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Skechers’ Stock Drops Amid Disappointing Outlook and Tariff Concerns

Key Takeaways

In a surprising turn of events, Skechers saw its shares plummet 12% in premarket trading on Friday. The drop followed a less favorable outlook for the company, despite healthy fourth-quarter earnings numbers that met expectations.

The footwear manufacturer released its fourth-quarter results after market close on Thursday, revealing adjusted profits of $130.3 million, or 86 cents per share. Revenue for the quarter stood at $2.21 billion, aligning closely with analysts’ predictions.

However, Skechers’ guidance for future quarters did not meet market expectations. The company anticipates revenue for the first quarter to range between $2.4 billion to $2.43 billion, alongside an earnings per share forecast of $1.10 to $1.15. These figures fall short of the anticipated $2.48 billion and $1.56 EPS, as per consensus estimates from Visible Alpha.

Additionally, Skechers projected annual revenue between $9.7 billion and $9.8 billion, with earnings per share expected between $4.30 and $4.50. These figures are lower than the market’s expectations of $9.86 billion in revenue and $4.86 EPS.

CEO Highlights Economic Challenges Ahead

During the earnings call, CEO John Vandemore acknowledged the “several headwinds and uncertainties” that Skechers anticipates facing in 2025, including currency fluctuations and ongoing economic weaknesses in China. A transcript of his remarks was shared by AlphaSense.

Vandemore commented on the recently introduced tariffs by the U.S. on imports from China, stating, “These tariffs have affected our ability to predict future outcomes.” He elaborated that while the company has not fully integrated the potential impact of these tariffs into their guidance, they are preparing for a wide range of responses. This could involve reshaping production locations, negotiating concessions with vendors, and possibly adjusting pricing.

As a result of these developments, Skechers’ shares experienced a notable decline on Friday morning, marking a change from the impressive 30% gain seen in the past year.

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