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Management Discussion

• Total revenue for the three months ended March 31, 2021 increased 0.5% to $361,025 compared to $359,168 in the same period of last year, with increases in the Wholesale Accessories/Apparel and Retail segments, partially offset by a decrease in the Wholesale Footwear segment. Gross profit was $139,104, or 38.5% of total revenue, as compared to $133,464, or 37.2% of total revenue, in the prior-year period. The increase in gross profit as a percentage of total revenue was due to a shift in the mix of our business due to a higher penetration of retail as a percentage to the total, which was driven by our owned and operated e-commerce and the non-anniversary of certain COVID-19 related inventory reserves in the prior year period. These increases were partially offset by some headwinds in connection with inbound freight costs and the non-renewal of the Global System of Preferences ("GSP") which impacted imports in our handbags business. Operating expenses in the first quarter of 2021 were $110,448, or 30.6% of total revenue, as compared to $121,373, or 33.8% of total revenue, in the first quarter of the prior year. The decrease in operating expenses as a percentage of total revenue was primarily attributable to the Company's expense control initiatives, partially offset by early lease termination and modification charges, restructuring and other related charges due to the COVID-19 pandemic. For the three months ended March 31, 2021 and 2020 impairment charges were recorded of $612 and $28,821, respectively, related to store fixed assets and lease right-of-use assets. For the three months ended March 31, 2020, the Company recorded an impairment charge of $9,518 associated with certain intangibles. The effective tax rate for the first quarter of 2021 decreased to 20.3% compared to 29.4% in the first quarter of last year. The difference in effective tax rate was primarily due to the expected jurisdictional mix of profit and losses from each period. Net income attributable to Steven Madden, Ltd. for the first quarter of 2021 was $21,197 compared to net loss attributable to Steven Madden, Ltd. for the first quarter of 2020 of $(17,451).