable with the amount and the content of our inventory and our ability to meet our customer ship windows.
Our capex in the quarter was $3 $6 million.
During the quarter, we repurchased $42 $4 million of the company's common stock, which includes shares acquired through the net settlement of employee stock Awards.
The company's board of directors approved a quarterly cash dividend of <unk> 21 per share.
Dividend will be payable on June 24, 2022 to stockholders of record as of the close of business on June 13 2022.
Turning to our outlook.
Based on the strong start to the year, we are raising our revenue and earnings per share guidance. We now expect revenue to increase 13% to 16% compared to 2021 and.
And we expect diluted EPS to be in the range of $2 95 to $3.
Now I would like to turn the call over to the operator for questions Norma.
Thank you ladies and gentlemen at this time if you have a question. Please press star one on your touch tone telephone.
My question has been answered or you wish to remove yourself from the queue. Please press the pound key please standby, while we compile the Q&A roster.
And again, ladies and gentlemen that is star one to ask a question.
Our first question comes from.
Apologies with Citi. Your line is now open.
Hey, everyone. This Brandon Cheatham on for Paul. Thanks for taking my question I was wondering if you could talk a little bit about recent supply chain developments have you seen any changes from recent world events.
What are you expecting near term on the.
Supply chain front.
Yeah good morning.
We really have not seen any material change to our to.
The supply chain, we're still experiencing.
Extended lead times in transit times.
Still experiencing quite a bit of pressure on our on freight.
If anything I think the freight pressure has gotten incrementally a little worse since the last time, we were on the on the call are at least in terms of the impact to our forecast for the year, but overall no no material change as of now.
I appreciate that.
Can you talk a little bit about the it sounds like wholesale pulled forward. Some deliveries was that hopeful for <unk> and you think it pulled from.
Maybe in the second quarter.
Yes, there was definitely a.
Change in timing of deliveries Q1 versus Q2 compared to what we are.
The pattern historically, so you will see the Q2 wholesale revenue growth decelerate, a little bit although it will still be still be strongly up by 54% in wholesale in Q1 versus last year I think for Q2, you should be thinking more around high thirty's.
Thanks, that's super helpful and.
One last one for me.
Can you talk about price increases for the second half.
What are you seeing on the cost side and expectations for the second half on that product. Thanks.
Sure.
Yeah, we continue to see.
Pressure on our cost there is some pressure on F O b cost based on what medium factory costs mean based on what's going on with both labor and materials.
And then of course, there's also quite a bit of pressure that we continue to see from freight.
So.
And the good news is we have we have.
Been raising prices and.
And for the most part feel very good about.
About customers' acceptance of those prices, particularly when we have newness, where we're seeing that the customers are not are not pushing back on the price increases.
If the if the products are.
What we would call L Y products last year type products, there may be a little bit more resistance, but anything new.
We're seeing the customer willing to to pay.
So for the most part we're offsetting those.
Those pressures.
With the price increases.
Got it.
Thanks, very much and good luck.
Thank you.
Hugh.
Our next question comes from Jay sole with UBS. Your line is now open.
Great. Thank you so much.
Maybe my question is just on the guidance for the full year, how do you think about it.
Adjusting the guidance given you beat consensus by <unk> 41 in Q1, you are raising the midpoint of the guide by about 17 cents for the full year was there something that you're seeing the environment that that makes you think the back half of the year won't be as strong as you thought previously or is it sort of you know.
This was your plan for Q1 and sort of everything is sort of a little.
Better than Q1, but just the street had under modeled it how do you think about it.
Yeah. It's a good question we definitely.
We're not aligned are the street was not aligned with how we were looking at Q1, so our internal.
<unk> forecast.
It's about 25.
Had of consensus for Q1.
So you talked about I think a 41 scent bead and about half of that.
Just accounted for that.
The difference in how the street was looking at it versus our internal forecast. So we did obviously come in you know another 20 or so ahead of our internal forecast.
And as you said, we're raising the full year 17 cents keep in mind.
Part of that increase.
