Skechers posts strong Q2 sales and earnings results

Skechers U.S.A., Inc. second quarter sales increased 7.7 percent as a result of a 17.9 percent increase internationally and a 4.6 percent decrease domestically. On a constant currency basis, sales increased 9.1 percent.

For the third quarter of 2023, the company expects to report sales between 1.95 billion dollars and 2 billion dollars and diluted earnings per share between 70 cents and 75 cents.

For the fiscal year 2023, the company expects to achieve sales between 7.95 billion dollars and 8.1 billion dollars and diluted earnings per share of between 3.25 dollars and 3.40 dollars.

“Skechers second quarter results set a new quarterly sales record of 2.01 billion dollars. This achievement continues to reflect the global demand for our comfort technology products, evidenced by double- or triple-digit sales growth in most markets. We saw increases of 20 percent in APAC, including 19 percent in China and 27 percent in India, as well as 16 percent in EMEA, including 29 percent in Germany and 13 percent in the UK,” said David Weinberg, chief operating officer at Skechers.

Highlights of Skechers Q2 results

The company’s wholesale sales declined 67.3 million dollars or 5.9 percent, which includes a decrease in AMER of 18.7 percent, partially offset by increases in APAC of 14.3 percent and EMEA of 7.4 percent.

Direct-to-consumer sales grew 212 million dollars or 29.1 percent, which includes increases in AMER of 28.2 percent, APAC of 25.1 percent, and EMEA of 47.2 percent.

Gross margin was 52.7 percent, an increase of 460 basis points,while earnings from operations increased 63.5 million dollars or 41.2 percent to 217.7 million dollars.

Net earnings were 152.8 million dollars and diluted earnings per share were 98 cents compared with prior year net earnings of 90.4 million dollars and diluted earnings per share of 58 cents.

“The second quarter marked yet another sales record and a new milestone as we made the Fortune 500 list of largest companies, a testament to the strength of our brand and the dedication of our entire organisation to consistently create, innovate and meet the footwear needs of consumers,” added Robert Greenberg, chief executive officer of Skechers.

Review of Skechers year-to-date results

The company’s year-to-date sales increased 8.9 percent reflecting a 19.5 percent increase in international sales and a 4.7 percent decrease domestically.

Direct-to-consumer increased 27.1 percent and wholesale decreased 1 percent. On a constant currency basis, sales increased 11.1 percent. Wholesale sales decreased 24 million dollars or 1 percent due to a decrease in AMER of 15.9 percent, partially offset by increases in EMEA of 14.6 percent and APAC of 19.2 percent.

Direct-to-consumer sales grew 351 million dollars or 27.1 percent, due to increases in AMER of 28.4 percent, APAC of 21.7 percent and EMEA of 40.4 percent.

Gross margin was 50.8 percent, an increase of 410 basis points, earnings from operations increased 111.2 million dollars to 441.3 million dollars and net earnings were 313.2 million dollars with diluted earnings per share of 2 dollars, an increase of 48.1 percent over the prior year.