LOS ANGELES - Skechers U.S.A., Inc. (NYSE:SKX), a global footwear leader, announced a 7.2% increase in second-quarter sales reaching $2.16 billion. The company's growth was attributed to a 9.2% rise in Direct-to-Consumer sales and a 5.5% increase in Wholesale. The reported diluted earnings per share were $0.91.
The company's performance was particularly strong in international markets despite facing challenges such as the Suez Canal crisis and a sluggish market in China. Notably, international Direct-to-Consumer and domestic wholesale sales surged by 15% and 14% respectively.
Skechers' gross margin improved by 220 basis points to 54.9%, mainly due to lower costs per unit influenced by reduced freight and a favorable mix of Direct-to-Consumer volumes. However, operating expenses climbed by 16.0% to $977.9 million, leading to a 5.1% decline in earnings from operations, which totaled $206.5 million. Net earnings for Skechers were reported at $140.3 million, a decrease from the previous year's $152.8 million.
On July 23, 2024, Skechers' Board of Directors authorized a new $1 billion share repurchase program, replacing the previous one from 2022. This move reflects the company's confidence in its financial strength and commitment to shareholder returns.
For the third quarter of 2024, Skechers anticipates sales between $2.30 and $2.35 billion and diluted earnings per share of $1.10 to $1.15. Moreover, the company has raised its full-year 2024 sales forecast to a range of $8.875 to $8.975 billion and diluted earnings per share to $4.08 to $4.18.
Skechers' global reach continues to expand, with the total number of stores now standing at 5,267 as of June 30, 2024, an increase from 5,168 stores at the end of 2023.
This financial performance update is based on a press release statement from Skechers U.S.A., Inc.
In other recent news, Skechers USA (NYSE:SKX) reported a record-breaking first quarter in 2024, with sales reaching $2.25 billion, a 12.5% increase from the previous year. The footwear company's gross margin improved to 52.5%, and the operating margin reached 13.3%. As part of its growth strategy, Skechers opened 52 new company-owned stores and 95 third-party stores in the first quarter, with plans to open between 155 to 170 new stores in 2024.
In other developments, TD Cowen raised Skechers' price target from $77.00 to $79.00, maintaining a "Buy" rating. This adjustment was attributed to the company's innovation cycle and competitive pricing strategy, which are expected to drive market share gains. Meanwhile, Deutsche Bank (ETR:DBKGn), Wells Fargo (NYSE:WFC), UBS, and BofA Securities also provided positive outlooks, setting price targets of $82, $83, $88, and $87 respectively, highlighting potential for revenue and earnings growth.
In a different sector, Saks Fifth Avenue's parent company, HBC, acquired competitor Neiman Marcus in a deal valued at $2.65 billion. The merger, involving tech giants Amazon (NASDAQ:AMZN) and Salesforce (NYSE:CRM) acquiring minority stakes, is expected to strengthen the position of these luxury retailers.
These recent developments reflect the evolving landscape for both Skechers and the luxury retail sector.
InvestingPro Insights
Skechers U.S.A., Inc. (NYSE:SKX) has demonstrated a robust performance in the second quarter, with notable sales growth and margin improvements. Delving into the financial metrics provided by InvestingPro, the company's market capitalization stands at $9.72 billion, underscoring its significant presence in the footwear industry. Skechers' P/E ratio, a measure of the company's current share price relative to its per-share earnings, is currently at 16.62, which aligns with an adjusted figure of 16.4 for the last twelve months as of Q1 2024. This valuation metric suggests that the company is trading at a reasonable price relative to its earnings, offering an attractive entry point for investors considering the company's near-term earnings growth.
InvestingPro Tips highlight that Skechers is operating with a moderate level of debt, which is a reassuring sign for investors concerned about the financial health and sustainability of the company. Additionally, analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook on the company's future performance. Furthermore, with liquid assets exceeding short-term obligations, Skechers appears to be in a solid position to meet its immediate financial commitments, which can be a comforting factor for stakeholders.
For those interested in further insights and detailed analysis, InvestingPro offers additional tips on Skechers, providing a comprehensive understanding of the company's financial standing and future prospects. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and unlock the full potential of InvestingPro's expert analysis. With 7 more InvestingPro Tips available, investors can gain a deeper insight into Skechers' financial performance and make more informed investment decisions.
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