Please stand by. Good day, everyone. Welcome to the Steven Madden Limited Third Quarter Fiscal 2012 Earnings Conference Call. Today’s call is being recorded. For opening remarks and introductions, I would like to turn the call over to Jean Fontanta of ICR.

Thank you. Good morning, everyone. Thank you for joining us today for the discussion of Steve Madden’s third quarter 2012 earnings results. Before we begin, I would like to remind you that statements made in this conference call that are not statements of historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and other unknown facts that could cause actual results of the company to differ materially from historical results or any future results expressed or implied by forward-looking statements. The statements contained herein are also subject, generally, to other risks and uncertainties as described from time-to-time in the company’s reports and registration statements filed with the SEC. Also, please refer to the earnings release for more information on risk factors that could cause actual results to differ. Finally, please note that any forward-looking statements used in today’s call cannot be relied upon as current after this date. I would now like to turn the call over to Ed Rosenfeld, Chairman and CEO of Steve Madden.

Thanks, Jean. Good morning, everyone, and thank you for joining us today as we review our third quarter results and discuss our outlook for the remainder of the year. Third quarter 2012 was a record quarter for Steve Madden as we delivered the highest quarterly sales and earnings in our company’s history. Net sales increased 13.7% compared to the third quarter of last year with double-digit gains in the wholesale and retail. Gross margin expanded 190 basis points in the quarter. And diluted EPS was $0.86 per share including charges related to the bankruptcy of Bakers Footwear Group which negative impacted EPS by $0.08. This compares the diluted EPS of $0.74 in the third quarter last year. Before I get into the details of the financial performance, I’d first like to touch on some of the highlights in the quarter. First, we got an outstanding quarter in our core Steven Madden women’s wholesale footwear business. Steven and his design team created an outstanding fall product lines that has resonated with the retailers and consumers alike. Movies, particularly looks and fashion sneakers were standout in the quarter. Endorsement was also important which started in Ryan stones performing well across various product categories. The on-trend product offerings were robust increases with key customers like Nordstrom, Dillard and Northern Tailor. Overall, net sales of the Steven Madden women’s wholesale business grew 15% in the quarter compared to last year. And the outstanding sell through of the products at retail enable us to reduce mark down around to the department stores, which intern drove 150 basis points year-over-year improvement in gross margin in Steven Madden women’s wholesale in the quarter. The trends at merchandize assortment in our Steven Madden women’s brands also resulted in strong performance in our retail business. Comparable store sales rose…

Thank you very much. (Operator Instructions) And our first question today comes from Camilo Lyon with Canaccord Genuity. We’ll take Jane Thorn Leeson from KeyBanc. Jane Leeson – KeyBanc: Hi. Can you hear me? Hello?

Hi Jane. Jane Leeson – KeyBanc: Hi. Congratulations on a great quarter.

Thank you. Jane Leeson – KeyBanc: So actually I had – actually I had a couple of questions. How – my first one was, what are you seeing in your tourist markets as it compares to how you described it last quarter when you said it was sort of down – on the downturn.

Yeah. Interestingly, we saw some improvement in the tourist markets in Q3. New York is a great example, as you’ll recall, we talked about New York being essentially flat in Q2 in our retail stores on a comp basis. In Q3 we were up 11% in New York. So it’s a nice rebound. And that had continued into fourth quarter prior, of course, to hurricane Sandy. Jane Leeson – KeyBanc: Okay. Great. That sounds great. And then also on how are you seeing your retailer segment in terms of reorders today? And also, how weather was impacting most of the other footwear companies that are reported today? Has their losses actually helped your gains similar to what – I think what you said last year around the same time period?

Well, that’s hard to determine exactly what’s driving the strong performance that we’re having right now, but basically we feel that we have a very, very strong product assortment for fall. And you asked about retailer segment, I would say that when we talked to most of the retailers, they are telling us that their overall business is fair, it’s not bad, but it’s not great either, but virtually all of these retailers are also telling us that we are outperforming the competition right now that the sell through that works are better and the growth that we’re experiencing is better than they are in the overall department averages. And we think that’s because we’ve had great products. So we feel pretty good as we head into the balance of the year. Jane Leeson – KeyBanc: Okay. Great. And then final question was just on sourcing, if you could just give us an update on your sourcing and are you on track for – to get to 15% direct sources here and I guess 200 basis points by – over the next three years?

