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On October 24, 2024, Skechers U.S.A. (SKX) held its earnings call for the third quarter ending September 30, 2024. The call provided insights into the company’s financial performance, operational strategies, and future outlook.
Key Highlights from Q3 2024 Earnings Call
Operator
Welcome and thank you for joining Skechers’ third quarter earnings call. We will begin with prepared remarks followed by a question-and-answer session. Please note that the conference is being recorded.
Melissa Tankersley — Manager, Digital Marketing Team
Thank you for joining us. I’m Melissa Tankersley, and I’m part of the digital marketing team at Skechers. We had a record-setting quarter, achieving $2.35 billion in sales, an increase of 16% compared to the same quarter last year. This growth reflects robust performance across various segments, with direct-to-consumer sales rising by 9.6% and wholesale sales by 21%. Earnings per diluted share reached $1.26, marking a 35% increase.
Skechers’ chief operating officer, David Weinberg, along with our chief financial officer, John Vandemore, are also with us today. Before we proceed, it’s important to mention our safe harbor statement regarding forward-looking statements, as they may involve risks and uncertainties affecting our future results.
Financial Performance Overview
David Weinberg — Chief Operating Officer
We’re excited to report that our third-quarter performance has set a new sales benchmark for the company. We attribute this success to the increasing demand for our innovative, comfortable footwear, which resonates well with consumers who seek both style and affordability. The varied product lines we offer, from sandals to performance shoes, have enabled us to appeal to a wide customer base.
Particularly noteworthy has been our emphasis on expanding the Skechers Performance division, with new categories aiming to draw in a broader audience. We are establishing a presence in team sports and have begun working with numerous elite athletes to showcase our footwear across different sporting events.
Our marketing campaigns, highlighted by high-profile endorsements from notable figures like Snoop Dogg and basketball star Joel Embiid, have succeeded in enhancing brand visibility and purchase intent for both our Lifestyle products and Performance technologies. Skechers is now seen as a trusted choice among athletes, regardless of their skill levels.
Our international sales have also shown impressive growth, especially in the EMEA region, which increased by 30%, while the Americas recorded 14% growth. Despite certain market challenges, including those in China, we managed to navigate through effectively, maintaining optimism about our brand presence and capabilities in the region.
Sales and Market Insights
John Vandemore — Chief Financial Officer
Third-quarter sales of $2.35 billion were a direct result of our innovative product lines and effective marketing strategies. Domestic wholesale sales rose by 26%, attributed to the better inventory management and consumer reception of our comfort technology. Although we saw a slight decline in the China region due to macroeconomic pressures, our international markets have remained robust, showcasing the strength of our global diversification strategy.
Direct-to-consumer channels also reflected strong growth, particularly through e-commerce, which grew internationally by 14%. We believe that sustaining this momentum through strategic marketing and product introductions will continue to drive consumer engagement and loyalty.
With a total of 5,332 Skechers stores worldwide at the end of the quarter and expansion plans including opening 55 to 60 new company-owned stores globally in the fourth quarter, we are strategically positioning ourselves to capitalize on market potential.
Future Outlook
Looking ahead, we project sales for the full year to be between $8.925 billion and $8.975 billion, with anticipated earnings per diluted share ranging from $4.20 to $4.25. This guidance reflects our proactive strategies aimed at maintaining profitability while pursuing aggressive growth opportunities.
As we look to the future, our focus remains on bolstering our product offerings, enhancing our operational efficiency, and expanding our retail presence to meet the evolving demands of our global consumer base.
Q&A Session Highlights
Operator
We’ll now begin the question-and-answer portion of the call. The first question comes from Jay Sole with UBS.
Jay Sole — Analyst
Can you elaborate on the growth in domestic wholesale? What categories are driving this strong performance?
John M. Vandemore — Chief Financial Officer
This growth is largely driven by our comfort technology products, which have seen a significant uptick in consumer demand. This year, our wholesale partners are better positioned to embrace these products, which has contributed to the increase.
Laurent Vasilescu — Analyst
Can you discuss the outlook for EMEA considering the current market conditions?
David Weinberg — Chief Operating Officer
Yes, despite challenges, we expect continued growth in EMEA, attributed to strong consumer demand and an improved product supply chain. Our targeted marketing efforts have resonated well with consumers.
As the call drew to a close, both David Weinberg and John Vandemore reiterated their confidence in Skechers’ ability to maintain momentum through effective operations, strategic marketing, and a commitment to innovation.
This earnings call underscores Skechers’ strengths in product innovation, marketing prowess, and its global positioning as a leader in the footwear industry.
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