Skechers Q4 sales improve 24.4 percent, earnings jump

Fourth quarter sales at Skechers increased 24.4 percent as a result of a 9.8 percent increase in domestic sales and a 34 percent increase in international sales.

Domestic and international growth, the company said in a release, was driven by increases in both wholesale and direct-to-consumer, with the largest improvement attributable to international wholesale. On a constant currency basis, the company’s total sales increased 24.5 percent.

Earnings from operations increased 35.4 million dollars to 93.1 million dollars, an increase of 61.2 percent. Net earnings were 402.4 million dollars and diluted earnings per share were 2.56 dollars, while adjusted diluted earnings per share were 43 cents.

“Skechers’ focus on delivering signature comfort technology in our products resulted in record 2021 sales,” began Robert Greenberg, chief executive officer of Skechers, adding, “We believe our accomplishments in 2021, including several comfort-focused new product launches and the further expansion of our global footprint, position Skechers for continued growth toward our goal of 10 billion dollars in sales.”

Review of Skechers’ Q4 performance

The company added that fourth quarter sales grew across all segments with increases to domestic wholesale of 4.6 percent, international wholesale of 30.1 percent and direct-to-consumer of 30.3 percent.

International wholesale increases were driven by growth of 123.5 percent in distributor sales, 61.3 percent in Europe and 8.6 percent in China. Improvements in direct-to-consumer sales resulted from growth across domestic and international retail stores, driven by a double-digit increase in average selling price resulting from reduced promotions and higher prices.

Direct-to-consumer comparable same store sales increased 21.1 percent, driven by an increase of 15.2 percent domestically and 35.5 percent internationally.

Gross margin was 48.6 percent, a decrease of 30 basis points, primarily driven by higher freight costs.

Highlights of Skechers’ full year results and outlook

Full year sales increased 36.7 percent reflecting a 33.4 percent increase in domestic sales and a 39 percent increase in international sales with the largest contribution derived from international wholesale growth. On a constant currency basis, the company’s total sales increased 33.7 percent.

Sales grew across all segments with increases to domestic wholesale of 27.6 percent, international wholesale of 34 percent and direct-to-consumer of 50.2 percent, as the impact of Covid-19 continued to ease.

The company further said that international wholesale recorded growth in China of 35 percent and Europe of 23.6 percent. Direct-to-consumer comparable same store sales increased 38 percent, driven by an increase of 39.5 percent domestically and 34.1 percent internationally.

Gross margin increased 170 basis points to 49.3 percent, while earnings from operations increased 464.5 million dollars to 598.2 million dollars. Net earnings were 741.5 million dollars and diluted earnings per share were 4.73 dollars, while adjusted diluted earnings per share were 2.59 dollars.

For the first quarter of 2022, the company believes it will achieve sales between 1.675 billion dollars and 1.725 billion dollars and diluted earnings per share of between 70 cents and 75 cents. Further, the company expects to achieve sales between 7 billion dollars and 7.2 billion dollars and diluted earnings per share of between 2.70 dollars and 2.90 dollars.