Skechers Beats Profit Expectations in Q3, Nets Record Sales Over $2B
Skechers beat its own expectations for sales and profits in the third quarter of 2023.
The Los Angeles-based footwear company reported record quarterly sales of $2.02 billion, which were up 7.8 percent from the prior year and ahead of the company’s previously outlined projection of between $1.95 billion and $2 billion. Net earnings were $145.4 million and diluted earnings per share were up 69.1 percent to $0.93. Skechers had been aiming for diluted earnings per share of between $0.70 and $0.75.
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The profit results also surpassed expectations from analysts surveyed by Yahoo Finance, who were looking for EPS of $0.79. Sales fell short of analysts predictions, which were looking for $2.03 billion in revenues.
By channel, direct-to-consumer sales grew 23.8 percent in Q3 while wholesale decreased 1.4 percent, following a 5.9 percent wholesale decrease in Q2. Skechers saw growth in all regions, including the U.S., which grew 7 percent due to strong DTC sales. China grew 18 percent.
Skechers CEO Robert Greenberg said the strong Q4 sales were owed to Skechers’ “continued innovation and determination to deliver comfort, style and quality in every pair.”
In the third quarter, Skechers pushed into the soccer category and signed striker Harry Kane into a long-term deal, making him the center of Skechers’ first European football boots, SKX_01. Skechers this week also entered the basketball business, revealing its first-ever shoes in the category and signing two renowned ballers as brand ambassadors: Julius Randle of the New York Knicks and Terance Mann of the Los Angeles Clippers.
“Leading professional athletes both on the pitch and on the court in Skechers Performance footwear are a testament to our ability to deliver comfort that performs at the highest levels of competition,” Greenberg said in a statement. “Designing desirable footwear for fans of Snoop Dogg as well as our ambassador Martha Stewart demonstrates the diversity of style, offering and demographic of the Skechers brand and our customers. We believe our constant innovation to meet the needs of consumers from all walks of life—including professional athletes, and our impactful marketing will drive our success for years to come.”
Skechers slightly lowered the top end of its full-year sales outlook and now expects revenues of between $7.95 billion and $8.05 billion for fiscal year 2023, down from its previously issued guidance of between $7.95 billion and $8.1 billion. Diluted earnings per share are now expected in the range of $3.33 to $3.43, up from its prior range of $3.25 to $3.40.
In Q4, Skechers expects to achieve between $1.91 billion and $2.01 billion in sales, with diluted earnings per share of between $0.40 and $0.50.
In a statement, CFO John Vandemore said that Skechers remains “well positioned to accomplish our objective of generating $10 billion in sales by 2026.”
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