Skechers U.S.A., Inc. SKX reported fourth-quarter 2024 results, wherein the top line surpassed the Zacks Consensus Estimate but the bottom line missed the same. However, both metrics increased year over year.

Skechers delivered a record-breaking quarter, driven by a strong holiday season and robust demand across all distribution channels. Both Wholesale and Direct-to-Consumer (DTC) sales saw significant growth, with sales increasing in the Americas, Europe, the Middle East & Africa (EMEA), and Asia Pacific (APAC), despite challenges in China. The company reported particularly strong performance in the United States, Europe, India and Japan.

Skechers continues to advance product innovation, exemplified by the launch of Skechers Cricket footwear in India. The company remains committed to expanding its global operations, including enhancing distribution centers in North America, China and Europe. SKX is focused on elevating the Direct-to-Consumer experience, highlighted by the opening of its first experiential performance store in Edmonton.

Skechers’ Quarterly Performance: Key Insights

Skechers reported earnings of 65 cents per share, missing the Zacks Consensus Estimate of 74 cents. However, the bottom line increased 16.1% from the year-earlier quarter. The company posted earnings on a constant currency basis of 86 cents per share, increased 53.6% from the year-earlier quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Skechers U.S.A., Inc. Price, Consensus and EPS Surprise

Skechers U.S.A., Inc. price-consensus-eps-surprise-chart | Skechers U.S.A., Inc. Quote

SKX generated sales of $2.212 billion, which marginally beat the consensus estimate of $2.211 billion. Also, the top line grew 12.8% year over year, driven by the rise of 18% and 9.8% in domestic and international sales, respectively. Improvements in domestic and international sales were driven by robust sales in DTC and Wholesale. On a constant-currency basis, total sales grew 14.1%.

The company’s wholesale increased 17.5% year over year to $1.13 billion, while DTC rose 8.4% to $1.08 billion. The Zacks Consensus Estimate for wholesale and DTC sales was pegged at $1.12 billion and $1.09 billion, respectively.

Wholesale increased 21.9% year over year in the Americas (“AMER”), 21.7% in EMEA and 4.6% in the APAC. Wholesale average selling price declined 0.6%, whereas the unit volume increased 18.1% year over year.

DTC sales growth included increases of 6.8% in domestic sales and 9.3% in international sales. The DTC unit volume rose 9.7% and the average selling price declined 1.2%. Also, growth of 7.6% in the AMER, 2.5% in the APAC and 32.7% in the EMEA aided the segment’s performance.

SKX’s Region Wise Performance Details

Region-wise, sales increased 14.2% year over year to $1.09 billion in the AMER, 24.8% to $478.6 million in the EMEA and 3.3% to $642.4 million in the APAC. The Zacks Consensus Estimate for net sales in the AMER, EMEA and APAC regions were pegged at $1.06 billion, $490.5 million and $672 million, respectively, for the quarter under review.

Skechers’ Margins & Costs Update

Gross profit increased 13.1% year over year to $1.18 billion. The gross margin increased 20 basis points (bps) to 53.3%, driven by favorable channel mix. 

Total operating expenses grew 11.2% year over year to $1.01 billion. The metric, as a percentage of sales, decreased 70 bps to 45.8%.

This Zacks Rank #4 (Sell) company’s selling expenses grew 7.7% from the year-ago period to $197.1 million, due to higher demand creation expenditures. Also, general and administrative expenses jumped 12% to $815.7 million. Increased costs resulted from elevated labor and facility costs, such as rent and depreciation.

SKX’s Financial Health Snapshot

As of Dec. 31, 2024, cash and cash equivalents totaled $1.12 billion, whereas short-term investments amounted to $118.5 million.

Skechers ended the quarter with long-term borrowings of $68.5 million and shareholders’ equity of $4.28 billion, excluding non-controlling interests of $452.9 million. The company incurred a capital expenditure of $133.4 million in the quarter. Management anticipates a capital expenditure of $600-$700 million for 2025, primarily for expanding distribution centers in the United States and China to support growth.

In the fourth quarter of 2024, the company repurchased 1.9 million shares of its Class A common stock for $120 million. As of Dec. 31, 2024, $789.9 million remained available under the share repurchase program.

Skechers’ Store Update

As of Dec. 31, 2024, SKX had 5,296 stores, including 610 domestic stores, 1,177 international locations and 3,509 distributors, licensees and franchise stores.

In the fourth quarter, the company opened 62 domestic stores, 206 international stores and 413 distributors, licensees and franchise stores. It closed 15 domestic stores, 114 international stores and 424 distributors, licensees and franchise stores in the same period.

What to Expect From SKX Ahead

For 2025, management targets sales between $9.70 billion and $9.80 billion, up from $8.97 billion recorded in 2024. It predicts earnings per share (EPS) between $4.30 and $4.50 compared with $4.16 reported in 2024.

For the first quarter of 2025, SKX is likely to achieve sales between $2.40 billion and $2.43 billion and EPS between $1.10 and $1.15.

Shares of this Zacks Rank #4 (Sell) company have gained 21.4% in the past three months compared with the industry’s 0.5% growth.

Image Source: Zacks Investment Research

Key Picks

Wolverine World Wide, Inc. WWW designs, manufactures, sources, markets, licenses and distributes footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here. 

WWW delivered a trailing four-quarter average earnings surprise of 17%. The Zacks Consensus Estimate for Wolverine World Wide’s current-quarter earnings indicates growth of 236.7% from the year-ago reported figures.

Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. It flaunts a Zacks Rank #1 at present. BOOT delivered a trailing four-quarter average earnings surprise of 7.2%.

The consensus estimate for Boot Barn Holdings’ current financial-year sales and earnings indicates growth of 14.9% and 21.4%, respectively, from the prior-year actuals.

Deckers Outdoor Corporation DECK designs, markets and distributes footwear, apparel and accessories for casual lifestyle use and high-performance activities. It currently sports a Zacks Rank #1. DECK delivered a trailing four-quarter earnings surprise of 36.8%, on average. 

The Zacks Consensus Estimate for Deckers Outdoor’s current financial-year sales and earnings implies an improvement of 15.3% and 20%, respectively, from the prior-year actuals.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

Wolverine World Wide, Inc. (WWW) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research