Jefferies has moved Steven Madden (NASDAQ:SHOO) from a Hold to an Underperform rating and cut its price target to $30 from $37, attributing the change to intensifying wholesale pressures. The shares, trading at $38.76, dropped 11.81% over the previous week even though that price remains well above Jefferies' new target.
The research note emphasizes that roughly 70% of Steven Madden's business is generated through wholesale channels, and Jefferies says major retail customers are resisting the company's double-digit percentage price increases. That resistance is occurring despite the company's recently reported revenue growth of 6.41% over the trailing 12 months.
Jefferies points to concrete signs of pushback from large accounts including Walmart, Target and TJX. In some instances, those partners are responding by moving to direct-to-factory sourcing or selecting private-label alternatives, steps Jefferies views as creating material headwinds for Steven Madden's business model and pricing power.
Reflecting those concerns, Jefferies trimmed its 2026 wholesale revenue forecast for Steven Madden by about $250 million from a base of roughly $1.8 billion. The firm frames the concentration of wholesale revenue among a few large retail partners as a material risk that may not be fully captured in the stock's valuation.
Other analysts have taken differing views in recent updates. UBS retained a Neutral rating and kept a $43 price target. Williams Trading lifted its target to $52, citing strong sales over the Thanksgiving weekend. BTIG increased its target to $50 after conversations with company management at FFANY Market Week; BTIG had earlier raised its target from $40 to $43 while noting that third-quarter challenges were expected to ease in the fourth quarter, which could support a rebound in organic revenue trends.
Separately, Needham downgraded Nike (NKE) from Buy to Hold, pointing to slower-than-expected progress in that company's turnaround. Needham highlighted uncertainty about the timeline for improvement and limited visibility into recovery metrics, even as Nike's CEO, Elliott Hill, emphasizes sport and product innovation.
The juxtaposition of analyst moves on Steven Madden and Nike provides investors with additional context about pricing dynamics and retailer negotiation leverage in the apparel and footwear channels. For Steven Madden specifically, the central questions raised by Jefferies relate to pricing power with large wholesale accounts and the vulnerability tied to a concentrated distribution base.
Clear summary
Jefferies downgraded Steven Madden to Underperform and cut its price target to $30, citing retailer pushback against double-digit price increases and a concentrated wholesale customer base. The stock has fallen sharply in the past week but still trades above the new target; other broker updates range from neutral to higher price targets based on recent sales and management conversations.
- Key points
- Jefferies downgraded SHOO from Hold to Underperform and lowered its price target to $30 from $37.
- Major retailers including Walmart, Target and TJX are pushing back on price increases, with some shifting to direct sourcing or private labels.
- Other analysts are mixed: UBS holds Neutral at $43, Williams Trading raised its target to $52, and BTIG lifted its target to $50 following management discussions.
- Risks and uncertainties
- High wholesale concentration - With about 70% of revenue tied to wholesale, Steven Madden faces outsized risk if key accounts reduce orders or demand lower prices.
- Price pass-through constraints - Retailer resistance to double-digit price increases could limit the company's ability to fully pass through input costs, pressuring margins.
- Broader demand/turnaround visibility - Analyst downgrades elsewhere in apparel and footwear, such as Nike's downgrade, underscore uncertainty about timing and visibility into recovery metrics across the sector.