US' Skechers reports 7.1% Q1 sales growth, $202.4 mn net earnings
American brand Skechers first quarter (Q1) sales have increased by 7.1 per cent year-over-year (YoY) due to an increase of 7.2 per cent YoY internationally and a 6.9 per cent domestically. The gross margin was 52.0 per cent, a decrease of 50 basis points (bps), due to lower average selling prices.
The operating expenses of the company increased $106.4 million, or 12.1 per cent YoY, and as a percentage of sales increased 180 bps to 41.0 per cent. Selling expenses increased $28.6 million or 18.3 per cent, and as a percentage of sales increased 70 bps to 7.7 per cent, primarily due to higher global demand creation expenditures.
American footwear and apparel brand Skechers' Q1 2025 sales rose 7.1 per cent YoY, driven by 7.2 per cent international and 6.9 per cent domestic growth. Wholesale sales grew 7.8 per cent, and DTC sales increased 6.0 per cent. Net earnings were $202.4 million, with EPS at $1.34. The brand expanded to 5,318 stores globally, reflecting strong demand across key regions despite market challenges.
General and administrative expenses of the company increased $77.8 million or 10.7 per cent, and as a percentage of sales increased 110 bps to 33.3 per cent, primarily driven by labour and facility costs, including rent and depreciation, Skechers said in a press release.
The company's wholesale sales grew $110.5 million, or an increase of 7.8 per cent including increases in Europe, the Middle East, and Africa (EMEA) of 13.0 per cent and Americas of 7.3 per cent, partially offset by a decrease in Asia Pacific (APAC) region of 0.6 per cent. The wholesale volume increased 9.1 per cent and average selling price declined 1.3 per cent.
The direct-to-consumer (DTC) sales grew $49.5 million, or an increase of 6.0 per cent including increases in Americas of 9.8 per cent and EMEA of 21.7 per cent, partially offset by a decrease in APAC of 4.4 per cent. DTC volume increased 6.3 per cent and average selling price declined 0.3 per cent.
The net earnings attributable to Skechers were $202.4 million and diluted earnings per share (EPS) were $1.34, compared with prior year net earnings of $206.6 million and diluted earnings per share of $1.33. The current quarter included a favourable impact due to foreign currency exchange rates of $0.17 per share, added the release.
As of March 31, 2025, Skechers operated a total of 5,318 stores globally, reflecting a net increase of 22 stores during the quarter. The company opened 101 new outlets while closing 79. The domestic store count rose from 610 to 618 with 13 openings and 5 closures. International stores increased from 1,177 to 1,203, while distributor, licensee, and franchise stores declined slightly to 3,497 after 50 openings and 62 closures.
'Our first quarter results reflect the continued strength of our business across the globe, a testament to our brand, the appeal of our innovative comfort technologies and distinctive value offering across our product portfolio,' said John Vandemore, chief financial officer (CFO) at Skechers. 'We remain confident in our ability to navigate the current market challenges, and know that our proven track record of managing this globally diverse brand with a unique and compelling product portfolio focused on delivering style, comfort, quality and innovation at a reasonable price will enable Skechers to endure and likely thrive during this time.'
Fibre2Fashion News Desk (SG)
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