Good day, and welcome to the Steven Madden Third Quarter 2013 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Jean Fontana of ICR. You may begin.

Thank you. Good morning everyone. Thank you for joining us today for the discussion of Steven Madden’s third quarter 2013 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 and 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 report and registration statements filed with the SEC. Also please refer to the earnings release for 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 Steven Madden.

Thanks, Jean. Good morning everyone, and thank you for joining us today. Overall, we delivered solid financial results in the third quarter, despite a difficult retail environment. We believe that our ability to perform well during this challenging period is attributable to the strength of our diversified business model, which includes multiple brands, product categories, distribution channels and geographic territories. Consolidated net sales for the quarter increased 10.6% to 394.8 million and net income grew 16.1% to 44 million or $0.60 per diluted share. Despite the soft retail environment, we remain on-track to meet our sales and earnings goals for the full year 2013. Our Wholesale net sales in the quarter were 345.9 million, compared to 311.5 million in the prior year’s third quarter, an 11% increase. Our largest segment Wholesale Footwear was the clear standup for the Company in the quarter. Wholesale Footwear net sales were 272.7 million, up 19.2% from 228.7 million in Q3 2012. Strength was broad-based with 11% increase in our Branded Wholesale Footwear business and a 38% increase in Private Label Footwear. Within branded footwear, our two largest divisions, Steve Madden Women's and Madden Girl each recorded double-digit percentage increases in net sales. Both benefited from strong gains with Macy’s with the transition of Steve Madden to the Impulse department continues to pay dividends. Strength in the flagship brand extended into other categories as well, as Steve Madden Men’s and Steve Madden Kids each also increased double-digit on a percentage basis compared to the prior year. Finally, our international business was outstanding in the quarter. International net sales rose 25% in the quarter on the strength of a 41% increase in sales for international partners, particularly robust increases in China, Dubai and Mexico, combined with a solid double-digit percentage gain in our owned operation in…

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(Operator Instructions) And we'll take our first question from Erinn Murphy with Piper Jaffray.

Ed I was just hoping you could elaborate a little bit more about the current environment. I mean clearly traffic has been a headwind for a number of companies out there. Could you just maybe speak first to the change you saw in traffic throughout the quarter? And then as we think about how you are planning your business for the fourth quarter, what are you seeing in the market right now? Are you seeing traffic inflect as the weather has gotten cooler? Just maybe help us kind of think about the context for the environment currently. Thank you. Piper Jaffray: Ed I was just hoping you could elaborate a little bit more about the current environment. I mean clearly traffic has been a headwind for a number of companies out there. Could you just maybe speak first to the change you saw in traffic throughout the quarter? And then as we think about how you are planning your business for the fourth quarter, what are you seeing in the market right now? Are you seeing traffic inflect as the weather has gotten cooler? Just maybe help us kind of think about the context for the environment currently. Thank you.

Sure. Well, as you know traffic has been a challenge all year, but Q3 was the weakest quarter in terms of year-over-year traffic in our own retail stores of the year. In terms of the sort of cadence over the quarter -- the change over the quarter, we were -- the weakest month was actually September, so it got worst in September. However, in October we have seen a meaningful improvement, and in fact the quarter-to-date traffic is better than the traffic trend in any of the first three quarters of the year. So as the cold weather has come, we have seen a nice improvement there.

And then in terms of -- I mean if you think about the improvement is there a specific category you are starting to see lift from a conversion perspective? Or how should we just think about the kind of category performance currently in the market on your business? Piper Jaffray: And then in terms of -- I mean if you think about the improvement is there a specific category you are starting to see lift from a conversion perspective? Or how should we just think about the kind of category performance currently in the market on your business?

Yes, over the last few weeks we have seen a real nice improvement in Booties and in tall shaft boots, so that's definitely where we have seen the velocity pick up.

Then I guess in terms of just the inventory levels were a little bit heavier at the end of the quarter and I apologize if I missed this on the prepared remarks. But could you just parse out for us how much was a kind of new store building into kind of your holiday plans and any other kind of components in that we need to be aware of? Piper Jaffray: Then I guess in terms of just the inventory levels were a little bit heavier at the end of the quarter and I apologize if I missed this on the prepared remarks. But could you just parse out for us how much was a kind of new store building into kind of your holiday plans and any other kind of components in that we need to be aware of?