Or beat to our internal forecast was a little bit of pull forward from Q2. So essentially what we've done is taken what we'd be into Q1 and and roll that forward and not changed in the back nine months of the year.
Alright got it and then maybe if I could ask just another question on the quarter. It seems like there was you know not just strong trend right product, but a lot of great execution like on social media with marketing can you just talk about some of the successes that you've had in the quarter, which maybe helps amplify.
The growth that you had in the business.
Maybe talk about what you expect to see as we go forward into Q2 and the rest of the year.
Yeah look I feel very good about how the how the teams executing.
And that goes for Steve Madden It goes for Dolce Vita because for some of our smaller brands like Betsey Johnson.
For us.
Always starts with product and and the team has done a great job of.
Of creating trend right products that are resonating with the consumers and so that's I think that's where it starts.
But as you point out we also important.
An important part of our strategy is to support that great product with that with effective marketing.
And I think that's an area, where we've been raising our game over the last few years, particularly in the digital marketing front.
And all the work that we do in particular to drive our owned and operated ecommerce business isn't I think youre seeing that seeing the results of that not only in Steve Madden, but.
Also tremendous success for instance, in Dolce Vita again, a smaller brand, but betsey Johnson is owned and operated ecommerce is growing rapidly.
So feel good about the execution on that front and we're going to continue to lean into those initiatives.
Okay. Thank you so much.
Thank you. Our next question comes from Tom Nick <unk> with Wedbush. Your line is open.
Hey, good morning, guys. Thanks for taking my question.
I wanted to ask about the gross margin.
You had a pretty.
Pretty strong increase.
The wholesale gross margin.
Despite.
Freight costs being being really really elevated.
How were you able to do that when.
Most of the other brands out there are seeing a lot of margin pressure from freight.
Yeah, we saw some nice improvement, particularly in the wholesale it really driven by the wholesale footwear business and it was really.
It was.
Nice to see was it was broad based so we were up in.
In the branded business, we were up in.
In the private label business, but we also did benefit from a mix shift because of the branded business grew much stronger than the private label business and that's obviously higher margin. So that so that definitely contributed.
Two the increase but but look we've we push through some pricing increases and our.
Sell throughs have been very good so very.
Very limited promotional activity.
Limited amount of markdown allowances.
A limited amount of Closeouts.
So good full price selling and that's that's obviously the biggest driver of gross margin for us.
Alright, Thanks, and then just a quick.
Modeling question I believe.
When you reported.
Four you said that the.
The one eight versus two H well.
Can you split this year should be similar to what you added in 2019.
<unk>.
But should we still think about that.
One H two we spoke with you.
No at this point, because we over achieved by 20 or so in Q1.
I think that youre going to see.
At least the way we're modeling it now is that is that it'll be more front half weighted then.
Then 2019.
Understood Alright, thanks very much.
Thank you.
Thank you. Our next question comes from Laura Champine with loop capital. Your line is open.
So a follow up on that.
What would be the reason that you would see a sequential slowdown in the back half, especially if you laugh at your toughest comp this next quarter.
And I think you just mentioned you might be able to grow wholesale footwear, 30% plus on top of that so what would drive a big slowdown in the back half.
Well I guess, there's a couple of things I'd say.
First of all our comparisons in the back half are.
Dramatically tougher than in the first half.
So that's that's number one.
Sure.
But I think also.
Sure.
There is some level of caution that we have on the back half just given all the macro.
The macro headwinds or potential macro headwinds and we have heard from some of our.
Basically all of our big wholesale customers that theyre, taking a somewhat cautious approach to the back half overall, I think that there'll be less cautious with us because of how well, we're performing and the sell throughs that we've been driving for them.
But certainly we know that folks are are.
Our cautious heading into the back half and we know for instance in our wholesale business quite a lot about what Q2 is going to look like and we have a pretty good sense of Q3, but we don't have a lot of visibility in Q4, and we had a blowout Q4 last year and at this point, we are modeling that to be down to last year.
Understood. Thank you so much.
Thanks, Laura.
Thank you.
