Skechers(SKX) - 2025 Q2 - Quarterly Results

Financial Performance Overview Second Quarter 2025 Financial Results Skechers reported strong top-line growth in the second quarter of 2025, with sales increasing 13.1% year-over-year to $2.44 billion, while profitability was impacted by higher operating expenses Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $2,440.0M | $2,157.6M | 13.1% | | Gross Profit | $1,301.3M | $1,184.4M | 9.9% | | Gross Margin | 53.3% | 54.9% | (160) bps | | Earnings from Operations | $173.1M | $206.5M | (16.2)% | | Operating Margin | 7.1% | 9.6% | (250) bps | | Net Earnings | $170.5M | $140.3M | 21.5% | | Diluted EPS | $1.13 | $0.91 | 24.2% | - Sales growth was positively impacted by foreign currency exchange rates, which contributed $33.9 million[6] - On a constant currency basis, sales grew 11.5%[6] - Growth was observed across both major sales channels: Wholesale Sales grew 15.0%, and Direct-to-Consumer Sales grew 11.0%[6] First Half 2025 Financial Results For the first six months of 2025, Skechers achieved sales of $4.85 billion, a 10.0% increase, but experienced margin contraction similar to the quarterly results H1 2025 Financial Highlights (vs. H1 2024) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $4,851.6M | $4,409.2M | 10.0% | | Gross Profit | $2,555.7M | $2,366.1M | 8.0% | | Gross Margin | 52.7% | 53.7% | (100) bps | | Earnings from Operations | $438.2M | $505.3M | (13.3)% | | Operating Margin | 9.0% | 11.5% | (240) bps | | Net Earnings | $372.9M | $346.9M | 7.5% | | Diluted EPS | $2.46 | $2.24 | 9.8% | Segment and Geographic Performance Performance by Sales Channel In Q2 2025, both sales channels demonstrated growth, with Wholesale sales increasing by 15.0% and Direct-to-Consumer (DTC) sales growing 11.0%, though Wholesale gross margin compressed Q2 2025 Sales Channel Performance (vs. Q2 2024) | Channel | Sales | Growth (%) | Gross Margin | Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Wholesale | $1,301.4M | 15.0% | 41.4% | (250) bps | | Direct-to-Consumer | $1,138.6M | 11.0% | 67.0% | 0 bps | H1 2025 Sales Channel Performance (vs. H1 2024) | Channel | Sales | Growth (%) | Gross Margin | Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Wholesale | $2,833.6M | 11.0% | 42.8% | (150) bps | | Direct-to-Consumer | $2,018.0M | 8.8% | 66.5% | 0 bps | Performance by Geography International markets, particularly EMEA, drove Q2 2025 growth with a 22.0% surge, while domestic sales were nearly flat and China experienced a downturn Q2 2025 Geographic Sales (vs. Q2 2024) | Geography | Sales | Growth (%) | | :--- | :--- | :--- | | Domestic | $862.1M | (0.2)% | | Wholesale | $413.3M | (7.5)% | | Direct-to-Consumer | $448.8M | 7.6% | | International | $1,577.9M | 22.0% | | Wholesale | $888.1M | 29.6% | | Direct-to-Consumer | $689.8M | 13.3% | Q2 2025 Regional Sales (vs. Q2 2024) | Region | Sales | Growth (%) | | :--- | :--- | :--- | | Americas (AMER) | $1,113.0M | 1.1% | | EMEA | $731.5M | 48.5% | | Asia Pacific (APAC) | $595.5M | 5.5% | | China (included in APAC) | $287.2M | (8.2)% | Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, Skechers reported a healthy balance sheet with total assets of $9.28 billion, increased cash, and slightly decreased inventory Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $4,851,711 | $4,449,423 | | Cash and cash equivalents | $1,377,152 | $1,116,516 | | Inventory | $1,871,805 | $1,919,386 | | Total Assets | $9,278,116 | $8,455,758 | | Total Current Liabilities | $2,315,937 | $2,256,484 | | Total Liabilities | $3,902,607 | $3,635,494 | | Total Stockholders' Equity | $5,273,135 | $4,730,165 | Condensed Consolidated Statements of Earnings The Q2 2025 income statement shows total sales of $2.44 billion, with increased operating expenses leading to lower earnings from operations, partially offset by significant other income Q2 2025 Statement of Earnings (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $2,440,024 | $2,157,643 | | Gross Profit | $1,301,303 | $1,184,437 | | Total Operating Expenses | $1,128,221 | $977,906 | | Earnings from Operations | $173,082 | $206,531 | | Other Income (Expense) | $45,517 | $(1,652) | | Net Earnings | $182,705 | $164,524 | | Net Earnings Attributable to Skechers | $170,498 | $140,302 | Non-GAAP Financial Measures Reconciliation of GAAP to Constant Currency Measures Skechers provides non-GAAP constant currency measures to exclude foreign exchange rate volatility, revealing an 11.5% sales growth and an 8.8% diluted EPS decline year-over-year in Q2 2025 on this basis - The company presents constant currency results to facilitate period-to-period comparisons of its business performance, excluding the volatility of foreign currency exchange rates[17] Q2 2025 GAAP vs. Constant Currency (Non-GAAP) | Metric | Reported GAAP | Constant Currency Adj. | Non-GAAP Measure | YoY Change (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Sales | $2,440.0M | $(33.9)M | $2,406.1M | 11.5% | | Net Earnings | $170.5M | $(44.2)M | $126.3M | (10.0)% | | Diluted EPS | $1.13 | $(0.30) | $0.83 | (8.8)% | Company Information and Forward-Looking Statements About Skechers U.S.A., Inc. Skechers U.S.A., Inc. is a global leader in footwear, apparel, and accessories, distributing products in approximately 180 countries through wholesale partners and a direct-to-consumer network - Skechers is a global footwear leader specializing in lifestyle and performance products for men, women, and children[7] - The company operates a global distribution network, selling products in approximately 180 countries through wholesale channels and approximately 5,300 Skechers-owned retail stores[7] Forward-Looking Statements This section provides a standard safe harbor warning that the report contains forward-looking statements subject to various risks and uncertainties, including supply chain disruptions and international instability - The report includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[8] - Key risks that could cause actual results to differ materially include: supply chain disruptions, international economic and political conditions (inflation, tariffs, conflicts), intense competition, and uncertainties related to a proposed merger[8]