Skechers falls short of Q3 revenue expectations, lowers outlook
American lifestyle and performance footwear retailer Skechers U.S.A., Inc. announced Q3 sales of $1.55 billion on Thursday, coming in below its own predictions for the quarter, despite solid growth of 19.2% compared to the $1.30 billion reported by the company in the third quarter of 2020.
When it reported its second-quarter results in July, Skechers said that it expected to see sales of between $1.60 billion and $1.65 billion in the third quarter ended September 20, 2021. Although the company missed this target, its chief operating officer, David Weinberg, was keen to point out that its growth during the quarter was still “a remarkable achievement given the on-going supply chain disruptions.”
The retailer experience sales growth in all of its segments, with domestic wholesale revenues rising 10.1% year over, international wholesale increasing 10.6%, and direct-to-consumer sales shooting up 44.1%.
Growth in the international wholesale channel was driven primarily by 61.9% growth in distributor sales, a 10.0% increase in China and a 67.5% rise in India, partially offset by a decrease of 11.0% in Europe.
Direct-to-consumer comparable same store sales rose 31.0%, reflecting a 33.7% rise domestically and a 25.1% increase internationally.
Skechers’ quarterly net earnings totaled $103.1 million, increasing 60.3% from $64.3 million in the same period in the previous year. Diluted earnings per share were $0.66, up from $0.41.
“Despite severe global supply chain challenges, we delivered record third quarter sales along with robust gross margins and fantastic earnings growth,” said Skechers CFO John Vandemore in a release. “Further, our global infrastructure investments continued, with our China distribution center becoming fully operational and excellent progress made on many other infrastructure and technology projects.”
In the first nine months of the year, Skechers achieved sales of $4.64 billion, up 41.7% from $3.27 billion a year ago. Net earnings for the period were $339.1 million, or $2.17 per diluted share, up from $45.3 million, or $0.29 per diluted share.
In line with its underwhelming third-quarter results, Skechers slightly lowered its full-year financial guidance. The company now expects to see sales of between $6.15 billion and $6.20 billion, and diluted earnings per share of between $2.45 and $2.50. Previously, the retailer said it was expecting sales in the range of $6.15 billion to $6.25 billion, and earnings per share of between $2.55 and $2.65.
In the fourth quarter the company said that it expects to report diluted earnings per share of between $0.28 and $0.33 on revenues of $1.51 billion and $1.56 billion.
Skechers currently boasts 3,891 stores around the world, including 523 domestic stores, 331 international locations, 467 joint venture stores and 2,570 distributor, licensee and franchise stores.
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