Dive Brief:
- Skechers reported record first quarter sales of $2.25 billion, a 12.5% year-over-year increase, according to an earnings release Thursday.
- The company’s wholesale segment grew almost 10% year over year, marking a sharp contrast to the previous three consecutive quarters of falling sales in the division. Its DTC business, which hadn’t faced the same pressure as wholesale, grew 17.3%.
- Skechers also increased its full-year outlook, which Tom Nikic of Wedbush said was “a pleasant surprise.” It expects sales between $8.7 billion and $8.9 billion, representing an increase of about 9% to 11%.
Dive Insight:
Skechers’ quarter was “surprisingly strong,” Nikic wrote in an analyst note.
Skechers continues to benefit from a combination of product innovation, strong marketing, global distribution and internal execution, per Nikic, who said that Skechers’ recent areas of weakness, U.S. wholesale and the EMEA region, “re-inflected positively.”
Skechers’ wholesale revenue totaled $127.1 million, and it grew by 11.5% in EMEA, 15.3% in APAC and 5.9% in the Americas region.
On a conference call with investors, Skechers COO David Weinberg attributed the wholesale “return to growth” to an improved inventory position internationally, and an “improvement in the flow of orders” domestically.
The company continues to expect year-over-year growth in the segment domestically and internationally, CFO John Vandemore said on the call.
“It’s manifest in a stronger domestic wholesale rebound than we had originally anticipated for the quarter, continued strength on the domestic and international direct-to-consumer front,” Vandemore said. “In a lot of ways, the quarter came out how we hoped it would when we started the year. We just didn’t have all the data yet that would suggest we’d get fully there.”
By region, EMEA had the highest increase in sales with 17.4%, followed by a 15.9% increase in APAC. The Americas region saw sales increase by 7.8%.
The company remains confident in its goal of reaching $10 billion in sales by 2026, Vandemore said in the earnings release.