Yeah, we are sort of right on target. We are transitioning the legacy – a portion of the legacy footwear business to the direct sourcing model through our top line office. I will say that our new goods that were placing right now were somewhere between 12% and 15% going direct. Of course that’s – as we’ve talked about the full, we’re really focusing initially on the private label and the more volume business to go direct. And that’s growing very well and we believe we’re already starting to see the gross margin benefits with those direct sourcing business – direct sourcing footwear. Jane Leeson – KeyBanc: Okay. Great. Thank you. I’ll walk it back it queue.

Thanks Jane.

Our next question will come from Corinna Freedman, Wedbush Securities. Corinna Freedman – Wedbush Securities: Hello.

Hi Corinna. Corinna Freedman – Wedbush Securities: Hi sorry. I’m little displaced because of Hurricane Sandy, so just a question on any store closures you have also related to Hurricane Sandy and two if you can remind us what the renovated stores, how the comp compare to the base and how many more you have to renovate and if you can tell us what you expect for growth margin improvement for the fourth quarter or just a range, so we have a good sense of that. That’s all, thank you.

Sure. I believe the first question was about store closures from Hurricanes Sandy. I think we have about nine stores closed right now. And in terms of the overall impact of the Hurricane, we do think that on a relative basis it’s going to impact us more in our retail stores because of the concentration that we do have in Northeast and particularly in New York City. And at this point our best guess is that we’re going to lose about $1 million in sales due to the Hurricane which would translate into roughly $600,000 in gross profit retail division. Our wholesale is much harder to talk but we do not believe there is going to be material impact in wholesale. So, overall you’re looking a penny, maybe two pennies as an impact. The second question I believe is about the remodel stores, is that right? Corinna Freedman – Wedbush Securities: Yes, that’s right.

Yeah. So this year we remodeled, I believe its nine stores and we have been seeing on average sales productivity increase about 20% in those remodel stores. So we get a very nice return on that investment and we’ll be looking to do a similar number next year maybe even little bit more. The third question was gross margin... Corinna Freedman – Wedbush Securities: That’s right.

In Q4. Yeah we will expect to see at least as much more gross margin improvement as we end Q3. Frankly it should be a little bit more as part of that benefit from mix because retail is going to make up a higher percentage of the sales, but we also think we’re going to get apples-to-apples gross margin benefit in the wholesale business. Corinna Freedman – Wedbush Securities: Okay. Great. Thank you.

Our next question will come from Diana Macquarie with Greene Capital. Diana Macquarie – Greene Capital: Congrats on the great quarter.

Thank you. Diana Macquarie – Greene Capital: Okay. I just want to see how is Betseyville on the JCPenney have been doing? Any update on that?

Sure. We said Betseyville products on the floor of JCPenney were about a month and a half now. In terms of what we did in-house here, we’ve shipped in shoes, bags, slippers and very recently shipped in some cold weather accessory and then our licensing partners have also shipped number of categories including jewelry, watches, apparel and hosiery. I would say the initial selling has been okay, not that, but not great either and I think there’s couple of reasons for that. Number one, look, JCPenney management has been very upfront about the fact that – challenging, is clearly a year of transition for them and so that’s made it – made a little bit more challenging, but also there is a learning curve with these new brands and when we first started with Olsenboye, our first season of the box wasn’t great there either, but we learned about what products works and what products didn’t work in Olsenboye and JCPenney and we’ve had a lot of success since then. So I think that – we were analyzing very carefully which things the customers aspiring too which they aren’t and we expect to see even better sell throughs in spring. The good news JCPenney continues to be very bullish on brand and so are we. Diana Macquarie – Greene Capital: Okay. Great. Can you update on the development in newer brands Superga and how Loungewear, Nordstrom is doing?

Yes. The news on both those fronts is very good. Superga continues to do very, very well. Now this time of year of course it was up a little bit because it’s a knicker brand and it’s more of a spring/summer business. But retailers are very excited about base this on selling that they got this year and so we’re getting expanding doors for spring and in places like Nordstrom and Bloomingdales and J.Crew and even Neiman Marcus. So we’re really excited about this the progress that we’re making with Superga. And we think that business could and should double in 2013 versus where it was in 2012. Coming to the Loungewear, we had a really good launch exclusive with Nordstrom U.S. and Hudson Bay in Canada. And for spring, we’re going to opening up to distribution to the other better department stores and we’ll go for there. Diana Macquarie – Greene Capital: All right. Great. Good luck guys.

Thank you.

Our next question will come from Scott D. Krasik, BB&T Capital Markets. Scott Krasik – BB&T Capital Markets: Hey, good morning.