Sure, in terms of the inventory maybe we can talk about wholesale and then retail. Wholesale was essentially in line with -- the increase in inventory in wholesale was just a little bit greater than the wholesale sales growth and that's primarily due to us bringing -- having a bigger position on our number one item this year Troopa was the number one item last year and this year. We were really chasing that product last year, this year we were more prepared for it in fact we have got open stock replenishment on that item, and which obviously requires us to carry a little bit more inventory but also generates a lot of full price sales with limited markdown liability. And that we feel very comfortable with, Troopa incidentally is going to be even bigger this year than it was last year. And we’re very pleased about that. The wholesale is pretty straight forward, retail is really where the increase in inventory is greater than the increase in the business, and that's really a function of Booties. So we brought in a lot more Booties earlier this year than we did a year ago, last year we felt we were light in that category early in the season and we wanted to be prepared because we believe in that category again. But what happened in our retail stores -- so number one we were planning to be a little bit higher in that category, but then also fall broke late, the fall styles broke late for us in our own retail stores. So while we were doing quite well with Booties being our wholesale channel, people like Nordstrom and Dillard’s, remember in our retail stores we have this very heavy exposure to the Northeast and particularly to New York City. And so in August and September given the fact that the weather was particularly in September very warm in that region and also I think because spring had broken late, so people were maybe not ready for boots and booties. But anyway in our stores we were still selling a lot of sandals and opened up footwear at the tail end of Q3. So the bootie inventory looks a little elevated at the September 30th balance sheet take you are looking at. The good news is, once we got into Q4 as I said that category really took off, and so we have really started to move through those goods and feel very good about our inventory position in that category in the retail stores now. I should also add that we did of course look to adjust to the order that we had for fourth quarter in booties downward a little bit when we had the slow start to that category in the retail stores. And so that's the benefit of our sort of quick turn model which enables us to be nimble. But net-net we're in a good position now in the bootie category.

That's really helpful. And just one clarification, just can you remind us what the hurricane Sandy impact was last year as we think about this time? Thanks. Piper Jaffray: That's really helpful. And just one clarification, just can you remind us what the hurricane Sandy impact was last year as we think about this time? Thanks.

Yes sure, we think it was most impactful again because of the exposure to the Northeast and our retail stores and most impactful to our retail business. And we think it hit us by about 200 basis points in comp store sales. Yes and then I think we said about maybe a penny in earnings last year.

And we'll take our next question from Kate McShane from Citi.

I wondered Ed if you could give a little bit more color on wholesale sell-through versus your comp store sales trends that you saw at retail, was is it a similar negative sell-through and if not can you help us reconcile that? And is one channel doing better than the other? And then just a follow-up question to that is just, if there is any additional inventory which is sound but maybe there is not that much, now how do you address that over Q4? Citigroup: I wondered Ed if you could give a little bit more color on wholesale sell-through versus your comp store sales trends that you saw at retail, was is it a similar negative sell-through and if not can you help us reconcile that? And is one channel doing better than the other? And then just a follow-up question to that is just, if there is any additional inventory which is sound but maybe there is not that much, now how do you address that over Q4?

Sure, in terms of wholesale versus retail I think it really goes a lot to what I was talking about, about fall styles breaking later in our stores than in the wholesale channel. So, in wholesale we were getting some very sell-through on the booties and even boots in the back half of Q3. If you can think about it people like Nordstrom, Dillard’s et cetera they don’t have the same exposure that we do to New York City in the Northeast. However in Steven Madden retail stores we do about 30% of our business just in New York City in retail. And then we add-in New York, New Jersey et cetera you’re talking about north a 40% of the business. So I think that’s really the difference between the sell-through that we saw at wholesale and somewhat weaker comp stores sales trends that we had in our own stores but as I pointed out once we got into October those categories really picked up for us in our retail stores. In terms of different channels, I’m not seeing any major difference across channels. We actually had good performance in the department stores, good performance in mass merchants with our private label. We are doing well with the shoe chains et cetera so not any big variances there. And then in terms of inventory as I said I actually think those we are in pretty good shape. We had the booties in a little bit earlier this year, but they’re moving very well now. We do expect the retail, I would say in retail to be fairly promotional environment this year in Q4. And we were a little bit more promotional in Q3 than we were a year ago. You saw the 50 basis point decline that we had in our retail gross margins.

And just one more question if I could sneak it in. With the private label are we going to lap that at some point how many more quarters can we expect to have some gross margin pressures to the private label mix? Citigroup: And just one more question if I could sneak it in. With the private label are we going to lap that at some point how many more quarters can we expect to have some gross margin pressures to the private label mix?

I hope not. We hope it keeps going just like this. We’re going to continue to try to grow that business so we don’t view that as a negative. We’re generating lots of capital there, so.

And we’ll take our next question from Camilo Lyon with Canaccord Genuity.

Ed, if you could just give a little bit more detail on the components within your retail stores of the comp breakdown specifically on AUR and if there was anything that also influenced what you saw from that metric? Canaccord Genuity: Ed, if you could just give a little bit more detail on the components within your retail stores of the comp breakdown specifically on AUR and if there was anything that also influenced what you saw from that metric?

