Skechers Q3 2024 Earnings Report

Skechers USA Inc. (NYSE:SKX) announced a strong performance in the third quarter of 2024, with record sales of $2.35 billion, a 16% increase year-over-year. Earnings per diluted share increased by 35% to $1.26. Growth was driven by a 21% rise in wholesale operations and a 9.6% increase in Direct-to-Consumer sales. International markets, excluding challenges in China, contributed significantly, representing 61% of revenue.

Key Takeaways

• Record sales of $2.35 billion, a 16% increase
• Earnings rose to $1.26 per diluted share
• Wholesale sales up 21%, Direct-to-Consumer sales up 9.6%
• EMEA sales increased 30%, significant growth in India
• 68 new stores opened, with plans for 55-60 more in Q4
• Strong liquidity position: $1.6 billion in cash, $2.42 billion total liquidity.

Company Outlook

• Projected full-year 2024 sales between $8.925 billion and $8.975 billion
• Expected earnings per diluted share between $4.20 and $4.25
• Aiming for $10 billion in sales by 2026
• Q4 results to be announced on February 6, 2025.

Bearish Highlights

• Sales in China declined by 5.7% due to macroeconomic challenges
• Gross margin decreased to 52.1%, down 80 basis points
• Inventory levels rose by 24%, especially in China and EMEA.

Bullish Highlights

• Strong EMEA and India performance: 30% and 24% sales increases, respectively
• Positive returns from Singles' Day
• Successful diversification of geographic risks and new product growth.

Misses

• Decline in China’s sales and rising inventory
• Challenges with same-store sales growth due to prior high performance.

Q&A Highlights

• COO David Weinberg noted EMEA growth linked to demand and increased DTC presence
• CFO John Vandemore confirmed inventory redistribution to meet demand
• Macroeconomic challenges, not brand-specific issues, affected China’s performance.

Skechers’ earnings call reflects resilience and strong strategic expansion amid global market challenges. With record sales, the company emphasizes innovative product offerings and effective marketing, while staying vigilant of regional variances.

InvestingPro Insights

Skechers' Q3 2024 performance aligns with InvestingPro insights, indicating strong revenue growth and an attractive PEG ratio of 0.71. Skechers’ moderate debt level supports its robust liquidity position, enabling global expansion and resilience against regional challenges.

Full Transcript

Operator: Greetings and welcome to Skechers Q3 2024 Earnings Conference Call.

Melissa Tankersley: Good afternoon, everyone. Thank you for joining. I’ll now turn the call over to our COO, David Weinberg.

David Weinberg: Thank you for joining. Our third quarter marked record sales of …
(Subsequent dialogue continues with detailed information about growth, challenges, and company goals.)

John Vandemore: We delivered record third quarter financial performance, …
(Further analysis of financial results, gross margin expectations, and market strategies.)

Operator: Thank you for your participation. You may disconnect your lines at this time.