American footwear firm Skechers' sales ascend 9.8% in H1 FY24

US-based footwear brand Skechers has reported a 9.8 per cent increase in sales in the first half of fiscal 2024 (H1 FY24), reaching $4.409 billion. This growth reflects an 11.1 per cent rise in international sales and a 7.8 per cent increase domestically.

Wholesale sales saw an increase of $186.2 million, or 7.9 per cent, driven by growth in the AMER region (8.0 per cent), EMEA region (8.4 per cent), and APAC region (6.7 per cent). Wholesale volume increased by 8.3 per cent, though the average selling price declined by 0.4 per cent, the company said in a press release.

Direct-to-consumer sales increased by $208.6 million, or 12.7 per cent, with significant gains in the Europe, Middle East, and Africa (EMEA) region (48.3 per cent), Asia-Pacific (APAC) region (10.7 per cent), and Americas (AMER) region (6.8 per cent). Direct-to-consumer volume rose by 12.5 per cent, and the average selling price increased slightly by 0.2 per cent.

The company's gross margin improved to 53.7 per cent, an increase of 290 basis points, attributed to lower costs per unit driven by reduced freight expenses. However, operating expenses rose by $262.9 million, or 16.5 per cent, resulting in a 240-basis-point increase in operating expenses as a percentage of sales to 42.2 per cent. Selling expenses increased by $76.7 million, or 24.3 per cent.

Earnings from operations grew by $64 million, reaching $505.3 million, with an operating margin of 11.5 per cent. Net earnings for H1 FY24 were $346.9 million, and diluted earnings per share were $2.24, marking a 12 per cent increase over the prior year.

In Q2 FY24, Skechers reported a 7.2 per cent increase in sales, totalling $2.15 billion. This growth was driven by a 6.9 per cent rise in international sales and a 7.7 per cent increase domestically. On a constant currency basis, sales rose by 8.7 per cent.

Wholesale sales increased by $59.1 million, or 5.5 per cent, with growth in the AMER region (10.3 per cent) and EMEA region (3.9 per cent), though this was partially offset by a 2.6 per cent decline in the APAC region. Wholesale volume increased by 6.4 per cent, while the average selling price decreased by 0.8 per cent.

Direct-to-consumer sales grew by $86.0 million, or 9.2 per cent, with significant increases in the EMEA region (40.6 per cent), AMER region (4.1 per cent), and APAC region (5.8 per cent). Direct-to-consumer volume rose by 10.2 per cent, though the average selling price decreased by 1 per cent.

The company's gross margin improved to 54.9 per cent, an increase of 220 basis points, due to lower costs per unit driven by reduced freight expenses and a favourable mix of direct-to-consumer volumes. However, operating expenses increased by $135.1 million, or 16 per cent, resulting in a 340-basis-point rise in operating expenses as a percentage of sales to 45.3 per cent.

Earnings from operations decreased by $11.2 million, or 5.1 per cent, totalling $206.5 million. Net earnings for Q2 FY24 were $140.3 million, with diluted earnings per share at $0.91, compared to prior year net earnings of $152.8 million and diluted earnings per share of $0.98.

“We are extremely encouraged by the demand for Skechers product as demonstrated in second half orders, which has led us to raise our full-year outlook for sales and earnings. As we look to the remainder of the year and beyond, we remain focused on enhancing our global infrastructure, managing inventory levels, and driving efficiencies to achieve profitable growth,” said David Weinberg, chief operating officer of Skechers.

Fibre2Fashion News Desk (DP)