Sure, it’s a good question because while the traffic was weak and it did say it was the weakest in Q3, traffic has been weak all year and we’ve really made that up in the first part of the year through increased conversions and a little bit of AUR increase. And we did have dramatically improved conversion to get in Q3, but as opposed to the AUR improvement that we had in the first half, we had an AUR decline in retail in Q3. So, I think it’s a good thing to talk about. Where did that come from? Number one, I think it was the -- we had an impact from the Fashion Athletic category. Last year was really the height of the fashion sneaker trend in our stores and we were selling a lot of the web sneakers. Our AUR on that product was over $100, this year we’re still selling a fair amount of units, but the AUR is something like $40 less in that category. So that had a significant impact. Then in the casual and tailored part of the business, we also had a decline because there was a lot of smoking shoes I think kind of flat last year with a lot of rhinestones and Bling that -- it’s a type of embellishment coming at the higher AUR this year the Bling is not performing the way it was so we had an AUR decline in that category. Now we were hoping to make that up with booties, but as I pointed out because fall broke late in our stores in September, we’re still selling a lot of sandals, opened up footwear which is lower AUR, not as many booties. And so we were not able to make that up, and we had about a 4% AUR decline in our retail stores. Again, and I know I am beating dead horse here though. The booties have picked up dramatically over the last few weeks.

Could you then present a favorable comparison for the fourth quarter, is it more apples-to-apples on the AUR portion? Canaccord Genuity: Could you then present a favorable comparison for the fourth quarter, is it more apples-to-apples on the AUR portion?

I think we still could be down a little bit, and particularly because we are expecting it to be somewhat promotional. And we want to make sure that we’re competitive with everybody else out there.

My next question is on the Macy’s improvement that you’re seeing. Could you just talk about the number of table doors that you’re in? And the number of table doors that you think you can still get into in the fourth quarter and will that compare to last year? Canaccord Genuity: My next question is on the Macy’s improvement that you’re seeing. Could you just talk about the number of table doors that you’re in? And the number of table doors that you think you can still get into in the fourth quarter and will that compare to last year?

Yes sure, we’re at 260 table doors for fall, I believe we were in 230 for spring, and I would have to look back and see what we were a year ago. But the performance there has been very good. They are very pleased with our performance in the table doors. We had a smaller group of -- they were calling them sort of little table doors which have performed very well, which are going to graduate now to full table doors. And so overall, we are very pleased with the performance and again what’s nice is it’s not just what happened in Steven Madden but you’re also seeing Madden Girl grow as it doesn’t compete with Steven Madden in the same division, same department rather.

What is the total number of doors that you can have in your table to our presentation end, I am sure it’s not all doors, but I am sure it’s more than 260? Canaccord Genuity: What is the total number of doors that you can have in your table to our presentation end, I am sure it’s not all doors, but I am sure it’s more than 260?

It’s hard to know, I mean, we only want to do it where it’s going to be successful. So frankly I don’t this there is a huge focus on increasing the number of table doors right now it’s just making sure we get the right products, and then perhaps expanding the assortment in those existing doors.

And then just my final question is on accessories portion, could you give us what the dollar impact was from the shift out of Q3 and what we should expect it to be for Q4? Canaccord Genuity: And then just my final question is on accessories portion, could you give us what the dollar impact was from the shift out of Q3 and what we should expect it to be for Q4?

You know what I don’t know that dollar number off the top my head, but as I said, we expect that we can be year-over-year positive in that division. I would say to the tune of about low to mid single-digits on a percentages basis versus last year.

Total growth for the category in Q4? Canaccord Genuity: Total growth for the category in Q4?

Overall wholesale accessories.

And we’ll take our next question from Scott Krasik with BB&T Capital Markets.

Just a couple of questions on the guidance for the year, the sort of range 4.5% to 12% sales of $25 million, so what would be the swing factors either at the low-end to get the low-end or the high end? BB&T Capital Markets: Just a couple of questions on the guidance for the year, the sort of range 4.5% to 12% sales of $25 million, so what would be the swing factors either at the low-end to get the low-end or the high end?

I mean the biggest swing factor is always going to be retail. We have a much better visibility on the wholesale of course because we have the order file. Retail has been choppy this year and whatever our comp comes out that’s obviously going to -- there is some potential variance, that I don’t know about and then by $25 million we probably could have narrowed the range a little bit around that midpoint.

And then did you have a comp implied in the guidance if it’s there I missed it? BB&T Capital Market: And then did you have a comp implied in the guidance if it’s there I missed it?

We don’t disclose that.

And then I think you had previously guided to like 50 to 100 basis points of gross margin improvement for the year and then maybe you said it would be a little bit towards the low-end. Given what happened this quarter, do you still think you can grow gross margin by over 50 bps? BB&T Capital Market: And then I think you had previously guided to like 50 to 100 basis points of gross margin improvement for the year and then maybe you said it would be a little bit towards the low-end. Given what happened this quarter, do you still think you can grow gross margin by over 50 bps?

No, I think you have look for it to be flattish even maybe a touch down, based on what we have seen.

Okay, so then just make that up in SG&A? BB&T Capital Market: Okay, so then just make that up in SG&A?

And keep in mind it has been sort of three changes here; number one, our retail gross margin is just coming in lower than we anticipated, we have had to be a little bit more promotional; but number two, our retail sales are lower which is a mix negative; and number three, our private label wholesale revenues are much higher and that also a mix negative in terms of the gross margin.

