Skechers soft sales guidance sees shares plunge despite "record" first quarter
U.S. footwear firm Skechers Inc. saw double-digit sales growth in the first quarter of 2018, witnessing a "record quarter" in revenue terms.
For the three months ending March 31, Skechers sales rose 16.5% to $1.25 billion. Net earnings were up 25.2% year-over-year to $117.7 million, or 75 cents a share.
Comparable same-store sales rose 9.5% year-on-year at the Californian company's own stores, with a lesser gain of 7% in the US, surpassed by a sharper 17.6% advance globally.
Looking forward, the Manhattan Beach-based firm warned that some key international retailers and US accounts will shift shipments from the current quarter to the back half of the year, affecting its second quarter.
As a result, Skechers said its current quarter sales will rest between $1.12 billion and $1.145 billion, with diluted earnings per share between 38 cents and 43 cents.
However, analysts and investors alike had been looking for second-quarter sales of about $1.15 billion and earnings of 55 cents a share, according to Factset data.
The softer guidance sent the firm's shares on spiral downturn late Thursday evening, slashing 24%, after a 2017 that saw Skechers hit double-digit percent growth in its stocks.
From stocks to global and domestic revenues, last year was very successful for the footwear firm, with annual sales of $4.16 billion, an increase of over $600 million from the previous year’s sales.
On Thursday, Skechers CEO, Robert Greenberg, appeared positive in the latest quarterly results release, himself hailing 2017 a "banner" year. Yet, Greenberg was quick to remind analysts of the "record" quarter just gone.
"With our men’s, women’s and kids’ product growing year-over-year and resonating with consumers globally, we believe our moment is now," said Greenberg.
"We are experiencing the continued success of our men’s Skechers Sport, women’s sandals and men’s and women’s On the Go collections. In addition, with the global focus on the trend-right Skechers D’lites, we’re seeing this product turn into a must-have item by accounts and the press, resulting in new opportunities," he added.
Skechers said its European distribution center experienced a record quarter for shipment volume, adding that its international business is the firm's most opportunistic for growth currently, and moving forward.
"Our international subsidiary and joint venture businesses are driving our growth with a combined quarterly increase of 25.7 percent, and there are now 2,197 company-owned or third-party Skechers stores outside the United States," said COO, David Weinberg.
"Now at 54.0 percent of our total business, we continue to see international as our greatest growth opportunity," he concluded.
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