Skechers' (SKX) Omnichannel Initiatives Appear Robust
Skechers U.S.A., Inc. SKX looks well poised for future, thanks to its focus on boosting omnichannel growth by expanding the direct-to-consumer business and enhancing its foothold internationally. SKX has been gaining from growth in its domestic and international channels for a while now, driven by wholesale and direct-to-consumer sales. In addition, continued global demand for its Comfort Technology footwear remains a key driver.
Let’s Delve Deeper
Skechers has been directing its resources toward digital capability enhancement and the advancement of its websites, mobile application and loyalty program. Management updated its point-of-sale systems to better engage with customers, both offline and online. Initiatives such as “Buy Online, Pick-Up in Store” and “Buy Online, Pickup at Curbside” are worth mentioning. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales.
In addition, Skechers has been enhancing its distribution facilities and supply-chain production capabilities for sometime now. In second-quarter 2022, SKX continued the rollout of its new e-commerce platform, including the launch of sites in Belgium, the Czech Republic, Hungary, Italy, the Netherlands and Portugal. Management plans to launch two additional sites in Europe, two in South America and one in Japan. SKX’s direct-to-consumer sales rose 4.3% in the reported quarter. Hence, management aims at accomplishing the $10 billion annual sales target by 2026.
We note that Skechers continues to offer a diversified portfolio of brands that includes a wide range of fashion, athletic, non-athletic and work footwear at compelling prices. We believe that this multi-brand strategy enables SKX to roll out products and reach a wide range of customers. Additionally, SKX is focusing on comfort-based footwear and apparel products as consumers are embracing a relaxed lifestyle.
Skechers’ international business remains a significant sales driver. SKX is poised to enhance its global reach in the footwear market through its distribution networks, subsidiaries and joint ventures. In second-quarter 2022, international sales increased 10% year over year. Region-wise, sales increased 21% year over year to $1,033.9 million in the Americas and 8% to $374.5 million in EMEA. Strength in India, South Korea and Malaysia acted as a primary lever.
Overall, Skechers is making strategic investments to improve infrastructure worldwide, primarily on the e-commerce platforms and in distribution centers. Sharing space with Wolverine WWW, Steven Madden SHOO and Deckers DECK, SKX is also focusing on designing and developing new products. In 2022, management plans to introduce more innovative and comfort technology products, build multi-platform marketing campaigns and launch more e-commerce sites around the world.
We believe that a greater emphasis on the new line of products, cost-containment efforts, inventory management and the global distribution platform is likely to keep driving SKX’s results ahead.
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