Skechers reports record half-year sales performance

By

Obi Anyanwu

Published
Jul 22, 2017

Skechers continues its streak of record-setting sales quarters in its second quarter of fiscal 2017. The footwear company expected to achieve record sales between $950 million and $975 million in the second quarter, and actually exceeded those numbers with sales of $1.026 billion.

 
“Second quarter net sales exceeded our expectations setting another record quarter, and making the first half of 2017 a new record with sales surpassing $2 billion,” said COO and CFO David Weinberg.
 
“The growth came across our three distribution channels—with double-digit increases in our company-owned global Skechers retail business, and each of our international distributor, subsidiary and joint venture businesses, as well as a mid-single-digit increase in our domestic wholesale business.”

The quarterly net sales increased 16.9%, due in part to a 6.4% increase in the domestic wholesale business, an 18.6% increase in the international wholesale business, and a 28% increase in the global retail business, which includes comparable same store sales increases of 7%. The domestic wholesale business shipped 11.4% more pairs, while the average price per pair fell 4.5%.
 
The launch of the You by Skechers lifestyle and wellness line also contributed to the record sales performance, with strong sales in the sandal business, and the company reported double-digit growth in China, India, Australia, Germany and Chile.
 
Skechers also reported record six-month sales of $2.099 billion.
 
Weinberg added, “Based on our global meetings in May and June, and our on-going domestic key account meetings at our corporate offices, plus our July sell-throughs, we believe that the record sales we experienced in the first six months will continue in the second half.”
 
In addition to the record performances, gross profit in the second quarter increased to $488.3 million, or 47.6% of net sales, and selling expenses increased to $100 million, or 9.7% of sales, compared to $76.0 million, or 8.7% of sales, in the prior year, due to increased advertising.
 
Net earnings in the second quarter fell 19.7% to $59.5 million, and net earnings for the six-month period were $153.5 million.

Finally, Skechers expects to achieve record third quarter sales in range of $1.050 billion and $1.075 billion.