Skechers Announces Record Annual Sales of $8.00 Billion for 2023

Rhea-AI Summary

Skechers U.S.A., Inc. announced record annual sales of $8.00 billion, a year-over-year increase of 7.5%, with diluted earnings per share of $3.49, a year-over-year increase of 46.6%. The company also achieved a record gross margin of 53.1% in the fourth quarter. Direct-to-Consumer sales grew by 24.3% annually and 20.3% in Q4, while Wholesale sales decreased by 8%. Skechers' full-year sales record was attributed to strong global demand, growing consumer base, and strategic partnerships. The company's successful financial results in 2023 reflect a positive outlook for continued growth and expansion in 2024.

Positive

• Record annual sales of $8.00 billion, a 7.5% increase year-over-year
• Diluted earnings per share of $3.49, a 46.6% increase year-over-year
• Record gross margin of 53.1% in Q4
• Direct-to-Consumer sales grew by 24.3% annually and 20.3% in Q4
• Optimistic outlook for continued growth and expansion in 2024

Negative

• None.

Insights

Financial Analyst

The reported increase in annual sales to $8.00 billion, representing a 7.5% year-over-year growth, indicates a positive market response to Skechers' product offerings, particularly in the Direct-to-Consumer segment which saw a significant 24.3% growth. This shift towards direct sales channels is a trend across retail sectors, reflecting changing consumer behaviors and a strategic move by companies to improve profit margins by bypassing intermediaries.

Moreover, the diluted earnings per share (EPS) increase of 46.6% is a robust indicator of profitability and may be attributed to the company's operational efficiency and successful marketing strategies, such as partnerships with high-profile celebrities and the introduction of new product lines. The reduction in inventory levels by 16.1% from the previous year also suggests effective inventory management, which is critical in the retail industry to avoid overstocking and potential markdowns.

It is important to note the 8% decline in Wholesale business, which could signal a strategic pivot or reflect broader industry challenges such as retail consolidation and evolving purchasing patterns. However, the optimism for the first half of the new year, based on early January shipments and order trends, may indicate a recovery or adaptation phase for the Wholesale segment.

Market Research Analyst

Regionally, the varying performance with Asia Pacific experiencing a 15% growth, Americas growing by 3% and Europe, Middle East and Africa seeing a 7% decline, highlights the uneven economic recovery post-pandemic and the diverse consumer confidence across different markets. The double-digit growth in China is particularly noteworthy, given the size and competitive nature of the market, suggesting that Skechers' brand and product positioning are resonating well with Chinese consumers.

The company's expansion of distribution facilities in India, Canada and Latin America represents a strategic investment in logistics to support the growing Direct-to-Consumer and Wholesale segments. The emphasis on comfort technology products aligns with consumer trends favoring functional and comfortable footwear, potentially contributing to the brand's sustained growth.

The introduction of new product lines and celebrity endorsements, such as the partnerships with Martha Stewart and Snoop Dogg and the signing of prominent athletes for Skechers Performance and Basketball, are likely to enhance brand visibility and appeal across diverse consumer demographics. This marketing approach may contribute to the brand's global reach and future sales growth, as indicated by the CEO's confidence for the year 2024.

Economist

The reported growth in sales and EPS amidst a global economic environment that has been characterized by supply chain disruptions and inflationary pressures is indicative of Skechers' strong market positioning and the resilience of the consumer discretionary sector. The company's ability to grow its Direct-to-Consumer sales while managing wholesale declines reflects an adaptability to changing market conditions.

The strategic reduction in inventory levels suggests a proactive approach to cost management and an anticipation of potential shifts in consumer demand. This is particularly relevant in the context of an economy where inventory glut has been a concern for many retailers.

The reported gross margin improvement to 53.1%, driven by higher average selling prices and lower costs per unit, is a testament to the company's pricing power and operational efficiency. The increased operating expenses, particularly in selling and general administrative expenses, reflect ongoing investments in brand development and expansion efforts, which are essential for long-term growth but may impact short-term profitability.

LOS ANGELES--(BUSINESS WIRE)-- Skechers U.S.A., Inc. (“Skechers” or the “Company”) (NYSE:SKX), The Comfort Technology Company™ and a global footwear leader, today announced financial results for the fourth quarter and full year ended December 31, 2023.

