Skechers Q3 Profit More Than Doubles on Strong Sales

In Industry News, What's New by Jeff Prine

SkechersManhattan Beach, CA—Skechers USA reported Wednesday afternoon that its third quarter profit more than doubled as sales rose across categories, but the results still missed analysts’ estimate.

For the quarter ended Sept. 30, the footwear and accessories company posted net income of $26.8 million, or 53 cents a share, compared with net income of $11 million, or 22 cents a share, a year ago. Analysts had expected earnings of 61 cents a share.

Net revenue rose 20% to $515.8 million in line with analysts estimate for $518.2 million.

‘Strong Demand for Foreseeable Future’

The company’s U.S. wholesale sales were up 30.1%, reflecting a 25.2% increase in pairs shipped along with a 3.9% average price increase across men’s, women’s and kids division.

International sales rose 5.8% but distributor sales declined 17.3% due in part to touch macroeconomic conditions in Spain and Italy. However, China, Chile, Canada, Hong Kong, Malaysia and Singapore continued strong growth.

In its retail division, sales were up 19.8% with comparable store sales up rising 16.9%. U.S. retail sales rose 19.5% with a 17.3% increase in comp sales.

Licensing revenue, including eyewear, socks and backpacks, posted $1.6 million for the quarter.

The company’s e-commerce also posted a 30.3% rise in sales.

Gross profit soared: rising 22.7% to $230.5 million due to higher sales volume. Gross margin widened 100 basis points to 44.7%.

Noting the October thus far as had some of the strongest incoming orders, David Weinberg, chief financial officer/chief operating officer, said, “We believe the strong demand for our many product categories will continue into the foreseeable future.”