"Skechers achieved a new quarterly sales record of 1.87 billion US dollars, a significant accomplishment especially given the macroeconomic headwinds, supply chain issues and COVID-related restrictions in China during the period. The growth was the result of increases in sales of 15% in our domestic and 10% in our international businesses (…) During the quarter, we focused on delivering our in-demand footwear direct to consumers and through our wholesale partners globally. While we remain cautious given the challenges across the globe, we believe our comfort technology footwear, impactful marketing and the strength of our brand will drive continued sales growth in the back half of the year", commented David Weinberg, Chief Operating Officer of Skechers.

Second Quarter Results

In the second quarter of fiscal 2022, Skechers' sales grew by 12.4%, as a result of a 15.4% increase in domestic sales and a 10.% increase in international sales, reaching 1.87 billion US dollars, on a comparable basis to the same period last year. This result was primarily driven by the strength of the wholesale segment. On a constant currency basis, sales increased by 16.4%.

The wholesale sales growth of 176.1 million US dollars, or 18.3%, was driven by an increase of 34.9% in the Americas region. In turn, the direct-to-consumer rise of 29.8 million US dollars, or 4.3%, was led by increases in the Americas (by 3.7%), EMEA* (by 13.5%) and APAC** (2.7%) regions. The company detailed that in the APAC region, where sales were flat due to COVID-related restrictions in China, "we saw strong growth in most other markets, particularly in India, South Korea and Malaysia".  

Gross margin declined by 330 basis points to 48.1% in the three months to the 30^th of June, as compared to the same quarter of fiscal 2021, "primarily driven by higher per unit freight costs partially offset by average selling price increases".

Net earnings in the period were 90.4 million US dollars and diluted earnings per share corresponded to 0.58 US dollars, which reflects a decrease of 34.1% over the second quarter of the prior year. The company added that diluted earnings per share included an "unfavourable impact of 0.11 US dollars due to declines in foreign exchange rates, mainly in the EMEA.

First Half Results

In the first half of fiscal 2022, Skechers' sales rose by 19.1%, reflecting a 21.4% increase in domestic sales and a 17.3% increase in international sales. Wholesale segment sales, which contributed the most to the final result, grew by 25.4%, and direct-to-consumer sales were up by 9.0%. On a constant currency basis, the company's total sales increased 22.1%.

Net earnings totalled 211.6 million US dollars in the first half of the current fiscal year, and diluted earnings per share were 1.35 US dollars, which reflects a decline of 10.6% over similar period of the prior year.

Outlook

For the third quarter of 2022, Skechers expects to reach sales between 1.80 billion US dollars and 1.85 billion US dollars and diluted earnings per share in the range of 0.70 US dollars and 0.75 US dollars. Furthermore, for the current fiscal year, the company believes it will achieve sales between 7.2 billion US dollars and 7.4 billion US dollars and diluted earnings per share of between 2.60 US dollars and 2.70 US dollars.