2023 Highlights

• Record annual sales of $8.00 billion, a year-over-year increase of 7.5%
• Direct-to-Consumer sales grew 24.3%
• Diluted earnings per share of $3.49, a year-over-year increase of 46.6%
• Inventory decrease of $292.6 million or 16.1% from December 31, 2022

Fourth Quarter Highlights

• Record fourth quarter sales of $1.96 billion, a year-over-year increase of 4.4%
• Direct-to-Consumer sales grew 20.3%
• Diluted earnings per share of $0.56, a year-over-year increase of 16.7%
• Repurchased $60 million of Class A common stock

“Skechers achieved a new fourth quarter sales record of $1.96 billion, and a record gross margin of 53.1%. This success reflects the strong worldwide demand for our comfort technology products, especially in our Direct-to-Consumer business which grew 20%. Our Wholesale business experienced a decrease in sales of 8%, as several retailers continued to conservatively manage their inventory levels. However, we are optimistic that this behavior is changing based upon early reads from January shipments and positive order trends for the first half of the year,” stated David Weinberg, Chief Operating Officer of Skechers. “Regionally in the quarter, Asia Pacific grew 15%, led by double-digit growth in China, the Americas grew 3%, and Europe, Middle East and Africa decreased 7%. For the full-year, we achieved a new annual sales record of $8.00 billion, reduced inventory levels by 16%, and continued to invest in our distribution facilities, including new locations in India, Canada and Latin America. We begin 2024 confident in the strength of our brand and continued growth in both our Direct-to-Consumer and Wholesale segments globally.”

“Skechers’ new annual sales record of $8.00 billion was the result of the broad acceptance for our products worldwide, our loyal and growing consumer base, the cultivated relationships with our partner network, and our determined and dedicated team,” began Robert Greenberg, Chief Executive Officer of Skechers. “As always, product and marketing are paramount to our success, with comfort, quality, style and innovation inspiring every collection. Throughout the year, we delivered fresh styles of our proven Skechers Hands Free Slip-ins, understanding that consumers of all ages appreciate the comfort and convenience of this technology. We also introduced partnerships and a capsule collection with Martha Stewart and Snoop Dogg, who appeared in a joint Super Bowl campaign. Skechers Performance signed Europe’s top goal scorer for 2023, Harry Kane, as well as other premier players for the launch of Skechers Football. We further expanded our product offering and elite-level roster with NBA players Julius Randle and Terance Mann, both competing in Skechers Basketball. With over 5,000 Skechers retail stores and becoming a Fortune 500 company, our brand's global reach continues to expand. Our product initiatives and diverse line-up of athletes and ambassadors offers numerous opportunities to tell the Skechers story, and further grow our business globally. Given our momentum, we are confident that 2024 will be another successful year for the Company.”

Fourth Quarter 2023 Financial Results

		Three Months Ended December 31,								Change
(in millions, except per share data)		2023				2022				$				%
Sales		$	1,960.9			$	1,878.8				82.1				4.4
Gross profit			1,041.4				909.7				131.7				14.5
Gross margin			53.1	%			48.4	%						470 bps
Operating expenses			911.1				823.0				88.1				10.7
As a % of sales			46.5	%			43.8	%						270 bps
Earnings from operations			130.3				86.6				43.7				50.4
Operating margin			6.6	%			4.6	%						200 bps
Net earnings attributable to Skechers U.S.A., Inc.			87.2				75.5				11.7				15.4
Diluted earnings per share		$	0.56			$	0.48				0.08				16.7

Fourth quarter sales increased 4.4% as a result of a 6.9% increase internationally and a 0.3% increase domestically. Direct-to-Consumer increased 20.3% and Wholesale decreased 8.3%. On a constant currency basis, sales increased 2.8%.

Wholesale sales declined $86.6 million, or 8.3%, including decreases in EMEA of 19.5% and AMER of 7.4%, partially offset by an increase in APAC of 7.1%. Wholesale volume decreased 9.5% and average selling price increased 1.2%.

Direct-to-Consumer sales grew $168.7 million, or 20.3%, including increases in APAC of 21.2%, AMER of 14.6%, and EMEA of 53.1%. Direct-to-Consumer volume increased 11.8% and average selling price increased 7.7%.

Gross margin was 53.1%, an increase of 470 basis points, primarily due to higher average selling prices, a higher proportion of Direct-to-Consumer sales, and lower costs per unit, driven by lower freight costs.

Operating expenses increased $88.1 million, or 10.7%, and as a percentage of sales increased 270 basis points to 46.5%. Selling expenses increased $25.0 million, or 15.8%, and as a percentage of sales increased 90 basis points to 9.3%. The increase was due to higher brand demand creation expenditures. General and administrative expenses increased $63.1 million, or 9.5%, and as a percentage of sales increased 170 basis points to 37.1%. Increased expenses were primarily driven by increased facility costs, including rent and depreciation, and labor. These were partially offset by decreases in volume-driven labor and warehouse and distribution expenses from the supply chain and logistical challenges in the prior year.