Our next question comes from Camilo Lyon with <unk>. Your line is now open.
Thanks, So much good morning, everyone and great job on Q1 here.
Tom.
Kind of following that train of thought.
And how to think about the cadence of the year and how that unfolds and appreciate the comments on.
The lower visibility as we get out into the back half of the year.
Can you help us understand.
Yes.
Yeah.
Your ability to.
More of the in season demand that you typically are geared to do so.
So said differently <unk> been pulling forward a lot of.
Production, given the supply chain issues that you've.
<unk> been experiencing and that's been working very well.
Okay got it more shelf space and more market share.
Okay.
Limiting your ability to fulfill.
So in season orders. So if there is a cautious ordering pattern that unfolds for the back half of year and demand has not change and continues to be robust we have an ability to meet that demand.
Yeah, well look given the supply chain disruption, we don't have the same ability to chase goods in season that we normally do.
I won't say, we don't have any ability to do that and I still think that we have an advantage against our closest competitors.
And our speed to market and in our ability to work in season, but but certainly it's not.
The same capability that we had.
Yeah.
We had shorter lead times prior to the pandemic.
So.
So that does create a challenge again in fall in particular, we do a lot out of Mexico.
Which does help with regard to chasing in season.
But.
Part of what Youre seeing here is that we do need to get more of the orders upfront and Fortunately we are doing that.
And so then the follow up to that is I think last year, you talked about 50% of your Madden production to Mexico, and Brazil is there an intent to increase that.
So both of those countries.
There's definitely a long term goal to continue to to move more production out of China and into countries like Brazil, and Mexico, Youre not going to see us get.
Get past that level this year.
Okay, Okay got it.
And then I apologize if you've addressed this already filling.
So an issue today.
Have you talked about or are you seeing any sort of impact to your Chinese manufacturing facilities from the Covid shutdowns.
So far we have not seen any material impact.
Okay perfect.
Good luck and congrats on the great execution. Thanks.
Thanks Camilla.
Thank you.
Yeah.
Our next question comes from Marion Sapphire with <unk>. Your line is open.
Hi. This is Martin can you guys hear me.
Yes, we can I wasn't sure. They actually were calling me. That's so funny I've never really have my name, but just like that hi, congratulations.
Morning.
A couple of very quick questions could you talk a little bit about reboot. It I know, it's very early but have you seen good response to the launch and how are you marketing it.
It is it is it getting out there people learning about it and then could you also talk a little bit about your private label business. You know your core business has been so strong your products are in prime positions in all of the key department stores. So are you seeing increased interest from other other.
Are there other retailers of their people to do private label again things like that.
Sure Yeah.
Okay. So the first one was about rebooted and just for the folks on the call. That's our resale marketplace on Steve Madden and we also have one on Dolce Vita.
Called re Vita.
And yes, we're off to a good start there I mean, I think it's exciting I think that our customers are.
Are responding.
Two are.
Our efforts here to do right by the planet and to help folks.
You know to help keep products out of the landfill and extend their life and it's you know I think it said, it's really our first.
It's an important first step towards circularity.
It is obviously, where the fashion industry needs to move long term, if we want to lessen our environmental impact.
So I think that.
We feel really feel good about I think the customers like I think it is important to our employees too.
That's another important factor here.
I think theres going to be a big revenue driver.
Driver in the near term no.
But it is building.
Getting more products placed out there every week and.
And I think we feel good about the fact that we're we're leading herein.
And want to continue to drive it you asked about the marketing I think we've taken a fairly you know we've had we have we posted about it sure send emails about it yes, but we haven't marketed as aggressively yet, but I think that.
Given the early success, we will look to market it.
More meaningfully going forward.
And then in terms of private label.
Yeah, we are looking at a couple additional private label accounts, but.
Yeah, I wouldn't say that adding new private label accounts is a really core part of our strategy. If you look at our private label business. The vast majority of the revenue is still done with with a couple of big mass merchant and we're going to continue to focus on driving that business and then be selective about adding another private label accounts, where we think it makes sense.