And then just last, how do you think about this hyper growth in private label just given the market share at least that we see a target for example, I mean, can you still continue to grow at these very high rates and what would be a correct rate of growth then for wholesale footwear in the longer term? BB&T Capital Market: And then just last, how do you think about this hyper growth in private label just given the market share at least that we see a target for example, I mean, can you still continue to grow at these very high rates and what would be a correct rate of growth then for wholesale footwear in the longer term?

I mean look, we are very pleased with how much market share we have been able to take here. We are going to continue to focus on that business. I don’t -- certainly you have to expect that that business is going to slowdown at some point given the as you point out the big market share that we have already taken in some of the big customers. Yes, it’s going to slow, but I can’t give you a long-term number.

With just the total wholesale footwear are you targeting mid single-digit, high single-digit, growth rate? BB&T Capital Market: With just the total wholesale footwear are you targeting mid single-digit, high single-digit, growth rate?

For what period?

Just in general I mean based on where you sit with the department stores today, where you sit with the private label customers, how should we think about the businesses growth? BB&T Capital Market: Just in general I mean based on where you sit with the department stores today, where you sit with the private label customers, how should we think about the businesses growth?

Yes, so they are sort of medium term, I think mid to high singles is a good target for us.

And we’ll take our next question from Taposh Bari with Goldman Sachs.

Just wanted to I guess get some more color around just the wholesale trends, it seems like a lot of moving parts there. So just correct me if I am wrong, just wanted to kind of lay it out, looks like your branded footwear business is on plan, private label footwear better than expected, accessories you’ve got a bunch of timing delays with Cejon and some of the private label programs. Seems like the only think that’s really missed on the year is fashion belts, am I thinking about that correctly? Goldman Sachs: Just wanted to I guess get some more color around just the wholesale trends, it seems like a lot of moving parts there. So just correct me if I am wrong, just wanted to kind of lay it out, looks like your branded footwear business is on plan, private label footwear better than expected, accessories you’ve got a bunch of timing delays with Cejon and some of the private label programs. Seems like the only think that’s really missed on the year is fashion belts, am I thinking about that correctly?

Yes, I mean cold weather accessories is also down, but that was something we anticipated.

Yes and I guess you’re going to get some of that back in the fourth quarter, right? Goldman Sachs: Yes and I guess you’re going to get some of that back in the fourth quarter, right?

Yes, some of it, but I still expect that our Cejon business to be down modestly in the fourth quarter, not the same degree as it was in the third.

Okay, I guess a question that I am. Sorry go ahead. Goldman Sachs: Okay, I guess a question that I am. Sorry go ahead.

I was just going to say the shifts were really more in the handbag business.

I guess what I am trying to get at is, I mean it seems like you’re pretty optimistic around the footwear business, just kind of trying to better understand why not take revenue guidance up if a lot of this is shift related just conservatism on our end. And I guess I don’t know if you’re providing wholesale footwear revenue guidance for the fourth quarter or growth I know you gave accessories, but can you give us an idea of footwear, because as I try to get to your 6% to 8% growth for the year kind of introduce the pretty wide sort of expectations for wholesale footwear for the fourth quarter? Goldman Sachs: I guess what I am trying to get at is, I mean it seems like you’re pretty optimistic around the footwear business, just kind of trying to better understand why not take revenue guidance up if a lot of this is shift related just conservatism on our end. And I guess I don’t know if you’re providing wholesale footwear revenue guidance for the fourth quarter or growth I know you gave accessories, but can you give us an idea of footwear, because as I try to get to your 6% to 8% growth for the year kind of introduce the pretty wide sort of expectations for wholesale footwear for the fourth quarter?

Just, well number one, keep in mind retail is below our forecast for Q3 and we anticipate that it will be below our previous forecast for Q4. So that’s -- we had to make up some of that in wholesale footwear. And then in terms of sort of wholesale footwear growth for Q4 is that what you’re asking?

Yes. Goldman Sachs: Yes.

Yes I think in and around 10% is a reasonable target.

Okay, why would it be down from the 19 you just did? Goldman Sachs: Okay, why would it be down from the 19 you just did?

19 is not a sustainable rate we had for instance in this private label thing we have these huge reorders that hit the tail end of Q3. We are not anticipating we’re going to repeat in Q4.

Moving along just the cadence of the comp, I know you’d mentioned September was pretty, so I guess just going back when we last heard from you in July you’d said that things were mixed. Can you just talk about how things progressed throughout the month, I think you’d mentioned that September was the worst, but was August negative as well? And I guess just the kind of, I know you referred to traffic, but are you technically comping positive here in the month of October? Goldman Sachs: Moving along just the cadence of the comp, I know you’d mentioned September was pretty, so I guess just going back when we last heard from you in July you’d said that things were mixed. Can you just talk about how things progressed throughout the month, I think you’d mentioned that September was the worst, but was August negative as well? And I guess just the kind of, I know you referred to traffic, but are you technically comping positive here in the month of October?