Earnings from operations increased $43.7 million, or 50.4%, to $130.3 million, resulting in an operating margin of 6.6%.

Net earnings were $87.2 million and diluted earnings per share were $0.56 compared with prior year net earnings of $75.5 million and diluted earnings per share of $0.48.

In the fourth quarter, the Company’s effective income tax rate was 20.3%.

“Skechers' record sales and earnings demonstrate the strong global position of our brand, compelling product assortment, and worldwide execution capabilities,” said John Vandemore, Chief Financial Officer of Skechers. “2023 was a dynamic year full of challenges, which the Skechers team faced with outstanding determination and agility. We are optimistic about 2024, where we will continue to execute against our long-term growth strategy of expanding internationally and deepening our Direct-to-Consumer relationships, and we remain confident in our sales goal of $10 billion by 2026.”

Full Year 2023 Financial Results

		Year Ended December 31,								Change
(in millions, except per share data)		2023				2022				$				%
Sales		$	8,000.3			$	7,444.5				555.8				7.5
Gross profit			4,152.4				3,515.4				637.0				18.1
Gross margin			51.9	%			47.2	%						470 bps
Operating expenses			3,367.6				2,968.7				398.9				13.4
As a % of sales			42.1	%			39.9	%						220 bps
Earnings from operations			784.8				546.7				238.1				43.6
Operating margin			9.8	%			7.3	%						250 bps
Net earnings attributable to Skechers U.S.A., Inc.			545.8				373.0				172.8				46.3
Diluted earnings per share		$	3.49			$	2.38				1.11				46.6

Full year sales increased 7.5%, reflecting a 13.3% increase internationally and a 0.8% decrease domestically. Direct-to-Consumer increased 24.3% and Wholesale decreased 2.8%. On a constant currency basis, sales increased 7.9%.

Wholesale sales decreased $127.6 million, or 2.8%, due to a decrease in AMER of 10.6%, partially offset by increases in APAC of 12.6% and EMEA of 0.1%. Wholesale volume decreased 8.7% and average selling price increased 6.3%.

Direct-to-Consumer sales grew $683.4 million, or 24.3%, due to increases in AMER of 21.5%, APAC of 22.0%, and EMEA of 49.2%. Direct-to-Consumer volume increased 19.6% and average selling price increased 4.0%.

Gross margin was 51.9%, an increase of 470 basis points, primarily driven by higher average selling prices and a higher proportion of Direct-to-Consumer sales.

Operating expenses increased $398.9 million or 13.4%. As a percentage of sales, operating expenses increased 220 basis points to 42.1%. Selling expenses increased $93.3 million or 16.0%, primarily due to higher global demand creation expenditures. General and administrative expenses increased $305.7 million or 12.8%, primarily driven by labor, and facility costs, including rent and depreciation. These were partially offset by decreases in volume-driven labor and warehouse and distribution expenses from the supply chain and logistical challenges in the prior year.

Earnings from operations increased $238.1 million to $784.8 million, resulting in an operating margin of 9.8%.

Net earnings were $545.8 million and diluted earnings per share were $3.49, an increase of 46.6% over the prior year.

The Company’s effective income tax rate was 18.8%.

Balance Sheet

Cash, cash equivalents and investments totaled $1.39 billion, an increase of $598.1 million, or 75.9% from December 31, 2022, due to increased earnings and favorable changes in working capital, primarily inventory. Increases were partially offset by capital expenditures of $323.7 million, $160.1 million of share repurchases, and payments of $70.4 million, net of cash acquired, related to the acquisition of our Scandinavian distributor.

Inventory was $1.53 billion, a decrease of $292.6 million or 16.1% from December 31, 2022.

Share Repurchase

During the fourth quarter, the Company repurchased 1.1 million shares of its Class A common stock at a cost of $60.0 million. In 2023, the Company repurchased 3.2 million shares of its Class A common stock at a cost of $160.1 million. As of December 31, 2023, approximately $265.7 million remained available under the Company’s share repurchase program.

Outlook

For the fiscal year 2024, the Company believes it will achieve sales between $8.60 and $8.80 billion and diluted earnings per share of between $3.65 and $3.85. The Company believes that for the first quarter of 2024, it will achieve sales between $2.175 and $2.225 billion and diluted earnings per share of between $1.05 and $1.10. Further, the Company believes that total capital expenditures will be between $350 and $400 million in 2024, inclusive of construction of the Company's second distribution center in China.

