Skechers USA, Inc. posted its 15th consecutive quarterly sales growth
in the third quarter with both sales and net income coming in higher
than earlier guidance. The discontinuation of a pair of the companys
fashion lines ate into gross margins, but the bottom line still grew at
a double-digit rate. At quarter-end, the companys backlog was up in
the double-digits even without the discontinued lines, though the
addition of Zoo York footwear likely worked to offset some of that.
Net sales jumped 19.3% to $395.0 million from $331.1 million for last
years third quarter. The company saw 14% sales growth in its domestic
wholesale division led by double-digit improvements in the Skechers
men's, women's and kids' lines, as well as in men's and women's Marc
Ecko footwear. Pairs shipped increased 15% or approximately $1.5
million in the U.S.
The international subsidiary business saw 46% sales growth, led by
strong improvements in two of the companys largest subsidiaries, the
United Kingdom and Canada. The U.K. posted triple-digit growth in the
quarter, while France was up 70%. The company said it saw “double-digit
quarter-over-quarter growth in nearly every subsidiary” on a quarterly
conference call with analysts. International wholesale sales increased
by “more than 35%.”
Skechers retail sales were up 21% in the quarter, marking the 17th
consecutive quarter of double-digit sales increases. At quarter-end,
the company had 178 owned and operated stores, with 163 in the U.S.
Domestic retail store sales increased 21% for the quarter on a
mid-singles comp increase and an increase of 31 stores, eight of which
opened in the third quarter. International retail sales grew by “more
than 20%” due to double-digit comps in “virtually every region” and an
increase of three stores. The company opened five stores in Q4-to-date
and plans to open eight more before the end of the year.
Gross margins decreased 70 basis points to 43.5% of net sales compared
to 44.2% of net sales in Q3 of last year as a result of the companys
closing of its Michelle K footwear and Kitson apparel and footwear
lines. Third quarter net earnings were $24.7 million, up 11.5% from
$22.2 million in the third quarter of the prior year. Q3 diluted
earnings per share were 53 cents, compared to 49 cents last year.
The company expects Q4 sales between $305.0 million and $315.0 million
and diluted earnings per share between 26 cents and 31 cents. For the
full year, the company expects sales of $1.397 billion to $1.407
billion and earnings per share between $1.63 and $1.68.