That makes sense I just do one quick follow up on rebooted.
Do you take ownership of the merchandise back from your clients like do you do you, but do you buy it back what is the what does that look like what's that transaction look like okay. You don't.
No we did not and so when somebody sells something say I have Steve Madden shoes that I wanted to sell a big flip flop I posted through you how do you vet them. So that you know, it's safe and secure for the people who are buying it or is there somebody hosts the platform for you.
You know the.
Hosting the platform I'd have to I'd have to talk to our team, but how they are managing to get back to you on that.
Okay. Thanks, so much the assortment looks outstanding best of luck for the summer season.
Thank you.
Thank you our.
Next question comes from Sam Poser with Williams trading your line is open.
Good morning, Thanks for taking my questions I have.
Got a few.
Ed you mentioned that the.
Consensus numbers didn't quite match yours in the first quarter, so I'm going to ask for a little help so we make sure we could match yours.
Or at least get close to yours going forward. So first of all.
On the.
The prior call you called out that the DTC growth would be mid to high single digits with double digit ecommerce growth wholesale to be up low double digits flat gross margin and flat SG&A.
What does that look like now and can you give us some idea of.
Some number we should be looking at what kind of increase we're looking at again in Q2.
In total.
Uh huh.
Just to help us out so we can all sort of get a line to you.
Sure.
In terms of the annual revenue growth.
By segment so wholesale.
We've taken up our expectations for both wholesale and DTC compared to the numbers that you quoted last time.
So I would say wholesale now we're looking more at let's say mid to high teens.
<unk> 21 and DTC.
High singles and at the midpoint, maybe getting to 10% at the high end of our guidance.
Our gross margin is still looking at flat.
And then did you ask about SG&A as well as G&A as a percentage of revenue we were at flat before maybe now where we're flat to maybe very modest leverage 10, 10 bps or something that's at the higher end of the guidance.
And then in terms of.
Q2.
Already gave you.
Calpine wholesale revenue growth.
Sort of high thirties.
DTC obviously.
Very tough comparisons there.
You know going up against the impact of stimulus from a year ago and the big pop that we saw in that business. So in DTC, we'd be we'd be happy to get to flat versus 21 for Q2.
Gotcha and then.
Yes.
You talk you talked about the.
The timing of orders.
Price increases.
<unk>.
What I think he said once before the normal is like 40 days on the water you were out at 70.
What does it look like now and are you having.
In China with production are you having.
Are there issues or what.
Issues are there with let's say fat.
Factories, and then also the component factories.
That's.
All of them every mature the materials and all that other stuff with in China to get good. So how does this all look you know from sort of the.
Outside of the making of a product through the transportation.
Is any part of that getting better or is this locked down making it worse now.
Yeah, So I'll take the transit first.
You asked about 70 day Transit times, yes that is still what we're experiencing and that's actually up from more like 30 days on a normalized basis.
So still more than double.
The amount of <unk>.
<unk> has taken to get us to get us the product.
In terms of factory delays.
Have we had some issues here or there, yes, but there really haven't been any material issues.
In terms of factory delays, so far but it's something we'll obviously have to to watch carefully going forward and.
<unk>.
You know obviously with the zero Covid policy in China that there's always a risk that there is some impact there going forward.
Alright, thanks, very much and continued to fall.
Thank you. Our next question comes from Dana Telsey with Telsey.
Telsey Advisory group your line is open.
Good morning, everyone and congratulations on the great performance.
A couple of things can you talk about category performance, what you saw in the different categories in your outlook going forward. The magnitude of the price increases does it differ by category and what are you looking at going forward and price increases and international how did Europe perform what did you see there and is there any.
On GSP. Thank you.
Okay.
Alright, so the first one good morning Dana.
First one was category performance.
I assume youre talking about.
Within footwear.
Exactly yeah. So.
In terms of whats working.
If you if you try to look at it thematic Lee I really think we're seeing a lot of success with this nineties and Y two K trend and that really goes across category. So we're seeing success.
With platforms and with block heels, and with big bottom sneakers, and with low fares and all stuff that really fits into this nineties y2k trend.