Store Count

		Number of Stores
		December 31, 2022				Opened(1)				Closed(1)				December 31, 2023
Domestic stores			539				35				(11	)			563
International stores			905				268				(88	)			1,085
Distributor, licensee and franchise stores			3,093				841				(414	)			3,520
Total Skechers stores			4,537				1,144				(513	)			5,168

(1)

Includes the conversion of 58 third-party stores to International stores previously included in Distributor stores as a result of the acquisition of our Scandinavian distributor.

Fourth Quarter 2023 Conference Call

The Company will host a conference call today, February 1, at 4:30 p.m. ET / 1:30 p.m. PT to discuss its fourth quarter 2023 financial results. The call can be accessed on the Investor Relations section of the Company’s website at investors.skechers.com. For those unable to participate during the live broadcast, a replay will be available beginning February 1, 2024, at 7:30 p.m. ET, through February 15, 2024, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13743148.

About Skechers U.S.A., Inc.

Skechers U.S.A., Inc., a Fortune 500^® company based in Southern California, designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. Collections from The Comfort Technology Company™ are available in approximately 180 countries and territories through department and specialty stores, and direct to consumers through digital stores, and approximately 5,170 Company- and third-party-owned physical retail stores. The Company manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. For more information, please visit about.skechers.com and follow us on Facebook, Instagram and TikTok.

Reference in this press release to “Sales” refers to Skechers’ net sales reported under GAAP. This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation, Skechers’ future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the disruption of business and operations due to the COVID-19 pandemic; delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of wars, acts of war and other conflicts around the world; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in Skechers’ annual report on Form 10-K for the year ended December 31, 2022 and its quarterly reports on Form 10-Q in 2023. Taking these and other risk factors associated with the COVID-19 pandemic into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS U.S.A., INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
		As of				As of
(in thousands)		December 31, 2023				December 31, 2022
ASSETS
Current assets
Cash and cash equivalents		$	1,189,910			$	615,733
Short-term investments			72,595				102,166
Trade accounts receivable, net			860,300				848,287
Other receivables			82,253				86,036
Inventory			1,525,409				1,818,016
Prepaid expenses and other			222,137				176,035
Total current assets			3,952,604				3,646,273
Property, plant and equipment, net			1,506,690				1,345,370
Operating lease right-of-use assets			1,276,171				1,200,565
Deferred tax assets			450,574				454,190
Long-term investments			123,996				70,498
Goodwill			101,230				93,497
Other assets, net			136,086				83,094
Total non-current assets			3,594,747				3,247,214
TOTAL ASSETS		$	7,547,351			$	6,893,487
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	1,008,001			$	957,384
Accrued expenses			320,105				294,143
Operating lease liabilities			274,296				238,694
Current installments of long-term borrowings			46,571				103,184
Short-term borrowings			11,894				19,635
Total current liabilities			1,660,867				1,613,040
Long-term operating lease liabilities			1,108,110				1,063,672
Long-term borrowings			242,944				216,488
Deferred tax liabilities			12,594				8,656
Other long-term liabilities			122,794				120,045
Total non-current liabilities			1,486,442				1,408,861
Total liabilities			3,147,309				3,021,901
Stockholders’ equity
Preferred Stock			—			—
Class A Common Stock			133				134
Class B Common Stock			20				21
Additional paid-in capital			295,847				403,799
Accumulated other comprehensive loss			(73,388	)			(84,897	)
Retained earnings			3,796,730				3,250,931
Skechers U.S.A., Inc. equity			4,019,342				3,569,988
Noncontrolling interests			380,700				301,598
Total stockholders' equity			4,400,042				3,871,586
TOTAL LIABILITIES AND EQUITY		$	7,547,351			$	6,893,487

