Skechers Q4 Earnings Miss Expectations, Sales Increase Y/Y

Core Insights - Skechers U.S.A., Inc. reported fourth-quarter 2024 results with sales exceeding estimates but earnings per share (EPS) falling short, although both metrics showed year-over-year growth [1][4]. Financial Performance - The company achieved sales of $2.212 billion, slightly above the consensus estimate of $2.211 billion, reflecting a 12.8% year-over-year increase driven by 18% growth in domestic sales and 9.8% in international sales [5][6]. - EPS was reported at 65 cents, missing the Zacks Consensus Estimate of 74 cents, but representing a 16.1% increase from the previous year [4]. - On a constant currency basis, EPS was 86 cents, marking a 53.6% increase year-over-year [4]. Sales Breakdown - Wholesale sales increased 17.5% year-over-year to $1.13 billion, while Direct-to-Consumer (DTC) sales rose 8.4% to $1.08 billion [6]. - Region-wise, sales grew 14.2% in the Americas to $1.09 billion, 24.8% in EMEA to $478.6 million, and 3.3% in APAC to $642.4 million [8]. Cost and Margin Analysis - Gross profit increased 13.1% year-over-year to $1.18 billion, with a gross margin of 53.3%, up 20 basis points [9]. - Total operating expenses rose 11.2% to $1.01 billion, but as a percentage of sales, it decreased by 70 basis points to 45.8% [9][10]. Capital Expenditure and Financial Health - As of December 31, 2024, cash and cash equivalents totaled $1.12 billion, with long-term borrowings at $68.5 million and shareholders' equity at $4.28 billion [11][12]. - The company plans capital expenditures of $600-$700 million for 2025, primarily for expanding distribution centers [12]. Share Repurchase and Store Update - In Q4 2024, Skechers repurchased 1.9 million shares for $120 million, with $789.9 million remaining under the share repurchase program [13]. - As of December 31, 2024, Skechers operated 5,296 stores globally, with a net increase of 62 domestic and 206 international stores during the quarter [14]. Future Outlook - For 2025, management targets sales between $9.70 billion and $9.80 billion, with EPS expected between $4.30 and $4.50 [15]. - For Q1 2025, sales are projected to be between $2.40 billion and $2.43 billion, with EPS between $1.10 and $1.15 [15].