Skechers USA Inc. Reports Weaker-than-Expected Q4 Sales

Shares of Skechers USA Inc. experienced a significant drop of 10.8% during extended trading on Thursday following the release of their fourth-quarter sales report, which fell short of expectations. The decline in sales was primarily attributed to a decrease in wholesale business.

Financial Performance Highlights

• Revenue for the quarter totaled $1.96 billion, reflecting a 4.4% increase compared to the previous year's quarter.
• Net income reached $87.2 million, equivalent to 56 cents per share. This represents a growth from the prior year's quarter, which reported $75.5 million in net income or 48 cents per share.
• On an adjusted basis, Skechers earned 48 cents per share, falling short of analysts' estimated adjusted earnings of 55 cents per share.
• Analysts surveyed by FactSet anticipated sales of $2.03 billion, which were not met.

Wholesale Sales Decline

Chief Operating Officer David Weinberg acknowledged that Skechers faced an 8% decline in wholesale sales. Weinberg expressed optimism, stating that there are indications of a positive shift in retailer behavior based on early reads from January shipments and encouraging order trends for the first half of the year.

Regional Revenue Performance

• The Asia Pacific region witnessed a significant revenue growth of 15%, primarily driven by double-digit growth in China.
• In the Americas, revenue experienced a more modest growth of 3%.
• However, Europe, Middle East, and Africa saw a decline of 7% in revenue.

Outlook for Q1 and Full Year

For the first quarter, Skechers anticipates sales between $2.175 billion and $2.225 billion, with earnings per share ranging from $1.05 to $1.10. Analysts surveyed by FactSet expect slightly lower sales of $2.192 billion and earnings of $1.20 per share.

Looking ahead to the full year, Skechers projects sales between $8.6 billion and $8.8 billion, with earnings per share between $3.65 and $3.85. However, analysts surveyed by FactSet have slightly higher expectations, forecasting sales of $8.918 billion and earnings of $4.18 per share.

Skechers' Stock Performance

Over the past 52 weeks, Skechers' shares have risen by an impressive 29.3%, outperforming the S&P 500 index's gain of 17.4%.