Wholesale sales drive Skechers forward in full year results
Global footwear business Skechers has revealed record quarterly sales of $1.88 billion, a year-over-year increase of 13.5%, largely driven by wholesale sales.
Q4 saw sales at Skechers increased 13.5% as a result of a 22.3% increase domestically and an 8.7% increase internationally, led by strength in wholesale sales. All segments experienced growth, with wholesale increasing 15.7% and direct-to-consumer increasing 10.8%.
Wholesale sales growth of $142.4 million, or 15.7%, was led by increases in EMEA of 31.1%. Wholesale volume increased 9.4% and average selling price increased 6.3%.
Direct-to-Consumer sales growth of $81.0 million, or 10.8%, was led by increases in America of 27.0%. Direct-to-Consumer volume increased 14.8% and average selling price decreased 3.5%.
Operating expenses increased $107.9 million, or 15.1%, and as a percentage of sales increased 60 basis points to 43.8%. Selling expenses increased $19.0 million, or 13.7%, due to higher global digital and brand demand creation expenditures.
Full year sales, ending 31 December 2022, increased by 18.0%, reflecting a 20.0% increase domestically and a 16.6% increase internationally. Both segments experienced increases, with wholesale increasing 23.2% and direct-to-consumer increasing 10.2%.
Wholesale sales in the year reached $873.8 million (a 23.2% rise), whilst direct-to-consumer sales grew by 10.2% to $260.5 million. Gross margin was 47.2%, a decrease of 230 basis points, primarily the result of higher freight and logistics costs, partially offset by average selling price increases.
Robert Greenberg, Chief Executive Officer of Skechers, commented: “Starting our fourth decade of business as a $7.4 billion company that grew over $1 billion this past year is a phenomenal achievement and one that leaves me with overwhelming pride for the dedication, creativity and insight of the global Skechers team. With their flexibility and drive, along with the support of both our loyal partners and consumers, we expect to achieve continued success across all areas of the business.
“With the goal of $10 billion in sales by 2026, our aim is high, but we believe attainable due to several factors. Our range of comfort technology products is broader and more appealing than ever, and many new attention-grabbing collaborations are planned throughout this year. We are committed to our marketing strategy and will be revealing even more surprising star power in 2023, which we expect will enable us to reach a more diverse audience.”
David Weinberg, Chief Operating Officer of Skechers, added: “2022 was another milestone year for Skechers as we achieved record annual sales of $7.4 billion. This increase of $1.1 billion, or 18%, from the prior year was the result of four quarterly sales records, including fourth quarter sales of $1.88 billion.
“With the recent elimination of the zero-COVID policy, we believe that our business in China will improve throughout 2023. In addition, while the inventory challenges at our domestic distribution centre have been difficult to navigate, we are seeing improvements and remain confident in the strength of our brand and the demand for our products. We ended the year strong and expect to see continued growth in 2023.”
For the fiscal year 2023, the footwear business believes it will achieve sales between $7.75 billion and $8.0 billion.