Skechers posts strong sales and earnings growth in Q2

Second quarter sales at Skechers USA, Inc., the company said, grew 10.9 percent as a result of a 19.8 percent increase in the company’s international business and 1.5 percent in its domestic business. On a constant currency basis, sales increased 13.7 percent. Earnings from operations increased 29.7 million dollars or 36.5 percent to 111.1 million dollars.

“As the world continues to become closer and digital becomes a critical means of communicating and embracing trends to tell your brand’s story, it’s no longer what is happening in one market that matters; it’s what’s happening across all markets. We’re continuing to strategically view our business with a global lens as trends are traveling faster,” stated Robert Greenberg, Chief Executive Officer of Skechers in a statement.

Highlights of Skechers’ Q2 results

By segments, the company said, international wholesale business increased 18.2 percent, its company-owned global direct-to-consumer business increased 14.4 percent, while the domestic wholesale business decreased 3.8 percent.The company added that comparable same store sales in company-owned stores and e-commerce increased 4.9 percent, including 4.2 percent in the United States and 6.7 percent internationally.

Gross margins decreased as a result of promotional efforts to clear seasonal merchandise in select international markets, which was partially offset by higher domestic margins from improved retail pricing and product mix in direct-to-consumer and domestic wholesale businesses. Net earnings were 75.2 million dollars and diluted earnings per share were 49 cents.

“We experienced growth in every region, with the biggest dollar increases coming from India, the Middle East and China, as well as in Mexico with the conversion of the business to a joint venture. In our direct-to-consumer channels, we saw monthly sales increases in the quarter, an upward trend that’s continuing in July. Based on feedback from recent account meetings, we are seeing a similar trend within our domestic wholesale business in June and July and continue to believe we’ll have a stronger back half of the year,” added David Weinberg, Chief Operating Officer of Skechers.

Skechers’ H1 sales increase 6.3 percent

For the six-month period, Skechers added that sales grew 6.3 percent, or 9.3 percent on a constant currency basis. By segments, the company’s international wholesale business increased 12.9 percent, its company-owned direct-to-consumer business increased 11 percent, while its domestic wholesale business decreased 7.7 percent. The company’s international business grew 14.2 percent while its domestic business decreased by 2.5 percent.

Earnings from operations increased 46.7 million dollars or 20.3 percent, to 276.9 million dollars. Net earnings were 183.9 million dollars and diluted earnings per share were 1.19 dollars.

For the third quarter of 2019, the company believes it will achieve sales in the range of 1.325 billion dollars to 1.350 billion dollars, and diluted earnings per share of 65 cents to 70 cents, based on expected growth in each of the company’s three segments. The company expects its full-year effective tax rate to be between 17 and 20 percent.

Picture:Facebook/Skechers