US firm Skechers' sales soar 7.8% in Q3 FY23

Wholesale sales faced a decline of $17 million, or 1.4 per cent, which includes an 8.3 per cent decrease in Europe, Middle-East, and Africa (EMEA) and a 0.5 per cent decrease in Americas (AMER). However, this was partially offset by a 7.1 per cent growth in Asia Pacific (APAC). The company also noted a 10.8 per cent decrease in wholesale volume, while the average selling price saw a rise of 10.3 per cent, the company said in a press release.

DTC sales, on the other hand, surged by $163.6 million, or 23.8 per cent. This included notable growth in all regions: 17.3 per cent in AMER, 24.2 per cent in APAC, and an impressive 60.8 per cent in EMEA. DTC volume increased by 18.8 per cent, and the average selling price rose by 4.3 per cent.

Gross margin for the quarter was 52.9 per cent, up by 590 basis points, primarily driven by higher average selling prices, a greater proportion of DTC sales, and lower freight costs.

Earnings from operations increased by a significant $83.2 million, or 64 per cent, standing at $213.2 million and resulting in an operating margin of 10.5 per cent. Net earnings amounted to $145.4 million, with diluted earnings per share at $0.93, compared to last year's $85.9 million and $0.55 respectively.

For the first nine months of FY23, the company reported an 8.5 per cent increase in overall sales. This was reflective of a 15.6 per cent increase in international sales, despite a 1.1 per cent decrease in domestic sales. On a constant currency basis, the growth rate was 9.6 per cent.

Wholesale sales were down $41.0 million, or 1.1 per cent in the first nine months of FY23, owing to an 11.4 per cent decline in AMER, which was partially compensated by increases of 14.5 per cent in APAC and 6.2 per cent in EMEA. The wholesale volume declined by 8.5 per cent, while the average selling price rose by 7.8 per cent.

DTC sales for the first nine months of FY23 period grew by $514.6 million, or 26 per cent. The volume increased by 22.9 per cent, and the average selling price was up by 2.5 per cent.

The gross margin for the nine months was 51.5 per cent, an increment of 470 basis points. Earnings from operations jumped to $654.5 million, resulting in an operating margin of 10.8 per cent. Net earnings stood at $458.6 million, with diluted earnings per share increasing by 54.2 per cent over the prior year.

“Skechers’ record quarterly sales and robust earnings growth demonstrate the sustained momentum of our brand. Coupled with a significant improvement in working capital, especially in our overall inventory levels, we remain confident in the strength of our brand and demand for our comfort technology products,” said John Vandemore, chief financial officer of Skechers. “As we continue to execute against our long-term growth strategy, we believe we remain well positioned to accomplish our objective of generating $10 billion in sales by 2026.”

Fibre2Fashion News Desk (DP)