Good morning. Scott Krasik – BB&T Capital Markets: Just a couple of questions. So Steven Madden, Womens really good quarter I think if you look at the second quarter and try to back in those numbers, it may have been flat or even slightly down. Sort of, what the status of the brand, I mean, I would have thought it was just as hot in May as that was in September. So, why do you have such big swings quarter-to-quarter?

Well, keep in mind we talked a lot in the last call about the weakness in the sandals in the spring. It was a very tough sandal season that we certainly felt bad impact in Q2 in the Steve Madden Women’s Wholesale business. But as we went into Q3 and we got into the fall, the fall season, our products has been received very, very well and we saw real nice increase. Scott Krasik – BB&T Capital Markets: So, outside of a major miss like sandals in the spring, I mean should the Steve Madden Women’s business grow every season or can it grow every season?

That’s certainly the goal, yeah. Scott Krasik – BB&T Capital Markets: Okay.

I don’t think although – excuse me, I want to say, I think 15% is not a sustainable long-term rate for grand that is mature as Steve Madden, but in the U.S. that is. But certainly we expect to grow every season. Scott Krasik – BB&T Capital Markets: Okay. And then talk about, you mentioned the military boots, maybe talk about tall shaft boots and some of the other styles and what’s been happening since the weather broken in October.

Yeah. Well, that’s – you’ve certainly hit the nail on the head as the way you phrased the question, because early in the season it was really all about booties, but over the last couple of weeks as the weather has turned we’ve seen a real nice pickup in tall shaft boot. And so we’re pleased about that because as we head into the critical holiday selling season. We’ve got now booties that we believe will continue to perform, but we’ve also got tall shaft boots coming on strong. Scott Krasik – BB&T Capital Markets: Okay. And then just the last, I think we have to wait for the Q for this specific number, but the gross margin and accessories has been very strong. Your sales continued there. I mean, is it okay to assume that the gross margins next year in accessories can continue to expand?

Yeah. I think there is still – there is still room in accessories for expansion next year on the gross margin. Scott Krasik – BB&T Capital Markets: Okay. All right. Thanks. Congratulations.

Thank you.

We have Camilo Lyon with Canaccord Genuity with the next question. Camilo Lyon – Canaccord Genuity: Hi can you hear me Ed?

Yeah. Camilo Lyon – Canaccord Genuity: Great, great. I just wanted to get maybe a little clarification if you could, just on the guidance, if I remember correctly last quarter you had a tax benefit and if you could just update us on what that is relative to the guidance you’ve provided today, just to clarify any doubts out there?

Sure. The guidance that we provided last year of 267 to 277 included the tax benefit in the back half. I believe it was about $0.08 and there has been no change to that. So the tax benefit is just as we guided earlier. The new guidance is 264 to 269, but keep in mind, that includes the $0.08 of charges from Bakers which was not in the previous guidance. So if you add that $0.08, you are looking at 272 to 277 or otherwise – in other way of putting that is the top half of the previous range of 267 to 277. Camilo Lyon – Canaccord Genuity: Okay. Great. That’s helpful and then just if I remember correctly, do you had been thinking about in fairly conservative new business in the back half, so your commentary on the fourth quarter as its shaping up seems to me like a better boot businesses and where they are starting to break. Is that fair? And is that – how do we contemplate that acceleration in that part of the business relative to what the current guidance implies?

Well number one I think we did – we started off the year looking with the plan that included pretty conservative Boot guidance. But if you recall in the last call we had already had some very good rates from the Nordstrom anniversary sale and so we had already sort of taken up our view on boots and booties for the back half. And I don’t think we feel incrementally a little bit better than we did on the last call about boots and booties and that’s one of the reasons that we moved the guidance – midpoint of the guidance up. Camilo Lyon – Canaccord Genuity: Got it. And is that more of the unit driven comfort level or is an ASP given the stud embellishments or if you could just maybe provide some color on that that will be great?

Sure. ASP/AUR is basically flat right now overall and in the boot and booty category. In fact they are some puts and takes there I think with booties making up a higher percentage of the boot and booty mix that brings ASP down but as you point out some of the embellishments, stud etcetera is ASP – is an ASP benefit and so net-net is basically flat. Camilo Lyon – Canaccord Genuity: Okay. And then just lastly on the Betsey Johnson International I know that that’s something like you guys just started doing last quarter. I wonder if there is any enough data to get a senses to how that brand is been expected in so many international markets that you’re opening up the stores?

