Skechers Announces 2024 Record Annual Sales of $8.97 Billion

Business Wire 6-Feb-2025 4:05 PM

Skechers U.S.A., Inc. ("Skechers" or the "Company") (NYSE:SKX), The Comfort Technology Company^® and a global footwear leader, today announced financial results for the fourth quarter and full year ended December 31, 2024.

Full Year 2024 Highlights

• Sales of $8.97 billion, a year-over-year increase of 12.1%; sales of $9.04 billion on a constant currency basis, a year-over-year increase of 13.0%
• Wholesale sales grew 13.2%
• Direct-to-Consumer sales grew 10.7%
• Diluted earnings per share of $4.16, a year-over-year increase of 19.2%; diluted earnings per share on a constant currency basis of $4.40, a year-over-year increase of 26.1%

Fourth Quarter 2024 Highlights

• Sales of $2.21 billion, a year-over-year increase of 12.8%
• Wholesale sales grew 17.5%
• Direct-to-Consumer sales grew 8.4%
• Diluted earnings per share of $0.65, a year-over-year increase of 16.1%; diluted earnings per share on a constant currency basis of $0.86, a year-over-year increase of 53.6%
• Repurchased $120.0 million of Class A common stock

"We delivered record full year sales of $8.97 billion in 2024, or $9.04 billion on a constant currency basis, reflecting the continued robust global consumer demand supported by effective marketing campaigns," began David Weinberg, Chief Operating Officer of Skechers. "The year ended with a strong holiday season that enabled record fourth quarter sales of $2.21 billion. Quarterly sales reflect 17% growth in Wholesale and 8% in Direct-to-Consumer, as well as 18% domestically and 10% internationally. By region, sales grew 14% in the Americas, 25% in EMEA, and 3% in APAC, despite continued headwinds in China. We saw particularly strong results in the United States, across Europe, in India and in Japan. Though challenging market and shipping conditions persisted in a few countries, the strength of our business is attributable to our differentiated market position, a highly attractive value proposition that combines comfort, innovation, style and quality at an attainable price. We continue to advance our product innovation with comfort technologies across the portfolio, the latest example of which is our Skechers Cricket footwear in India. Additionally, we remain committed to investing in our operations, including the expansion of our distribution centers in North America, China and Europe, as well as delivering an exceptional customer experience in Direct-to-Consumer such as with the opening of our first experiential performance store in Edmonton."

"Our 2024 record sales were driven by a strong response to our comfort technology products, and the outstanding execution of our talented and dedicated team in developing, marketing and managing the strategic allocation of our footwear, apparel and accessories worldwide," began Robert Greenberg, Chief Executive Officer of Skechers. "The flexibility, determination and creative spirit of the Skechers organization is unparalleled. Our innovative comfort business closely aligns with the needs of consumers of all ages, genders, activities and professions who are embracing our lifestyle and performance product offering. The global demand for our business is a true testament to our ability to continuously evolve our diverse product portfolio and effectively create excitement for our innovations through powerful marketing campaigns. The success of our Skechers Hands Free Slip-ins during the holiday period was fueled in part by campaigns featuring Howie Mandel and Martha Stewart, among others. In our Performance Division, in 2024 we expanded our team of athletes with noted soccer players across Europe, Asia and South America, and NBA and WNBA basketball players, including Philadelphia 76ers' Joel Embiid, LA Sparks' Rickea Jackson, and most recently Charlotte Hornets' Josh Green – all of whom have sought out Skechers for our comfort that performs. While the lifestyle division with our many innovative features remains a key sales driver, we are committed to ensuring athletes at all levels can comfortably excel, and we believe our performance division with basketball, soccer, golf, running and pickleball footwear also has tremendous growth opportunity globally. We are confident in our strategic product, marketing and operational plans executed by our dedicated team will result in notable achievements and continued growth in the coming year."

Fourth Quarter 2024 Financial Results

Fourth quarter sales increased 12.8% as a result of an 18.0% increase domestically and a 9.8% increase internationally. Wholesale increased 17.5% and Direct-to-Consumer increased 8.4%. On a constant currency basis, sales increased 14.1%.

Wholesale sales grew $168.1 million, or 17.5%, including increases in AMER of 21.9%, EMEA of 21.7%, and APAC of 4.6%. Wholesale volume increased 18.1% and average selling price declined 0.6%.

Direct-to-Consumer sales grew $83.4 million, or 8.4%, including increases in AMER of 7.6%, EMEA of 32.7%, and APAC of 2.5%. Direct-to-Consumer volume increased 9.7% and average selling price declined 1.2%.

Gross margin was 53.3%, an increase of 20 basis points, due to favorable channel mix.

Operating expenses increased $101.7 million, or 11.2%, and as a percentage of sales decreased 70 basis points to 45.8%. Selling expenses increased $14.2 million, or 7.7%, and as a percentage of sales decreased 40 basis points to 8.9%. The increase was primarily due to demand creation expenditures, which improved as a percentage of sales. General and administrative expenses increased $87.5 million, or 12.0%, and as a percentage of sales decreased 30 basis points to 36.9%. Increased expenses were primarily driven by labor and facility costs, including rent and depreciation.

Earnings from operations increased $35.2 million, or 27.0%, to $165.5 million.

Net earnings attributable to Skechers were $99.3 million and diluted earnings per share were $0.65 compared with prior year net earnings of $87.2 million and diluted earnings per share of $0.56. The current year was impacted by unfavorable foreign currency exchange rates. On a constant currency basis, diluted earnings per share were $0.86, or an increase of 53.6%.

