Skechers Hits $2 Billion in Q1 Sales, but U.S. Wholesale Declines
Skechers Hits $2 Billion in Q1 Sales, but U.S. Wholesale Declines
Facing both a difficult year-over-year comparison and broad industrywide “inventory congestion,” Skechers saw an 18 percent decline in U.S. wholesale business in Q1 ended March 31. Company executives last week confirmed the brand’s inventory reduction efforts in recent months and told analysts that “probably Q2 is going to be the worst of it” in its home market before a likely rebound in the second half of 2023.
Further, CFO John Vandemore pointed to the firm’s 24.5 percent direct-to-consumer sales growth in Q1 as evidence that the brand’s cache remains strong with consumers. “They want the brand, they want the products that we’re offering,” Vandemore said. “And so long-term, we know that’s going to be the key to success.”
Overall, Q1 revenues fell 4.8 percent in the U.S. but rose 21.1 percent elsewhere in the world as Skechers’ sales for the period jumped 10 percent to more than $2 billion and gross margin improved by 360 basis points to 48.9 percent on 5 percent higher average selling prices in the wholesale channel and a greater mix of direct-to-consumer sales.
“We think we’re keeping the brand in a very solid position that will be warranted, taken to our wholesale partners and be well received by customers when they (retailers) create the shelf space in an environment where you can sell full-price product and new stuff rather than trying to promote everything to clean everything out,” COO David Weinberg said.
The company’s current FY23 outlook calls for a revenue range of $7.9 to $8.1 billion that will produce diluted EPS of $3.00 to $3.20.
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