American firm Skechers posts record annual sales of $8 bn in FY23

The wholesale segment saw a decrease of $127.6 million, or 2.8 per cent, attributed mainly to a 10.6 per cent drop in the Americas (AMER), which was partially offset by a 12.6 per cent increase in the Asia Pacific (APAC) and a marginal 0.1 per cent rise in Europe, Middle East, and Africa (EMEA). The decrease in wholesale volume by 8.7 per cent was balanced by a 6.3 per cent increase in the average selling price, the company said in a media release.

Conversely, direct-to-consumer sales surged by $683.4 million, or 24.3 per cent, thanks to significant growth across all regions, with AMER up 21.5 per cent, APAC 22.0 per cent, and EMEA 49.2 per cent. This sector also saw a 19.6 per cent increase in volume and a 4 per cent rise in average selling price.

The company's gross margin improved substantially, reaching 51.9 per cent, a 470 basis points increase, mainly due to higher average selling prices and a greater proportion of direct-to-consumer sales. However, operating expenses rose by $398.9 million or 13.4 per cent, bringing operating expenses to 42.1 per cent of sales.

Earnings from operations climbed to $784.8 million, marking a significant $238.1 million increase and resulting in an operating margin of 9.8 per cent. Net earnings reached $545.8 million, with diluted earnings per share rising by 46.6 per cent to $3.49.

In the fourth quarter of fiscal 2023 (Q4 FY23), Skechers continued its growth trajectory with a 4.4 per cent increase in sales, fuelled by a 6.9 per cent international rise and a slight 0.3 per cent domestic increase. On a constant currency basis, Q4 sales increased by 2.8 per cent.

Wholesale sales declined by $86.6 million, or 8.3 per cent, with notable decreases in EMEA and AMER, somewhat mitigated by growth in APAC. Direct-to-consumer sales for Q4 grew by $168.7 million, or 20.3 per cent, with significant increases across all regions.

The gross margin for Q4 was 53.1 per cent, up 470 basis points, primarily due to higher average selling prices, a larger share of direct-to-consumer sales, and lower unit costs, thanks to decreased freight costs. Operating expenses rose by $88.1 million or 10.7 per cent, with operating earnings increasing by 50.4 per cent to $130.3 million, leading to an operating margin of 6.6 per cent.

Net earnings for Q4 were $87.2 million, with diluted earnings per share at $0.56, compared to the prior year's net earnings of $75.5 million and diluted earnings per share of $0.48.

“Skechers’ new annual sales record of $8 billion was the result of the broad acceptance for our products worldwide, our loyal and growing consumer base, the cultivated relationships with our partner network, and our determined and dedicated team,” said Robert Greenberg, chief executive officer of Skechers. “As always, product and marketing are paramount to our success, with comfort, quality, style and innovation inspiring every collection. Throughout the year, we delivered fresh styles of our proven Skechers hands free slip-ins, understanding that consumers of all ages appreciate the comfort and convenience of this technology.” Top of Form

Fibre2Fashion News Desk (DP)