Skechers delivers 17% top line growth
Skechers (SKX) reported a 17.3% YoY (year-over-year) rise in its 2Q17 top line to $1 billion, beating consensus expectations and its own guidance. Wall Street had expected $997 million in sales for the company in 2Q17.
“Second quarter net sales exceeded our expectations setting another record quarter, and making the first half of 2017 a new record with sales surpassing $2 billion,” said David Weinberg, chief operating officer and chief financial officer of Skechers.
Skechers’s top line growth outpaced the growths of most US-based sportswear companies. Sportswear giant Nike (NKE) posted a top line rise of 5.3% to $8.7 billion when it reported its quarterly results in late June 2017. The company did better than analysts had expected.
Rival Under Armour (UAA) also outdid its top line expectations during its latest quarterly results. The company’s total sales rose 7% to $1.1 billion.
What drove Skechers’s 2Q17 top line?
Skechers’s top line growth was driven by an improvement in all channels across all of its major geographies. The company’s domestic and international wholesale businesses grew 6.4% and 18.6%, respectively, while its global retail business grew 28% with sales comps growth of 7.1%.
The company’s management expects its sales to lie in the $1.05–$1.08 billion range in 3Q17. At the midpoint, this translates to a 12.5% rise in sales. The company’s management has predicted double-digit growths in both its international wholesale and global retail businesses. Its domestic wholesale sales are, however, expected to remain flat during the quarter.
ETF investors seeking exposure to SKX can consider the iShares Morningstar Small-Cap ETF (JKJ), which invests ~0.7% of its portfolio in the company.