Skechers USA (SKX) Tops Q3 EPS by 7c, Revenues Miss; Offers 4Q EPS/Revenue Outlook Above Consensus

Skechers USA (NYSE: SKX) reported Q3 EPS of $0.58, $0.07 better than the analyst estimate of $0.51. Revenue for the quarter came in at $1.18 billion versus the consensus estimate of $1.22 billion.

• Record sales of $1.176 billion, an increase of 7.5 percent, or 8.5 percent on a constant currency basis
• International wholesale sales increased 11.8 percent
• Company-owned global retail sales increased 10.6 percent
• Total international wholesale and retail sales combined represented 55.5 percent of total sales
• Diluted earnings per share of $0.58
• Repurchased 1.4 million shares of common stock

“Achieving record third quarter sales is a notable accomplishment given the strength of our third quarter 2017 sales,” began Robert Greenberg, Skechers chief executive officer. “Both our domestic and international businesses grew, and we remained the leader in walking, work, casual lifestyle and sandals footwear in the United States. We experienced strong product successes across multiple divisions around the world, which was evident by our double-digit growth in both our international wholesale and worldwide Company-owned retail businesses. Skechers D’Lites, our heritage chunky style that has seen great success over the last two years in Asia, is now an in demand style across North America and Europe, and is poised for growth in South America, India and the Middle East. Through Skechers D’Lites, we are reaching a younger, more fashion-savvy audience, and getting press—from Marie Claire and Elle to HypeBae and Highsnobiety—and social media influencers are embracing this signature look. Further, we are seeing renewed acceptance of this chunky style by men. Our core footwear categories for men, women, work and golf are also performing well. We are achieving this growth with the right product mix combined with a balanced approach to marketing spend. As we continue to invest in our international infrastructure, we believe there is significant opportunity to grow our brand further through both wholesale, and Company-owned and third-party retail stores, which now stand at 2,802 locations worldwide. We’re looking forward to fourth quarter growth across both our domestic and international channels and a new annual sales record.”

“As we near the close of 2018, we believe the direction of our business is on target with our record sales in the third quarter, continued international growth and strong gross margins,” stated David Weinberg, chief operating officer of Skechers. “With three record sales quarters in 2018 and brand acceptance around the globe, we achieved a new record for the first nine months of $3.56 billion, an 11.5 percent increase over last year. In the third quarter, our international distributor business returned to growth, increasing 11.6 percent over the same period last year, and combined with our international joint venture and subsidiary business, our total international wholesale sales increased 11.8 percent for the period. International wholesale along with international retail now represents 55.5 percent of our total business. We expect our business in the United States—both wholesale and retail—to grow in the fourth quarter. We remain committed to efficiently and profitably growing our global footwear business.”

GUIDANCE:

Skechers USA sees Q4 2018 EPS of $0.20-$0.25, versus the consensus of $0.18. Skechers USA sees Q4 2018 revenue of $1.1-1.125 billion, versus the consensus of $1.08 billion.

For earnings history and earnings-related data on Skechers USA (SKX) click here.

You May Also Be Interested In

• Broadcom (AVGO) Tops Q2 EPS by 5c, Offers Guidance
• Tilly's, Inc. (TLYS) Tops Q1 EPS by 44c ; offer guidance
• CrowdStrike posts record ARR growth, raises full-year outlook