Yes, so in terms of the progression in the quarter, in terms of comp July was down, August was close to flat and then September was down more than July. And then in terms of quarter-to-date comp we’re not going to disclose that.

And last one for you Ed, just capital allocation. So you’ve accelerated the pace of buybacks every quarter this year. Fourth quarter is historically your largest cash generating quarter. I guess how do we think about your capital allocation program at this point in the year? Goldman Sachs: And last one for you Ed, just capital allocation. So you’ve accelerated the pace of buybacks every quarter this year. Fourth quarter is historically your largest cash generating quarter. I guess how do we think about your capital allocation program at this point in the year?

At this point barring anything unforeseen I think you’ll see us continue roughly at the pace that we were at in Q3.

And we’ll take our next question from Jane Thorn Leeson with KeyBanc.

Thanks for taking my question, a lot of them have been answered but I just wanted more details or clarity on your handbag growth trajectory? KeyBanc Capital Markets: Thanks for taking my question, a lot of them have been answered but I just wanted more details or clarity on your handbag growth trajectory?

Okay, what specifically are you interested in?

Well, just where there is opportunity? I know that that was likely the biggest percentage of drivers just for the Company in general. KeyBanc Capital Markets: Well, just where there is opportunity? I know that that was likely the biggest percentage of drivers just for the Company in general.

Yes, yes so as we said, the branded handbag peace did well in the quarter. We pointed out Steve Madden was up 17%, so we continue to have nice momentum there. Betsy Johnson was up 5% and again that was particularly good because some of our and most of our shipping of our big holiday gifting program to Macy’s was shifted from Q3 last year to Q4 this year, so you should see that growth accelerate in Q4 in Betsy Johnson. And the only thing that was down in handbags was private label bags where the driver actually Big Buddha was down I apologize Big Buddha we’re struggling a little bit there we’ve made some management changes there and we hope to get that turned around. I think we have a bit of product issue there. But in private label we were down but that’s really a function of the timing of shipments and we were up big in Q2 in private label, we will be up big in Q4 in private label handbags, so nothing to worry about there.

And the sell-through at retail is the same as what it’s been? KeyBanc Capital Markets: And the sell-through at retail is the same as what it’s been?

Yes.

Okay. KeyBanc Capital Markets: Okay.

Actually honestly Betsy is the strongest right now, the Betsy is performing very well in retail.

And we’ll take our next question from Sam Poser with Sterne Agee.

Couple of questions, number one, with the private label business can we assume that the shortfall in the gross margin is made up from by leverage in the SG&A there because you don’t touch it? So from an operating margin perspective it really, it sort of bounces itself out? Sterne Agee: Couple of questions, number one, with the private label business can we assume that the shortfall in the gross margin is made up from by leverage in the SG&A there because you don’t touch it? So from an operating margin perspective it really, it sort of bounces itself out?

For the most part I mean, yes, the operating expense structure is much lower in private label. It probably still mixes you down a little bit in operating margin.

But it’s not as bad as what that gross margin differential would indicate? Sterne Agee: But it’s not as bad as what that gross margin differential would indicate?

That’s right.

And then secondly the department store, specifically Macy’s. I mean we have seen a lot of promotions out of the department stores these days and because the way their quarter ends a month after yours the give me markdown money mode goes into effect in October and then it goes back to effect in January. And I think they are more promotional than what we have seen. Are you planned sufficiently for them stepping up, given the promotional activity that look likes it’s significantly more than it was a year ago? Sterne Agee: And then secondly the department store, specifically Macy’s. I mean we have seen a lot of promotions out of the department stores these days and because the way their quarter ends a month after yours the give me markdown money mode goes into effect in October and then it goes back to effect in January. And I think they are more promotional than what we have seen. Are you planned sufficiently for them stepping up, given the promotional activity that look likes it’s significantly more than it was a year ago?

Yes, I mean keep in mind, that’s something that we’re monitoring with them every week. There are no surprises at the end of the season. We are working very closely with them at that, and we of course take appropriate reserves at the end of the quarter or whatever our markdown liability is with those guys.

So we could assume that your reserves at the end of Q3 were higher than you would have expected going into the quarter, given what’s been going on off late? Sterne Agee: So we could assume that your reserves at the end of Q3 were higher than you would have expected going into the quarter, given what’s been going on off late?

Yes, I would say that’s right.

And that’s one of the reasons for the dip down in that gross margin, as well, I would think. Sterne Agee: And that’s one of the reasons for the dip down in that gross margin, as well, I would think.

Yes, but it’s much more impactful with the private label thing.

Okay and then I mean, if they do step -- if that sort of a moving target, if they start stepping on the gas and get more promotional I mean, if sort of everybody pays there. So how do you handle a situation of that nature if it gets a little more promotional out there in the marketplace, as we get closer to Christmas and so on? Sterne Agee: Okay and then I mean, if they do step -- if that sort of a moving target, if they start stepping on the gas and get more promotional I mean, if sort of everybody pays there. So how do you handle a situation of that nature if it gets a little more promotional out there in the marketplace, as we get closer to Christmas and so on?

