Skechers Reports Profit Beat, Wholesale Slowdown
Skechers reported sales in line with its expectations for the fourth quarter and full year of 2023, but reported a slowdown in its wholesale channels.
Shares of Skechers were down more than 10 percent after markets closed on Thursday.
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The Los Angeles-based footwear company reported Q4 sales of $1.96 billion, up 4.4 percent compared to the prior year. Net earnings were $87.2 million, with diluted earnings per share of 56 cents, up 16.7 percent from the prior year. The sales total was in line with Skechers’ projection of between $1.91 billion and $2.01 billion, though profits surpassed the company’s projected range of 40 cents to 50 cents.
Direct-to-consumer revenue in Q4 grew 20 percent in the quarter, while wholesale dropped 8 percent “as several retailers continued to conservatively manage their inventory levels,” said Skechers’ chief operating officer David Weinberg in a statement. He added that early reads from January suggest more “positive order trends” for 2024.
For the full-year of 2023, Skechers achieved a record annual revenue of $8 billion, up 7.5 percent from the prior year and in line with its most recently provided outlook. Diluted earnings per share for the year were up 46.6 percent to $3.49, which surpassed its guidance. Wholesale sales dropped 2.8 percent and DTC sales grew 24.3 percent.
Skechers’ chief executive officer Robert Greenberg called out several wins for the company last year, including its popular Hands Free Slip-ins, partnerships and collections with Martha Stewart and Snoop Dogg and the launch Skechers Football category with the signing of top athletes like Harry Kane and Oleksandr Zinchenko.
“Our product initiatives and diverse line-up of athletes and ambassadors offers numerous opportunities to tell the Skechers story, and further grow our business globally,” Greenberg said in a statement. “Given our momentum, we are confident that 2024 will be another successful year for the company.”
Looking ahead, Skechers expects sales between $8.6 and $8.8 billion in 2024, with diluted earnings per share of between $3.65 and $3.85. In the fourth quarter, Skechers expects sales between $2.18 billion and $2.23 billion with diluted earnings per share in the range of $1.05 and $1.10.
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