Skechers Shares Drop on Q4 Earnings Miss — Even as E-Commerce Grows Triple Digits
Shares for Skechers USA Inc. are slipping in after-hours trading after the casual shoemaker posted fourth-quarter sales that were in line with expectations but its profits fell short of analysts’ bets.
As of 4:30 p.m. ET, SKX shares were down 8.2% to $34.15.
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The Manhattan Beach, Calif.-based brand said today that, despite COVID-19 disruptions, its Q4 sales decreased a modest 0.5% to $1.32 billion, which was consistent with forecasts as a 2.8% decrease in the company’s domestic sales partially offset by a 1.1% increase internationally. Profits, meanwhile, declined 10% to $53.3 million, or 34 cents per share. On an adjusted basis, earnings per share came in at 24 cents and missed analysts’ bets for 30 cents per share.
As the global health crisis led people to stay indoors due to personal apprehensions as well as government restrictions in some cities, Skechers continued to enjoy momentum in e-commerce — where sales shot up 142.7% — and in certain international markets, particularly in China.
The company’s international wholesale business advanced 2.5% led by a 29.7% increase in China, as well as double-digit increases in Chile, United Kingdom, Germany and Spain, according to COO David Weinberg. Its direct-to-consumer sales, meanwhile, decreased 6.4%, primarily due to the temporary closures and reduced store operating hours, the company said.
“In the face of the continuing global pandemic, Skechers experienced sales down only half a percent from the record fourth quarter sales of 2019, a significant accomplishment during this challenging time and a testament to the strength and relevance of our brand,” Weinberg added.
For the full year, the company posted revenues of $4.6 billion, a year over year decline of 12%. Its profits plunged 72% to $98.6 million, or 64 cents per share, although CEO Robert Greenberg said the company — like several others in the fashion and footwear space — started off 2020 in a strong position before the pandemic hit hard.
“For Skechers, 2020 began with positive momentum following a year of record sales, but the global pandemic put us to the test,” Greenberg said. “This past year, we were forced to act and react faster and continue to do so given the on-going health crisis. In the fourth quarter, we nearly drove our sales to a new fourth quarter record.”
He continued, “Our consumers want comfort and familiarity, especially those working from home and essential workers … We have a history of delivering quality and value, and athletic lifestyle footwear is one of our leading product categories … Remaining authentic was paramount in 2020, but the challenges we faced last year and are still facing in 2021, have created an even more agile and focused company — one with products that will remain in-demand during the ongoing crisis and beyond.”
The company did not provide a fiscal year outlook citing the ongoing business disruption and substantial uncertainty surrounding the impact of the COVID-19 pandemic on its business globally.