We do have some leverage with them. We are an important vendor with almost all of these guys. And there is a negotiation about that, particularly if we have items that are -- and products that’s moving well and that doesn’t necessarily require additional markdowns to push to get it out the door. Then that becomes a negotiation.

And lastly, you’re not really talking about 2014, but just from the gross margin perspective are we going to see this sort of, now that everything seems to have anniversaried each other. Are we going to sort of see the gross margin in the flattish range going forward, maybe up a little bit because of the increased growth of private label you get retail getting better. But seeing more of the EPS growth coming from SG&A leverage? Sterne Agee: And lastly, you’re not really talking about 2014, but just from the gross margin perspective are we going to see this sort of, now that everything seems to have anniversaried each other. Are we going to sort of see the gross margin in the flattish range going forward, maybe up a little bit because of the increased growth of private label you get retail getting better. But seeing more of the EPS growth coming from SG&A leverage?

Yes I mean I really want to postpone most of the discussion next year to the next call, but generally the way you’re speaking about it -- the way you are thinking about it makes sense.

And we will take our next question from Steve Marotta with CL King & Associates.

As it relates to the private label mix, it’s about 10% of overall consolidated sales, is that accurate? CL King & Associates: As it relates to the private label mix, it’s about 10% of overall consolidated sales, is that accurate?

Private label mix now it’s much bigger than that. Let’s say 25%, something like that.

Of total consolidated sales? CL King & Associates: Of total consolidated sales?

Yes.

As it relates to the direct sourcing initiative, can you talk about where you are there and where you were a year ago, and where you might be going on the legacy product? CL King & Associates: As it relates to the direct sourcing initiative, can you talk about where you are there and where you were a year ago, and where you might be going on the legacy product?

Sure. Yes, we are somewhere between 20% and 25% of the legacy products going direct, which is about 10% higher than where we were a year ago, which is essentially right on target. And we continue to be very pleased there. We think we are getting more consistency in quality and delivery. We think -- able to have much better monitoring of the factories in terms of their compliance with the social and environmental standards that we require. And we do think there is some gross margin benefit that we continue to get. The one caveat there is that we have had to step-up what we spend in terms of QC people, and people really feet on the ground to get into the factories and monitor them for social environmental compliance. And that is chewing up a little bit of that gross margin benefit.

And where do you expect to be next year there? CL King & Associates: And where do you expect to be next year there?

We will add another 10% next year.

And lastly, can you comment on e-commerce in the third quarter. Did it trend similar to your company-owned doors, but e-commerce is national, so did it trend closer to your wholesale? CL King & Associates: And lastly, can you comment on e-commerce in the third quarter. Did it trend similar to your company-owned doors, but e-commerce is national, so did it trend closer to your wholesale?

No, e-commerce was down modestly in the quarter. It was actually more similar to our performance in the retail stores. And we are having a little bit of a traffic challenge there as well. So we’ve started to do some additional things to try to drive traffic, some additional online marketing et cetera. And we actually changed our shipping offer a few weeks ago, went to free shipping with no hurdle. I mean that’s really started to drive some nice traffic there and we’re seeing a real nice pickup recently on our website. And then, I think the most important thing going on there is that in January we will be launching our new e-commerce platform. And that’s going to do a whole bunch of things. It’s going to enable us to improve the experience a lot on mobile and tablets. We’re going to be able to offer expedited shipping. We are going to have better integration with our social media platforms. The product imagery is going to be a lot better. We will have 360 degree views. We will have distributed functionality. All sorts of additional feature and functionality that we think will help give us a little bit of a, or help drive some improvement in that business.

And we'll take our next question from Jeff Van Sinderen with B. Riley Investments.

Ed I know you spoke into Macy's and just wondering what you are hearing from some of your other retail partners on the cadence of their business, sell-throughs of your product versus competitors' maybe. Does it seem to kind of mere what you are hitting from Macy's, does it mere what you are seeing in your own retail stores, how does it differ, just trying to get a sense of that. And then also anything you can give us in terms of what you have been seeing most recently in wholesale orders. Anymore color there? Thanks. B. Riley & Co: Ed I know you spoke into Macy's and just wondering what you are hearing from some of your other retail partners on the cadence of their business, sell-throughs of your product versus competitors' maybe. Does it seem to kind of mere what you are hitting from Macy's, does it mere what you are seeing in your own retail stores, how does it differ, just trying to get a sense of that. And then also anything you can give us in terms of what you have been seeing most recently in wholesale orders. Anymore color there? Thanks.

