In reporting a strong 23.1 percent increase in overall revenues to $1,330 million for the fourth quarter of 2019, Skechers’ management revealed that it is developing a new omni-channel retailing platform where its brick-and-mortar stores will be more integrated with its e-commerce operations.
Online sales still represent less than 15 percent of the company’s direct-to-consumer (DTC) revenues, but they are experiencing triple-digit growth in some months. E-commerce capabilities will be extended to every foreign subsidiary.
The 23.1 percent sales increase achieved in the fourth quarter was driven by a 33 percent gain in wholesale revenues outside the U.S. and by a 31.2 percent increase in total international sales, which actually went up by 32 percent in constant currencies and came to represent 59 percent of the total turnover.
Domestic wholesale revenues rose by 10 percent. The DTC business went up by 19 percent overall, with same-store sales rising by 10.3 percent in the U.S. and by 8.8 percent elsewhere.
Skechers’ total store count rose to 3,547 worldwide after the net addition of 21 directly operated stores and 219 third-party stores during the quarter.
The gross margin improved by 0.2 percentage points to 47.9 percent in the period, thanks to higher average selling prices and despite the higher U.S. duties on imports from China. The operating margin declined by 0.6 percentage points to 7.1 percent, but net earnings rose by 25.5 percent to $59.5 million.
For the full financial year, revenues grew by 12.5 percent to $5,220 million, driven by a 24.3 percent currency-neutral increase in the international business. The gross margin declined to 47.7 percent, but the operating margin went up to 9.9 percent and the company ended up with a net profit of $346.6 million, up from $301.0 million in the prior year.