Skechers U.S.A., Inc. (SKX) shares are on a roll, surging over 8% in pre-market trading on Friday after the footwear giant delivered a strong third-quarter earnings report that exceeded Wall Street expectations. The company’s sales growth of 15.9% year-over-year, reaching $2.35 billion, outpaced the consensus estimate of $2.306 billion. This impressive performance reflects Skechers’ continued global expansion and its ability to navigate challenging market conditions.
The company’s success is evident in its strong regional sales figures. EMEA (Europe, Middle East, and Africa) saw a remarkable 30% sales increase, fueled by double-digit growth across all countries. The Americas region, led by robust sales in the U.S. and Canada, experienced a 14% sales bump. Meanwhile, Asia Pacific achieved a 7% sales growth, with several countries reporting double-digit gains. Skechers’ diversified geographic footprint is a key driver of its success.
Skechers’ robust sales translated into a 14.1% increase in gross profit to $1.223 billion. While gross margin dipped slightly to 52.1% (down 80 basis points from the prior year), this was primarily attributed to lower average selling prices, a trend seen across various industries. Despite this, Skechers’ ability to maintain a strong gross margin speaks volumes about its pricing power and cost management strategies.
Earnings per share (EPS) also surpassed expectations, reaching $1.26 compared to the consensus estimate of $1.15. This strong earnings performance underscores the company’s ability to translate sales growth into profitability. Investors are clearly responding positively to these results, as evidenced by the significant pre-market stock surge.
Looking ahead, Skechers remains optimistic about its future prospects. The company has raised its full-year 2024 EPS guidance from $4.08 – $4.18 to $4.20 – $4.25, surpassing the consensus estimate of $4.15. Skechers also boosted its FY24 sales guidance from $8.875 billion – $8.975 billion to $8.925 billion – $8.975 billion, aligning with the consensus estimate of $8.932 billion. This revised guidance reflects the company’s confidence in achieving its ambitious goal of reaching $10 billion in sales by 2026.
For the fourth quarter, Skechers expects sales of $2.165 billion – $2.215 billion (consensus $2.217 billion) and earnings per share of $0.70 – $0.75 (consensus $0.75). This outlook suggests continued growth in the coming months, further bolstering investor confidence.
Skechers’ CEO, Robert Greenberg, expressed his excitement about the company’s recent milestones, including the signing of television host Howie Mandel and the launch of a campaign with him. Greenberg also highlighted the company’s growing presence in team sports, with a global rollout of Skechers court, football (soccer), basketball, and cleated styles, featuring a roster of Olympians and elite athletes. These strategic initiatives demonstrate Skechers’ commitment to expanding its product portfolio and market reach.
John Vandemore, Skechers’ CFO, echoed this sentiment, stating that the strong Q3 results reinforce the company’s confidence in achieving its long-term growth objectives. Skechers’ ability to capitalize on global market trends and its commitment to innovation position it for continued success in the footwear industry.