US brand Skechers' sales soar 8.9% to $4.014 bn in H1 FY23

Wholesale sales fell by $24 million, or 1 per cent YoY, largely due to a 15.9 per cent decrease in the Americas (AMER), but partially offset by sales increases in Europe, Middle East, and Africa (EMEA) by 14.6 per cent and Asia Pacific (APAC) by 19.2 per cent. Wholesale volume declined by 7.3 per cent YoY, but the blow was softened by a 6.6 per cent increase in the average selling price.

The direct-to-consumer sales climbed by $351.0 million in H1 FY23, or 27.1 per cent YoY, attributed to a surge in sales in the AMER, APAC, and EMEA regions. The direct-to-consumer volume also reported a robust 25.2 per cent increase, and the average selling price rose by 1.5 per cent, Skechers said in a press release.

Skechers' gross margin increased to 50.8 per cent, a rise of 410 basis points, driven primarily by a higher proportion of direct-to-consumer sales and higher average selling prices in the wholesale sector. Despite this, operating expenses increased by $206.1 million or 14.8 per cent, causing a 210-basis-point increase to 39.8 per cent as a percentage of sales.

Despite these higher expenses, earnings from operations in H1 FY23 rose by $111.2 million to $441.3 million. Net earnings stood at $313.2 million with diluted earnings per share at $2, a healthy 48.1 per cent increase from the previous year.

Skechers' Q2 FY23 also showed positive results, with sales growing by 7.7 per cent YoY to $2.012 billion, due to a 17.9 per cent international increase and a 29.1 per cent direct-to-consumer sales growth, despite a 4.6 per cent domestic decrease and a 5.9 per cent wholesale decrease. The company reported earnings from operations of $217.7 million, a 41.2 per cent increase, while net earnings were $152.8 million with diluted earnings per share at $0.98, significantly higher than the prior year's figures of $90.4 million and $0.58 per share, respectively.

“Despite anticipated headwinds in the domestic wholesale market, we successfully navigated the challenges and achieved record quarterly sales in addition to a new second quarter earnings record,” said John Vandemore, chief financial officer of Skechers. “With sustained momentum in our direct-to-consumer business globally and broad-based strength in our international wholesale business, aided by healthy inventory levels and an innovative pipeline of comfort technology products, we continued to show the strength of the Skechers brand and to execute our long-term growth strategy.”

Fibre2Fashion News Desk (DP)