Skechers Posts Quarterly Earnings Beat as It Returns to Growth in ‘Many’ Markets
Skechers USA Inc. delivered a stronger-than-anticipated quarterly earnings report as it rebounded in certain global markets and saw notable sales gains for its casual shoe styles.
The performance and lifestyle brand posted adjusted earnings of 53 cents per share, versus the prior year’s earnings of 67 cents per share. Wall Street had forecasted earnings of 36 cents per share. Revenues also declined 3.9% to $1.3 billion but topped analysts’ expectations of $1.22 billion.
According to the Manhattan Beach, Calif.-based company, revenues were impacted by a 4.1% drop in its international business — driven by lower distributor and retail sales — and a 3.7% decrease in its domestic business. However, its performance in the United States market was partially offset by a 172.1% surge in e-commerce sales.
“Our third-quarter sales were a significant accomplishment during a challenging period,” COO David Weinberg said in a statement. “We also saw a return to growth in many markets and a positive sequential trend in the quarter with September being our strongest month.”
The company said its domestic wholesale business returned to mid-single-digit growth, with sales advancing 6.3%, while international markets such as China, Germany and Australia recorded double-digit increases. Overall direct-to-consumer comps fell 22.1%, including respective dips of 20.4% and 26.1% domestically and internationally.
In a statement, CEO Robert Greenberg shared that Skechers’ men’s and women’s athletic casual footwear and sandal styles experienced the strongest growth among its offerings.
“As we continued to navigate through the global pandemic in the third quarter, we capitalized on our core strengths of comfort, style, innovation and quality at a reasonable price,” he added. “Whether people continue to work remotely or return to their offices, we offer them a brand they know and trust to deliver the comfort they want.”
What’s more, the three-month period saw the launch of Skechers’ buy online, pick up in store and curbside pickup services at stores across the United States. It also opened 24 company-owned outposts, including flagship locations on Rue de Rivoli in Paris, Oxford Circus in London, Shinjuku in Tokyo, plus two stores in Colombia — bringing its brick-and-mortar fleet count to 3,770 stores.
At the end of the quarter, the brand had cash, equivalents and investments that totaled $1.5 billion. It opted against providing an outlook for the full year, given the “ongoing business disruption and substantial uncertainty” stemming from the coronavirus pandemic.
“Despite this difficult year, we believe our focus on building our digital initiatives and supply chain, while delivering comfortable footwear globally, will result in an even stronger brand as the world continues to normalize,” Weinberg explained.