Dive Brief:
- Skechers netted $2.01 billion in sales in the second quarter, beating last quarter’s record for quarterly sales, and marking a 7.7% increase year over year, according to its earnings report Thursday.
- The company primarily attributed its success to DTC sales, which grew 29.1%. However, wholesale revenues decreased 5.9%, or $67.3 million.
- In Skechers’ quarterly earnings call with investors, Chief Operating Officer David Weinberg said the wholesale challenges were “nearly offset” by the DTC strength.
Dive Insight:
Company leaders attributed the wholesale decrease to inventory issues impacting Skechers’ wholesale partners. Weinberg pointed to the same quarter last year, where wholesale grew 30%.
The wholesale challenge was primarily seen in the Americas, as the international wholesale business increased 10%.
The strength of Skechers’ sales was primarily in the Asia Pacific region, which increased 20%. China in particular experienced 19% growth in sales, due in part to the nation’s reopening after COVID-19 lockdowns. Sales grew 16% in Europe, the Middle East and Africa. But sales in the Americas decreased 1% year over year to $1.03 billion.
“The second quarter marked yet another sales record and a new milestone as we made the Fortune 500 list of largest companies, a testament to the strength of our brand and the dedication of our entire organization to consistently create, innovate and meet the footwear needs of consumers,” Robert Greenberg, CEO of Skechers, said in the release.
CFO John Vandemore said in the call that the DTC performance was anchored by retail stores, both domestically and internationally, even though e-commerce also contributed.
“Ultimately, I think the benefit the stores have is that, as we said in our comments, they have the right inventory,” Vandemore said. “They have the product that is the most new, that features our comfort technology product attributes. And that's what's driving consumers into the store.”
By 2026, the company hopes to generate $10 billion annually, which it said could be helped by developing new categories, some of which could be introduced by the end of this year. When asked about these categories on the call, Weinberg declined to elaborate further.
