Skechers’ sales in the fourth quarter decreased by 0.5 percent year-on-year to $1,324 million. The results were supported by a 143 percent surge in U.S. digital sales, after the group rolled out a ”Buy online pickup in store” (BOPIS) service in time for the holiday season. Net income fell by 10 percent to $53.3 million.
The company recorded a 1.1 percent sales increase in its international business, driven by wholesale, which offset declines in retail. It had a 2.8 percent decrease in its domestic business. Same-store sales tumbled by 13.4 percent, with decreases of 9.8 percent domestically and 21.7 percent outside the U.S.
Athletic lifestyle, walking and work footwear products for men and women drove wholesale growth in the U.S., which progressed by 1 percent to $299.4 million. The international wholesale business gained 2.5 percent, led by a 29.7 percent increase in China, as well as a 22.9 percent gain by Skechers’ European subsidiaries, led by the U.K., Germany and Spain. The company’s joint ventures recorded a sales increase of 19 percent, but sales to foreign distributors fell by 58 percent, over losses in the Middle East.
Direct-to-consumer (DTC) sales decreased by 6.4 percent, mainly because of temporary store closures and reduced operating hours. This was offset by a strong e-commerce performance in the U.S., thanks to the BOPIS service in stores or curbside at Skechers retail locations across the country. On the international side, the management said that DTC will benefit from new websites in Europe and South America. It added that Skechers is about to complete ongoing POS and loyalty program improvements to boost the omnichannel experience.
During the quarter, the company opened its first dedicated golf store, located at the premier Mission Hills resort in China. Worldwide, the total store count rose to 3,891, up from 3,770 at the end of the third quarter.
Overall, the gross margin expanded by one percentage point to 48.9 percent, rising in all segments thanks to a favorable mix of international and e-commerce sales. The operating margin fell by 2.7 percentage points to 4.4 percent.
For the full year, sales were down by 11.9 percent to $4,597 million, with net income dropping by 71.6 percent to $98.6 million. The gross margin inched down by 0.1 percentage points to 46.7 percent, as domestic wholesale and DTC improvements were offset by a decrease in international wholesale.
Moving forward, the company will continue to invest in its long-term growth potential. It will improve the supply chain in the U.S., Asia and Europe, while further enhancing its digital capabilities. In 2021, these investments will include a new distribution center in Colombia to serve the South American market, while full automation of the distribution center in China is expected by mid-year. A new distribution center has just been opened in the U.K. to compensate for Brexit-related nuisances. Skechers did not provide formal guidance for next year, but said it forecasts a return to growth.