American brand Skechers announces record sales of $1.87 bn in Q2

All segments experienced growth, with wholesale increasing 18.3 per cent and direct-to-consumer increasing 4.3 per cent. On a constant currency basis, sales increased 16.4 per cent. Wholesale sales growth of $176.1 million, or 18.3 per cent, was led by increases in AMER of 34.9 per cent. Wholesale volume increased 14.8 per cent, while average selling price increased 3.1 per cent, the company said in a press release.

The company’s direct-to-consumer sales growth of $29.8 million, or 4.3 per cent, was led by increases in AMER of 3.7 per cent, EMEA of 13.5 per cent, and APAC of 2.7 per cent. Direct-to-consumer average selling price increased 5.3 per cent and volume was essentially flat. Its gross margin was 48.1 per cent, a decrease of 330 basis points, primarily driven by higher per unit freight costs partially offset by average selling price increases.

Operating expenses increased $91 million, or 14 per cent, and as a percentage of sales, increased 50 basis points to 39.8 per cent from 39.3 per cent in the prior year. Selling expenses increased $25.1 million, or 17.8 per cent, due to higher global demand creation expenditures. General and administrative expenses increased $65.9 million, or 12.9 per cent, primarily due to volume-driven increases in labour and warehouse and distribution expenses, as well as higher rent.

Skechers’ earnings from operations decreased $47 million, or 23.4 per cent, to $154.2 million and net earnings were $90.4 million.

“Skechers continued the diligent execution of our long-term global growth strategy, achieving record quarterly sales primarily from continued strength in our wholesale segment,” stated John Vandemore, chief financial officer of Skechers. “Despite pandemic-related lockdowns, disruptions in our global supply chain and macroeconomic volatility, we remain focused on our direct-to-consumer capabilities, distribution infrastructure and deepening connections with our consumers in order to drive long-term growth and shareholder value.”

The company’s year-to-date sales increased 19.1 per cent reflecting a 21.4 per cent increase in domestic sales and a 17.3 per cent increase in international sales with the largest contribution derived from wholesale sales. Both segments experienced increases, with wholesale increasing 25.4 per cent and direct-to-consumer increasing 9 per cent. On a constant currency basis, the company’s total sales increased 22.1 per cent, the release added.

Wholesale sales growth of $484.3 million, or 25.4 per cent, was led by increases in AMER of 38.2 per cent and EMEA of 24 per cent. Wholesale volume increased 18.8 per cent and average selling price increased 5.9 per cent. Direct-to-consumer sales growth of $106.8 million, or 9 per cent, was led by increases in AMER of 6.8 per cent, EMEA of 44.2 per cent, which experienced COVID restrictions in the prior year, and APAC of 5.3 per cent. Direct-to-consumer average selling price increased 9.4 per cent resulting from reduced promotions and higher prices.

Year-to-date gross margin of Skechers was 46.7 per cent, a decrease of 300 basis points, primarily driven by higher per unit freight costs partially offset by average selling price increases. Operating expenses increased $211.3 million or 17.9 per cent. The company’s earnings from operations decreased $28.8 million to $330.1 million, while its net earnings were $211.6 million.

For the third quarter of 2022, the company believes it will achieve sales between $1.80 billion and $1.85 billion and diluted earnings per share of between $0.70 and $0.75. Further, it expects that for FY22, it will achieve sales between $7.2 billion and $7.4 billion and diluted earnings per share of between $2.60 and $2.70.

Fibre2Fashion News Desk (KD)