Skechers saw sales grow by a solid 37 percent to $554.4 million for the third quarter ended Sept. 30, while net income rose by 49 percent to $36.4 million. The gross margin rose by 0.3 percentage points to 45.6 percent.
The sales gains were broad-based but led by the U.S. wholesale business, which had a 54 percent sales increase based on a rise of more than 30 percent in units and a 19 percent increase in average selling price. Men’s, women’s and kids’ all contributed to the increase.
Meanwhile, international wholesale had a 24 percent increase in sales while international distributors had a 19 percent improvement. With international now representing 22.5 percent of sales, Skechers said the momentum in that business was growing and it would represent a higher percentage of sales going forward. Own retail had a 17.5 percent increase, with domestic sales up by 14 percent including a 6 percent comparable sales increase and international up by 52 percent, partly on the addition of new stores in Chile.
The company sees the toning category coming in for a soft landing at a high level, believing that the category will whittle down to two or three main players and that it will maintain its market leadership. Some of the high costs it incurred in chasing the category in terms of distribution and advertising expense will start to moderate next year as well, though it seems likely that averages selling prices might also take a hit. It reports an uptick in toning sales for the holiday and believes that back-to-school is not a prime selling season for the category.