I think the second question was about the magnitude of price increases.
As you alluded to it does vary depending on the category and also really the.
The distribution of the price.
Price points and so private label, obviously less than branded for instance, but we're still say I think I think sticking with that sort of 5% to 12% is the range on our various products, obviously, Steve Madden being towards the higher end of that.
The next one was about international.
<unk>.
Overall international has very strong momentum really excited about what we're seeing.
And just about every region.
Outside the U S.
And in Europe of course has been our shining star and we continue to have very strong momentum there.
And that business should be up over 30% again this year versus 2021.
And then <unk> got to take the last one sure.
GST the only update since the last time, we spoke is that the leadership Conference Committee. These are the negotiators that will work on reconciling the house and Senate versions of the competition and innovation Bill was announced on April seven 2022.
And the conference will consist of 26 Senators evenly split and 81 representatives with 50 of them Democrats and 31 Republican So there'll be assigned to subcommittees to work on science Foreign Affairs energy commerce that patient on tariffs.
And we hope that when they come back from their state work, which they expect it to be back. This week from the state work that this is a top priority and Thats based on.
Leaders from both parties talking about the Zika Bill and America, <unk>, So where it's looking positive.
But it looks positive before as well and we haven't seen a lot of movement, but it seems like they're committed at this time.
Just a reminder, the annual impact is built into our forecast is just about the same as the.
Last year.
So over 2021 there's not much of an impact on gross margin, but over 2019, it's still about 50 basis points roughly.
Thank you.
Thank you. Our next question comes from Susan Anderson with B Riley Your line is open.
Hi, good morning, nice job on the quarter.
I was wondering if you could maybe just talk about the promotions. Obviously, they must has still been pretty lean and just curious if anything was layered back on versus those lean levels last year, and then how you're thinking about it for the rest of the year.
Hi.
Yeah. So in Q1, you are right, we did have very controlled promotional activity.
As we look out we do see.
Some.
More promotional activity out in the market than we saw last year, it's certainly not back to.
The levels that we saw pre pandemic, but but I think we all recognize last year. It was very low in the market overall and we have seen.
Uptake there so we built a little bit of that into our into our forecast.
Given that consumer demand for our brands and our.
Our products, we don't anticipate having to resort to a lot of promotional activity.
But we do think it'll be a little bit higher than it was.
2021.
Great and then just on the apparel front it looks like that was pretty strong in the quarter I guess now that we're kind of past COVID-19 and we're returning to some more ash them all apparel and everything maybe if you could just give some color on how youre thinking about that business, and maybe where you're thinking about it longer term.
Yeah, we're excited about the about the opportunity we have in apparel I think I discussed last time that we expect that business to be up close to 50% this year versus 2021.
And also talked about how.
For 2000 for fall of this year, we are going just to the Steve Madden label, So where it is.
As you know we've been we've been operating with the co branded label BB Dakota, Steve Madden.
And we're gonna be going just to Steve Matt.
And we've got very good consumer response.
To the brand change and also to the line for fall.
And we're very optimistic about that business and continue to see some nice sell throughs. This spring.
Dresses, particularly strong category for us doing well with.
Yeah.
Many to maxi lengths there.
Our <unk> are doing very well across a range of cell or <unk> got some color that a lot of color on the line that's doing very well so.
So we're just excited about the about the opportunity there.
Great that sounds good good luck the rest of the year.
Thank you.
Thank you.
Currently I'm showing no further questions in the queue at this time I'd like to hand, the call back to Mr. Ed Rosenfeld for closing comments.
Great well, thanks, so much for joining us everybody and we look forward to speaking with you on the next call have a great day.
Ladies and gentlemen, thank you for your participation in today's conference you May now disconnect everyone have a wonderful day.
Okay.
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Hum.
Okay.
[music].
Yes.
Okay.
Yes.
Okay.
Yeah.
Okay.
[music].
Okay.
Okay.
Yeah.
Yeah.
Yes.
Okay.
[music].
Okay.
[music].