In the fourth quarter, the Company's effective income tax rate was 11.8%. Compared to the prior year, the decrease was due to a favorable mix of earnings in lower tax jurisdictions and impacts from foreign currency losses.

"Skechers delivered exceptional results in 2024 and exceeded our expectations on a constant currency basis with full year sales of $9.04 billion and earnings per share of $4.40," stated John Vandemore, Chief Financial Officer of Skechers. "Rooted in our innovative comfort technology products and compelling value proposition, our financial performance illustrates the strength of our global diversification and compelling product offering."

Full Year 2024 Financial Results

Full year sales increased 12.1%, reflecting 12.1% increases in both international and domestic sales. Wholesale increased 13.2% and Direct-to-Consumer increased 10.7%. On a constant currency basis, sales increased 13.0%.

Wholesale sales increased $595.7 million, or 13.2%, due to increases in AMER of 14.5%, EMEA of 16.7%, and APAC of 5.7%. Wholesale volume increased 13.7% and average selling price declined 0.4%.

Direct-to-Consumer sales grew $373.4 million, or 10.7%, due to increases in EMEA of 38.3%, AMER of 6.6%, and APAC of 8.0%. Direct-to-Consumer volume increased 11.2% and average selling price declined 0.5%.

Gross margin was 53.2%, an increase of 120 basis points, due to lower costs per unit, driven by lower freight.

Operating expenses increased $495.5 million or 14.7%. As a percentage of sales, operating expenses increased 100 basis points to 43.1%. Selling expenses increased $123.7 million or 18.3%, primarily due to higher global demand creation expenditures. General and administrative expenses increased $371.8 million or 13.8%, primarily driven by labor and facility costs, including rent and depreciation.

Earnings from operations increased $119.5 million to $904.3 million, resulting in an operating margin of 10.1%.

Net earnings attributable to Skechers were $639.5 million and diluted earnings per share were $4.16, an increase of 19.2% over the prior year. The current year was impacted by unfavorable foreign currency exchange rates. On a constant currency basis, diluted earnings per share were $4.40, or an increase of 26.1%.

The Company's effective income tax rate was 16.9%. Compared to the prior year, the decrease was due to a favorable mix of earnings in lower tax jurisdictions, the release of certain allowances and other provision adjustments.

Balance Sheet

Cash, cash equivalents and investments totaled $1.38 billion, a decrease of $4.8 million, or 0.3% from December 31, 2023, due to capital expenditures of $416.8 million and $330.1 million of share repurchases, partially offset by earnings.

Inventory was $1.92 billion, an increase of $394.0 million or 25.8% from December 31, 2023, due to growth in our business, which included elevated merchandise in-transit, partially attributable to the Suez Canal disruption.

Share Repurchases

During the fourth quarter, the Company repurchased 1.9 million shares of its Class A common stock at a cost of $120.0 million. In 2024, the Company repurchased 5.2 million shares of its Class A common stock at a cost of $330.1 million. As of December 31, 2024, $789.9 million remained available under the Company's share repurchase program.

Outlook

For the fiscal year 2025, the Company believes it will achieve sales between $9.70 and $9.80 billion and diluted earnings per share between $4.30 and $4.50. The Company believes that for the first quarter of 2025, it will achieve sales between $2.40 and $2.43 billion and diluted earnings per share between $1.10 and $1.15. The Company believes the income tax rate for fiscal year 2025 will be between 22% and 23%, reflecting the impact of global minimum tax regulations. Further, the Company believes that total capital expenditures will be between $600 and $700 million in 2025, which includes investment in expanding our distribution centers in the U.S. and China for future growth.

Store Count

Fourth Quarter 2024 Conference Call

The Company will host a conference call at 4:30 p.m. ET / 1:30 p.m. PT on February 6, 2025 to discuss its fourth quarter 2024 financial results. The call can be accessed on the Investor Relations section of the Company's website at investors.skechers.com. For those unable to participate during the live broadcast, a replay will be available beginning February 6, 2025, at 7:30 p.m. ET, through February 20, 2025, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13750671.

About Skechers U.S.A., Inc.

Skechers, The Comfort Technology Company^® based in Southern California, designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. The Company's collections are available in approximately 180 countries and territories through third-party retailers, marketplaces, skechers.com, and approximately 5,300 Skechers retail stores. A Fortune 500^® company, Skechers manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. For more information, please visit about.skechers.com and follow us on Facebook, Instagram and TikTok.

Reference in this press release to "Sales" refers to Skechers' net sales reported under GAAP. This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation, Skechers' future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as "believe," "anticipate," "expect," "estimate," "intend," "plan," "project," "will," "could," "may," "might," or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the disruption of business and operations due to` delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of wars, acts of war and other conflicts around the world; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in Skechers' annual report on Form 10-K for the year ended December 31, 2023 and its quarterly reports on Form 10-Q in 2024. Taking these and other risk factors into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS U.S.A., INC. AND SUBSIDIARIES Reconciliation of GAAP Earnings Financial Measures to Corresponding Non-GAAP Financial Measures (Unaudited)

Constant Currency Adjustment (Non-GAAP Financial Measure)

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company's performance. We calculate constant currency percentages by converting our current period local currency financial results using the prior-period exchange rates and comparing these adjusted amounts to our prior period reported results.

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Investor Relations Sonia Reback Eunice Han investors@skechers.com

Press Jennifer Clay jennc@skechers.com