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Hawk’s Nest

Unusual Call Buying in Steve Madden (SHOO)

by | May 25, 2021

Steve Madden (SHOO) on 5/24 with unusual action as 3000 June $40 calls bought to open $1.70 to $2.05 which was 95X daily call volume. SHOO does not see much action but on 1/26 did see 500 December $45/$35 strangles sold to open. SHOO shares have pulled back to the rising 55-day moving average twice recently and held, shares sit just below $44 resistance highs from 2019. SHOO is known for its branded and private label footwear for women, men and children though it also has some exposure to fashion handbags, apparel and accessories. The $3.45B company trades 19.6X Earnings, 2.9X Sales and 48.25X FCF with no debt and a 1.47% dividend yield. SHOO forecasts see revenues rising 35.6% in 2021 to offset 2020 declines and another 10% in 2022. SHOO on its earnings call in April highlighted some near-term headwinds with supply chain challenges and rising freight costs but sees the acquisition of its European JV as a growth driver, a business that was up 21% in 2020 despite COVID. SHOO is also seeing strong growth from digital channels which has driven margins higher.