Skechers bounces back with record sales
California-based footwear company Skechers USA, Inc. reported on Thursday that it achieved record sales of $1.176 billion in the third quarter of 2018, seeing particularly strong growth in its international retail and wholesale channels.
The company’s sales progress reflects a 7.5% increase, or 8.5% in constant currencies.
International wholesale sales grew 11.8% during the period, while company-owned global retail sales were up 10.6%. Domestic wholesale, however, decreased 3%.
Combined sales in Skechers’ international wholesale and retail channels grew 12.5% to account for 55.5% of the company’s total sales in Q3, while overall domestic sales rose 1.8%.
The company’s earnings from operations also increased $7.4 million, or 6.4% compared to the same period in the previous year, with net earnings for the quarter totaling $90.7 million, down from $92.3 million in the prior-year period but still beating Wall Street estimates.
“Both our domestic and international businesses grew, and we remained the leader in walking, work, casual lifestyle and sandals footwear in the United States,” said Skechers CEO Robert Greenberg in a release. “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.”
Greenberg also pointed out the success of the company’s Skechers D’Lites model as a highlight in Q3. The chunky sneaker has proved popular in Asia over the last two years but is now an increasingly sought-after model in North America and Europe as well, and is also poised for growth in South America, India and the Middle East.
Last month, Skechers was the subject of class action lawsuits alleging that between October 20, 2017 and July 19, 2018, the footwear company made materially false statements or omissions of material facts to investors about its operations and prospects, an accusation which the company dismissed as "frivolous and without merit."
Shares in Skechers tumbled after the company reported a 25% fall in earnings in the second quarter in July, but jumped 8% in after-hours trading on Thursday off the back of its strong Q3 performance and its optimistic outlook for Q4.
In the fourth quarter of 2018, Skechers is expecting to achieve sales of between $1.100 billion and $1.125 billion, and diluted earnings per share in the range of $0.20 to $0.25.
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