Skechers reports strong growth in Q3 sales and earnings

Skechers reported third quarter sales of 2.35 billion dollars, a 15.9 percent increase over the same period last year.

For the fourth quarter, the company expects to achieve sales between 2.165 and 2.215 billion dollars and diluted earnings per share of between 70 cents and 75 cents.

For fiscal 2024, Skechers expects sales to be between 8.925 and 8.975 billion dollars and diluted earnings per share of between 4.20 dollars and 4.25 dollars.

Commenting on the third quarter results, David Weinberg, COO of Skechers said in a release: “Despite challenging market conditions in certain countries, we achieved 21 percent wholesale growth, 10 percent direct-to-consumer growth, as well as 16 percent internationally and 15 percent domestically.”

Highlights of Skechers Q3 performance

The company’s wholesale sales grew 241.4 million dollars or 20.6 percent including increases in AMER of 21.6 percent, EMEA of 30.9 percent, and APAC of 5.1 percent.

Direct-to-consumer sales grew 81.3 million dollars or 9.6 percent, including increases in EMEA of 28 percent, APAC of 10 percent, and AMER of 5 percent.

Gross margin was 52.1 percent, a decrease of 80 basis points. Earnings from operations increased 20.2 million dollars or 9.5 percent to 233.4 million dollars.

Net earnings increased to 193.2 million dollars and diluted earnings per share were 1.26 dollars.

“Skechers’ significant growth in the third quarter can be attributed to offering the right product at the right price and ensuring availability at locations where consumers want to shop – whether it’s in our own direct-to-consumer channels or with our network of key retailers,” added Robert Greenberg, CEO of Skechers.

Review of Skechers year-to-date results

The company’s year-to-date sales increased 11.9 percent, reflecting a 12.9 percent increase in international sales and a 10.3 percent increase domestically. Wholesale increased 12.1 percent and direct-to-consumer increased 11.6 percent. On a constant currency basis, sales increased 12.7 percent.

Wholesale sales increased 427.6 million dollars or 12.1 percent, due to increases in AMER of 12.5 percent, EMEA of 15.5 percent, and APAC of 6.1 percent. Direct-to-consumer sales grew 289.9 million dollars or 11.6 percent, due to increases in EMEA of 40.3 percent, APAC of 10.5 percent, and AMER of 6.2 percent.

Gross margin was 53.1%, an increase of 160 basis points, earnings from operations increased 84.3 million dollars to 738.8 million dollars, resulting in an operating margin of 10.9 percent. Net earnings were 540.1 million dollars and diluted earnings per share were 3.50 dollars, an increase of 19.5 percent over the prior year.