Yeah we’ve just got in going a partner GRI in Asia opened the first store in Macau and they’ve got a very good response. I think they were pleasantly surprised, and so they’ve got a couple of more stores that are going to open by the end of the year in China. And our partner in Dubai is also now looking to Betsey Johnson program based on the success that GRI had. So we think that’s could be another nice growth vehicle for us, but it’s still fairly early. Camilo Lyon – Canaccord Genuity: Good, sounds good. And actually one last question that’s truly is a last one. Could you just talk about the demand trends at the various levels of your wholesale business, and we’re seeing a stronger demands trend at kind of like the lower tiered, more discount stores, or is the mid-tier department store the better department store channel performing better, any sort of insight there would be helpful.

Yeah. We’ve not seen as much variation between channels as we have in certain – little bit more consistent. Frankly, for us, the demand is strongest where we’re selling the Steve Madden brand because that’s really the strongest part of our business right now. So anywhere we’re selling that namely the better department stores, we’re getting – we’re seeing very strong demand. Camilo Lyon – Canaccord Genuity: Great. And so, good luck with fee with the fourth quarter. Take care.

Thank you, Camilo.

Sam Poser with Sterne, Agee has question. Sam Poser – Sterne Agee: Hi. Morning Ed. Thanks for taking my question.

Good morning. Sam Poser – Sterne Agee: A couple of questions. So does your guidance include the impact of the storm?

Of the storm? Sam Poser – Sterne Agee: Yeah. The – like two sets.

Yeah. We are still comfortable with the guidance given the storm, of course that way i.e. – we created – we have not changed the guidance since the storm any or two. We don’t think Marriott guidance change, but we came with the guidance before the storm admittedly and that was 264, 269. We think we could lose potentially a penny here, but we don’t think we need to change them. Sam Poser – Sterne Agee: Okay. Thanks. And then can you give us, I mean, you finally have transitioned all these purchases and all these other things. Can you give us the puts and takes of the gross margin and some detail of the gross margin improvement?

Sure. I knew there are few things that I could tell about. We did get a benefit in the quarter from the SM Canada business and we’ve brought in-house early in the year of about 80 basis points. So that was a nice impact. The overall change in the gross was 190 basis points. Other than that, there was – because we continue to grow that’s from ad business, the private label business that actually costs us about 30 basis points. The big factor in wholesale and on apples-to-apples basis was this improvement in Steve Madden and women we were up 150 basis points in our biggest wholesale. And that was driven largely by reduced market allowance, because of just very, very strong sell-through at retail. So I think those are the big items. Sam Poser – Sterne Agee: What about the mix shift now that you’ve anniversaried the acquisitions of top line and say all that other stuff and you starting to lock that?

Yes. So now that we have anniversaried that, it’s not – if there is no meaningful impact for mix there. Sam Poser – Sterne Agee: But I mean, has that margin improve as well of the – say, have those margins improve I think year-over-year basis. We...

We actually – yes, we did make some nice improvement to the top line margin in particular. And that’s something we’re really focusing on there. With top line right now, it’s not really a sales growth game; it’s about improving the profitability of the existing business. And in some cases, we want to reduce unprofitable or low margin sales in top line. Sam Poser – Sterne Agee: Got you. And lastly, well, how’s the men’s business doing?

This business was about flat in the quarter, actually may have been down very modestly. The challenge there, were doing very well with our fashion dresses, the challenge is driving force has been a really important part of the business over the last few years. And that is a category that is just trending down right now. And so, that causes a little bit of a challenge for us. But we’ve brought in some new fashion products that’s performing very well, some more fashion forward looks with stud, etcetera, and so that’s very encouraging. But we do have to find a replacement for the drivers. Sam Poser – Sterne Agee: And then lastly, looking ahead into 2013 we should see some significant gross margin improvement in the first two quarters as well, maybe not up to the 190, but still some big increases and that is all sort of all balance out at the end of next year. Am I thinking about that correctly?

I’m not sure why you say that. Look, it’s – again, it goes back to the lapping, it’s a part of the lapping of SM Canada. All this – some of the things that I felt here I guess I’m trying to forget the... Sam Poser – Sterne Agee: Yeah.

The only thing SM Canada would be a benefit in the first month of the year I guess we required in February. So yeah you have some benefit in January of next year. Sam Poser – Sterne Agee: And then you probably aren’t going to run into the same kind of issue again, I mean – I mean how you would be thinking about gross margin into the first half of next year, let me ask it that way?

Yeah – unfortunately we’re not going to talk about next year on this call. We’ll do that on the fourth quarter call. Sam Poser – Sterne Agee: All right. Well thanks Ed and continued success.

Thanks Sam.

At this time there are no further questions in the queue. I’d like to turn the conference back over to our host for any closing or additional remarks.

Great. Well, thanks everybody for joining us on the call, and we look forward to reporting back to you after fourth quarter.