Skechers sales growth continues with increasing international business

By

Obi Anyanwu

Published
Jul 24, 2016

Skechers USA continues its streak of record-breaking financial quarters with the second quarter of 2016. The Manhattan Beach, California company reported an increase of net sales to $877.8 million from $800.5 million in the previous second quarter, which led to a $1.86 billion net sales record for the first six months of 2016.

 
Chief Operating Officer and Chief Financial Officer David Weinberg explained in the financial report that the second quarter growth was attributed to a 34.6% increase in the international subsidiary and joint venture businesses and a 40.5% increase in international stores.
 
“This resulted in our international wholesale and retail business comprising 41.9 percent of total sales for the second quarter and 45.0 percent for the first six months of 2016,” said Weinberg. “Company-owned Skechers retail sales increased 15.4 percent for the quarter. As expected, in our domestic wholesale business, shipments were pulled forward from April into March, resulting in significantly reduced shipments in April and a sales decrease of 5.4 percent in the second quarter, but an increase of 3.2 percent for the first six-months.”

Second quarter gross profit increased to $416.3 million, or 47.4% of sales, from $374.6 million, or 46.8% of sales, in the previous year.
 
Net earnings decreased to $74.1 million from $79.8 million, but net earnings for the first six months increased to $171.7 million from $135.9 million.
 
CEO Robert Greenberg added, “International is a key focus for Skechers as we expand our reach and deliver more product into more channels of distribution—including the expansion of our retail arm of the Company with our first Skechers stores in Belgium, Norway and Finland; another 42 Skechers stores in China—bringing the total Skechers store count to 233 in that country; and double-digit sales growth in many countries—from Germany to Canada and Scandinavia to Russia. Together with our international partners, we opened a net 133 Skechers stores in the second quarter, bringing the total number of Skechers retail stores to 1,548, of which 1,144 are outside the United States. We expect to have more than 1,600 Skechers stores by year-end, including our first retail stores in Uruguay, Paraguay, Botswana and Sri Lanka, as well as the opening next month of our store at One World Trade Center in New York.”
 
In addition to the international retail expansion, the company expanded its UK headquarters in June and opened a new European distribution center in July.
 
Skechers currently has $628.8 million in cash and cash equivalents, and it expects its third quarter net sales to range from $950 million and $975 million due in part to the growing international business.