Yes, well I mean I think overall the retailer’s sentiments is somewhat cautious, everybody has been dealing with some challenging traffic trends. Spring was a tough season. Back-to-school wasn't great. So you have had a -- and it's been a somewhat tough year. The good news is everybody is reporting that they are feeling -- that they are seeing better trends over the last few weeks and particularly within footwear you have seen a nice improvement in booties and boots. So that gives people some hope, but overall I would say the retailers are fairly cautious.

And then just to clarify on the promotional levels because I know that’s also been a topic of discussion this morning. And obviously you expect Q4 to be promotional. But do you think that overall the environment will be more promotional than last year? Do you expect to be more promotional than last year? Just trying to get a gauge on that or if you are thinking more long or kind of flat promotional levels or what have you? B. Riley & Co: And then just to clarify on the promotional levels because I know that’s also been a topic of discussion this morning. And obviously you expect Q4 to be promotional. But do you think that overall the environment will be more promotional than last year? Do you expect to be more promotional than last year? Just trying to get a gauge on that or if you are thinking more long or kind of flat promotional levels or what have you?

We'll say flat to up. In our own stores we're expecting to be slightly more promotional than we were a year ago. And I think we're bracing for that in the wholesale channel as well.

And then finally maybe you can just touch a little bit more on international and what's driving the growth there and the outlook there. B. Riley & Co: And then finally maybe you can just touch a little bit more on international and what's driving the growth there and the outlook there.

Yes. International is something we're really excited about, as you know that’s perhaps our, in our minds perhaps our biggest long-term growth opportunity. And we're doing -- we had an excellent quarter there, we’re doing really well with our partner in Asia, which we think is probably our biggest opportunity at least on the partner front. Our partner there is GRI, they have 32 stores at the beginning of the year and I think they are going to end with 50, Preston and Steve Madden stores and the stores are also comping very, very well. We're really pleased with what we're seeing there. We're also seeing big growth with our partner in the UAE and particularly in Dubai of course. And then we're also really pleased with what we see in Latin America, Mexico in particular had a great quarter most recently and we're happy there. That's all in the partner front. And then Canada is doing very well also, now we added another store in Canada, so we have now doubled the store base from 7 to 14 since we acquired it that store opened in Vancouver. And so we're getting about -- I think retail is up north of 30% in Canada in Q3, and then wholesale was also up low double-digits. As they grow with the bag up there as well as introduce handbags.

And we'll take our next question from Danielle McCoy with Brean Capital.

I was wondering if you can give us a little bit of an update on how lounge wear, watches and jewelry is doing? Brean Capital: I was wondering if you can give us a little bit of an update on how lounge wear, watches and jewelry is doing?

Lounge wear, the sell throughs have slowed up a little bit, so we're trying to work with the licensee to figure out what we need to do there. Jewelry hit stores in Q3 and the initial reads there have been very good, both from the department stores and also we’re pleased with how it's doing in our own stores, it hit our own stores about a month ago and we have gotten about 20 doors and we're pleased with the initial reads there. And then watches just hit the wholesale channel at the beginning of this month, we don't have great reads there yet. And we also put it online for us and in one store, but that's brand new.

And I guess just an update on how you guys are viewing the M&A market? Brean Capital: And I guess just an update on how you guys are viewing the M&A market?

We're always still out there looking, but there is nothing to report at the moment.

And then just lastly housekeeping question, tax rate going forward it was a little higher in third quarter and then how should we look at it for the rest of the year and into next? Brean Capital: And then just lastly housekeeping question, tax rate going forward it was a little higher in third quarter and then how should we look at it for the rest of the year and into next?

Yes I think 36.5 where it was in Q3 is the right rate to use for now.

And we'll take our next question from Mike Richardson with Sidoti Research.

Most of my questions have been answered but I just have two quick ones for you. Has there been any pick up in cold weather accessories in October or is that mainly just the boots and booties? And then if you can just let us know how much is left on that share repurchase plan I would appreciate it. Thanks. Sidoti & Company: Most of my questions have been answered but I just have two quick ones for you. Has there been any pick up in cold weather accessories in October or is that mainly just the boots and booties? And then if you can just let us know how much is left on that share repurchase plan I would appreciate it. Thanks.

Sure. Cold weather accessories has picked up in terms of sell through over the last few weeks. So, that’s something we’re happy about. And then in terms of the share repurchase I think we have around $90 million left right now.

And we’ll take our next question from Chris Svezia with Susquehanna Financial.

So I have a quick question. I just want to understand something just on the boot business and how you’re thinking about it for the fourth quarter. I mean obviously it seems like you sold in pretty well and I am just curious what your thoughts are as it pertains to reorder activity as you think about fourth quarter. Obviously to some degree the business has picked up so I’m just sort of curious how you’re thinking about that for your brand for the fourth quarter, up versus last year down or flat versus last year? Susquehanna Financial: So I have a quick question. I just want to understand something just on the boot business and how you’re thinking about it for the fourth quarter. I mean obviously it seems like you sold in pretty well and I am just curious what your thoughts are as it pertains to reorder activity as you think about fourth quarter. Obviously to some degree the business has picked up so I’m just sort of curious how you’re thinking about that for your brand for the fourth quarter, up versus last year down or flat versus last year?

