Skechers’ Q1 Sales Growth: The Likely Drivers



Will the strong growth rate continue?

Skechers’ (SKX) sales grew by double digits in three of the four quarters of 2018. The company’s sales grew 11.4% to $1.08 billion in the fourth quarter against analysts’ forecast of $1.10 billion. Skechers’ top-line growth was driven by a 17.9% rise in international sales and a 4.1% increase in domestic sales. Currency headwinds hurt the company’s fourth-quarter sales growth by 230 basis points.

Skechers’ sales grew 11.5% to $4.64 billion in full-year 2018, driven by a 19.2% rise in the company’s international business and 3.5% growth in domestic sales. Skechers’s international wholesale business generated 18.8% sales growth in 2018, outperforming the 0.8% increase in the domestic wholesale business.

Skechers’s retail segment sales increased 12%, driven by a 7.7% rise in domestic retail sales and international retail store sales growth of 21.2%.

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Sales expectations

Skechers expects its sales in the range of $1.275 billion to $1.300 billion in the first quarter this year, compared to $1.25 billion in the first quarter of 2018. Skechers expects its top line in the first quarter to take a hit from currency headwinds and the shift in some sales from the first quarter to the second quarter due to the timing of Easter. Analysts expect Skechers’ sales to fall 3.8% to about $1.30 billion in the first quarter.

Larger rival Nike (NKE) reported its results for the third quarter of fiscal 2019 (which ended on February 28) in March. Nike’s revenue grew 7.0% to $9.61 billion in the third quarter of fiscal 2019, driven by strong growth in the footwear and apparel categories.

For full-year 2019, analysts expect Skechers’ sales to rise 7.8% to $5.0 billion. Strong international sales and an expanded retail store base are expected to drive sales growth in 2019.


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