Skechers delivered another quarter of record sales on Tuesday, reporting double-digit growth in its wholesale and direct-to-consumer segments.
In the third quarter of 2022, the Los Angeles-based footwear company reported total sales of $1.88 billion, a 20.5% increase over the same period last year.
In a statement on Tuesday, Skechers noted that Q3 sales gains are the result of a 14.9% increase domestically and a 24.6% increase internationally, primarily driven by strength in its wholesale sales. All segments experienced growth, with wholesale increasing 26.2% to $247.1 million and direct-to-consumer increasing 11.9% to $72.8 million.
“All regions grew, led by EMEA with improvements of 48% as we realized growth across our largest European subsidiaries—Germany, Spain, and the United Kingdom, as well as strong distributor growth,” Skechers COO David Weinberg said in a statement.
Weinberg added that the Americas achieved 16% growth, primarily due to robust demand in the United States and Canada, and the APAC region grew 9% despite the COVID-related challenges in China and Japan during the quarter.
Along with this sales growth though, Skechers reported its net earnings for Q3 were $85.9 million, a decrease of 16.7% over the prior year. Similarly, gross margins in the quarter took a hit of 280 basis points to 47.1%. The company said this was primarily the result of increased freight and logistics costs, and a higher proportion of distributor sales, partially offset by average selling price increases.
Skechers’ stock was down 11.86% in post market trading on Tuesday after ending the day up 3.57% at $35.93 a share.
Looking ahead, Skechers expects to achieve sales between $1.725 billion and $1.775 billion and diluted earnings per share of between $0.30 and $0.40 for the fourth quarter of 2022.
“As we continue to grow towards our goal of $10 billion in annual sales by 2026, we remain as focused and as dedicated as we were from the year we started Skechers,” Robert Greenberg, CEO of Skechers, added. “With three decades of experience, we will continue to approach each day as a new opportunity to be the best we can be at designing, marketing and delivering innovation and comfort to the world.”