UPDATE 2-Steven Madden shares jump on forecast for better margins
* Q2 EPS $0.61 vs est. $0.63
* Q2 sales $288.7 mln vs est. $281.7 mln
* Raises FY12 EPS view to $2.67 to $2.77, vs est. $2.67
* Sees margins recovering in second half of 2012
* Shares rise 21 pct
By Ranjita Ganesan
July 26 (Reuters) - Steven Madden Ltd's quarterly profit missed Wall Street estimates for the first time in more than two years but a forecast by the shoemaker for margins to recover in the second half of the year sent its shares up as much as 21 percent.
Shares of Steve Madden, known for its thick, chunky-heeled shoes, n otched their biggest percentage gain in more than 6 years. They were up $4.89 at $37.68 in midday trading on the Nasdaq.
The company's margins slipped over the past few quarters as it acquired private-label companies such as Topline Corp and Cejon that sell at lower prices.
However, those businesses, which supply store-branded products to retailers including Target Corp, has been driving robust sales growth.
The private-label business could also help profits in future as the low-priced segment was less susceptible to markdowns, said C.L. King & Associates analyst Steven Marotta.
Steven Madden forecast a modest margin improvement in the second half of 2012, compared with a year earlier. Its gross margins have slipped to 36.1 percent for the quarter ended June 30 from 40.2 percent in the same period last year.
Marotta also picked strong growth for Steven Madden's boots for the rest of the year.
"The Nordstorm anniversary sale that's held in late July tends to be a harbinger for back-to-school and holiday trends and Steven Madden boots performed really well there."
Long Island City, New York-based Steven Madden raised its profit forecast for the full year, citing a tax benefit related to its foreign operations.
The shoemaker expects 2012 per-share earnings of $2.67 to $2.77, up from its earlier range of $2.62 to $2.72.
Sales at the company, founded by designer Steve Madden in 1990, rose 38 percent to $288.7 million in the second quarter, helped by strong wholesale revenue.
Analysts on average had expected revenue of $281.7 million, according to Thomson Reuters I/B/E/S.
Quarterly profit rose to $26.9 million, or 61 cents per share, from $23.8 million, or 55 cents per share, a year earlier.
Analysts had expected earnings of 63 cents per share.