I think it will be in line with last year, we had a pretty good reorder activity last year and we’ve got some nice reorder business this year as well, particularly with some of our big bootie items. And we’ve also got some tall shaft boots that are doing very well and then become reorders.

Do you feel like retailers should have under inventoried on tall shafted just given what happened last year and coming back a little bit to replenish on that side? Susquehanna Financial: Do you feel like retailers should have under inventoried on tall shafted just given what happened last year and coming back a little bit to replenish on that side?

Yes. I think there was an -- one of the reasons that we’ve done well in that category so far, this year I think is because it’s a little bit of supply and demand everybody as these booties. And there was not as much supply of tall shaft boots this year from the market.

And then any -- I know it’s not a big piece at the moment by just given the focus on boots but any color on the dress business and I think it has been called out your dress business has been pretty good. There has been some movement into casual I think on the retail side, but just any thoughts about how healthy maybe the dress business for you guys? Susquehanna Financial: And then any -- I know it’s not a big piece at the moment by just given the focus on boots but any color on the dress business and I think it has been called out your dress business has been pretty good. There has been some movement into casual I think on the retail side, but just any thoughts about how healthy maybe the dress business for you guys?

Yes. Dress is very good for us, that’s in fact I should have mentioned that earlier because that’s really other than boots and booties that’s the important category for us right now. We’re doing very well with that we continue to do well with anything with ankle interest, a strap around the ankle or something like that both platform and single sole are working for us so we’re pleased with what we see in the dress category.

And then just lastly I don’t know what color you can add to this but just as you think about spring and your conversations with retailers given what happened this year to sort of a slow start to spring, how are they thinking about product delivery for spring coming into the season versus last year. Are they willing to hold off a little bit, wait and see or is it kind of business as usual, just any color on that? Susquehanna Financial: And then just lastly I don’t know what color you can add to this but just as you think about spring and your conversations with retailers given what happened this year to sort of a slow start to spring, how are they thinking about product delivery for spring coming into the season versus last year. Are they willing to hold off a little bit, wait and see or is it kind of business as usual, just any color on that?

I think it’s basically business as usual, although I will repeat that I think that overall the retailers are somewhat cautious right now, given what’s happened this year.

And we’ll take our next question from Camilo Lyon with Canaccord Genuity.

Just a quick follow-up, did you actually give the gross margin degradation from private label? Canaccord Genuity: Just a quick follow-up, did you actually give the gross margin degradation from private label?

So, I have that what the impact was to the consolidated. The mix -- the increase or the impact from the increased -- the mixed impact from the increase in private label footwear was 120 basis point impact to the consolidated gross margin.

So that really speaks to the main driver of it, not so much any change in how the department stores are viewing markdown allowances from you? Canaccord Genuity: So that really speaks to the main driver of it, not so much any change in how the department stores are viewing markdown allowances from you?

No. That was a very minor factor.

And then just lastly on the dress category, the strength that you’re seeing there are your wholesale partners also buying into that strength or is that just a strength you’re seeing in your retail stores that the department stores are still hesitating on committing to orders in that category? Canaccord Genuity: And then just lastly on the dress category, the strength that you’re seeing there are your wholesale partners also buying into that strength or is that just a strength you’re seeing in your retail stores that the department stores are still hesitating on committing to orders in that category?

It’s working in both retail and wholesale and the wholesale customers are -- they are on it.

And we’ll take our last question from Sam Poser with Sterne Agee.

You talked about the different trends that were going on last year, and are there less newer trends this year than they were a year ago. I mean how is that looking, and it sounds to me like the comment that you mentioned that everybody have the booties this year and stuff. Is there sort of a research for that big idea or is everybody on one big thing rather than a broader base of larger ideas a year ago, if that makes sense? Sterne Agee: You talked about the different trends that were going on last year, and are there less newer trends this year than they were a year ago. I mean how is that looking, and it sounds to me like the comment that you mentioned that everybody have the booties this year and stuff. Is there sort of a research for that big idea or is everybody on one big thing rather than a broader base of larger ideas a year ago, if that makes sense?

Yes I would say that compared to last year there is probably a little bit less newness or fewer trends to capitalize on. That’s why we really like the dress, what we’re seeing in dress because that’s something that wasn’t good last year, that’s new this year. And then we’ve got some other things that we’re working on that we feel pretty good about and we have got a good reason and we’ve got a low profile sneaker and pony hair that we’re going to be delivering in about a month to wholesale that we think it’s going to be unbelievable we’ve got very strong reason on that. So, there is some newness that we’re working on but I think that you’re right for the season overall that was probably a little bit less to work with in terms of trend.

And that does conclude our question-and-answer session. I would now like to turn the conference back over to Mr. Ed Rosenfeld for any closing or additional remarks.

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

And that does conclude today’s conference. We thank you for your participation.