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Shares for Skechers USA Inc. are higher in after-hours trading following the release of its better-than-expected financial report, which showed signs that a sales recovery is on the horizon for the brand.
For the second quarter ended June 3, the Manhattan Beach, Calif.-based company posted a net loss of $68.1 million and diluted loss per share of 44 cents, compared with the prior year’s profits of $75.2 million and earnings per share of 49 cents. Revenues decreased 42% to $729.5 million.
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Analysts had forecasted a loss of 66 cents per share and revenues of $659.7 million. Skechers’ stock subsequently rose nearly 8% to $33.50 as of 4:30 p.m. ET.
The shoe maker recorded a 37.8% drop in its international business and 47.3% dip for its domestic arm. Its international sales declines were partially offset by an 11.5% increase in China.
With nearly all of its locations around the world shuttered at some point during the quarter due to government-mandated closures, Skechers saw a 428.2% surge in its e-commerce business. (Its direct-to-consumer business as a whole, however, fell 47.1%.)
“Despite the challenges of the second quarter, we are optimistic about the early-stage recovery we are seeing in much of our business, including a return to growth in China and the explosive growth of our e-commerce channel,” CFO John Vandemore said in a statement.
COO David Weinberg added, “While every country’s recovery has been unique, we began to see a similar recovery trend, first reflected in China and now extending into other markets globally including Australia, Germany, South Korea and Taiwan.”
Today, more than 90% of outposts in Skechers’ global brick-and-mortar fleet have reopened to the public. In an effort to maintain financial flexibility, the company drew down $490 million from its unsecured credit facility in the first quarter and ended the second quarter with cash, equivalents and investments worth $1.56 billion.
“Skechers, like most businesses around the world, has never faced a more challenging time than during the pandemic, which caused the closing of nearly every market worldwide,” CEO Robert Greenberg said. “In the face of this ongoing challenge, I am extremely proud of our company. We are a resilient organization driven by a dedicated and flexible team determined to do what it takes to not only survive but position ourselves for a return to profitability.”
For the first six months of the year, Skechers logged a net loss of $19 million and diluted loss per share of 12 cents, compared with the prior year’s $183.9 in profits and $1.19 in earnings per share. Revenues during that period dove 22.2% to $1.97 billion. It did not provide further financial guidance due to uncertainties stemming from the coronavirus pandemic.