SKECHERS U.S.A., INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
	Three Months Ended December 31,									Year Ended December 31,
(in thousands, except per share data)		2023				2022				2023				2022
Sales		$	1,960,940			$	1,878,785			$	8,000,342			$	7,444,550
Cost of sales			919,557				969,105				3,847,938				3,929,193
Gross profit			1,041,383				909,680				4,152,404				3,515,357
Operating expenses
Selling			182,926				157,951				676,890				583,626
General and administrative			728,164				665,092				2,690,728				2,385,061
Total operating expenses			911,090				823,043				3,367,618				2,968,687
Earnings from operations			130,293				86,637				784,786				546,670
Other income (expense)			10,426				15,731				16,086				(24,413	)
Earnings before income taxes			140,719				102,368				800,872				522,257
Income tax expense			28,589				9,866				150,949				93,095
Net earnings			112,130				92,502				649,923				429,162
Less: Net earnings attributable to noncontrolling interests			24,948				16,987				104,124				56,134
Net earnings attributable to Skechers U.S.A., Inc.		$	87,182			$	75,515			$	545,799			$	373,028
Net earnings per share attributable to Skechers U.S.A., Inc.
Basic		$	0.57			$	0.49			$	3.53			$	2.40
Diluted		$	0.56			$	0.48			$	3.49			$	2.38
Weighted-average shares used in calculating net earnings per share attributable to Skechers U.S.A., Inc.
Basic			153,516				155,162				154,533				155,627
Diluted			155,571				156,278				156,256				156,608

SKECHERS U.S.A., INC. AND SUBSIDIARIES
Supplemental Financial Information
(Unaudited)
Segment Information
	Three Months Ended December 31,									Change
(in millions)		2023				2022				$				%
Wholesale sales		$	962.6			$	1,049.2				(86.6	)			(8.3	)
Gross profit			393.2				375.2				18.0				4.8
Gross margin			40.9	%			35.8	%						510 bps
Direct-to-Consumer sales		$	998.3			$	829.6				168.7				20.3
Gross profit			648.2				534.4				113.8				21.3
Gross margin			64.9	%			64.4	%						50 bps
Total sales		$	1,960.9			$	1,878.8				82.1				4.4
Gross profit			1,041.4				909.7				131.7				14.5
Gross margin			53.1	%			48.4	%						470 bps
	Year Ended December 31,									Change
(in millions)		2023				2022				$				%
Wholesale sales		$	4,504.8			$	4,632.4				(127.6	)			(2.8	)
Gross profit			1,846.8				1,669.3				177.5				10.6
Gross margin			41.0	%			36.0	%						500 bps
Direct-to-Consumer sales		$	3,495.5			$	2,812.1				683.4				24.3
Gross profit			2,305.6				1,846.1				459.5				24.9
Gross margin			66.0	%			65.6	%						30 bps
Total sales		$	8,000.3			$	7,444.5				555.8				7.5
Gross profit			4,152.4				3,515.4				637.0				18.1
Gross margin			51.9	%			47.2	%						470 bps

Additional Sales Information
	Three Months Ended December 31,									Change
(in millions)		2023				2022				$				%
Geographic sales
Domestic
Wholesale		$	327.5			$	365.4				(37.9	)			(10.4	)
Direct-to-Consumer			385.4				345.4				40.0				11.6
Total domestic sales			712.9				710.8				2.1				0.3
International
Wholesale			635.1				683.8				(48.7	)			(7.1	)
Direct-to-Consumer			612.9				484.2				128.7				26.6
Total international sales			1,248.0				1,168.0				80.0				6.9
Total sales		$	1,960.9			$	1,878.8				82.1				4.4
Regional sales
Americas (AMER)		$	955.4			$	925.6				29.8				3.2
Europe, Middle East & Africa (EMEA)			383.5				413.7				(30.2	)			(7.3	)
Asia Pacific (APAC)			622.0				539.5				82.5				15.3
Total sales		$	1,960.9			$	1,878.8				82.1				4.4
China sales		$	376.7			$	308.0				68.7				22.3
Distributor sales		$	139.6			$	160.7				(21.1	)			(13.1	)
	Year Ended December 31,									Change
(in millions)		2023				2022				$				%
Geographic sales
Domestic
Wholesale		$	1,567.8			$	1,831.6				(263.8	)			(14.4	)
Direct-to-Consumer			1,482.4				1,243.5				238.9				19.2
Total domestic sales			3,050.2				3,075.1				(24.9	)			(0.8	)
International
Wholesale			2,937.0				2,800.8				136.2				4.9
Direct-to-Consumer			2,013.1				1,568.6				444.5				28.3
Total international sales			4,950.1				4,369.4				580.7				13.3
Total sales		$	8,000.3			$	7,444.5				555.8				7.5
Regional sales
Americas (AMER)		$	3,945.7			$	3,854.4				91.3				2.4
Europe, Middle East & Africa (EMEA)			1,831.8				1,699.2				132.6				7.8
Asia Pacific (APAC)			2,222.8				1,890.9				331.9				17.5
Total sales		$	8,000.3			$	7,444.5				555.8				7.5
China sales		$	1,228.6			$	1,062.7				165.9				15.6
Distributor sales		$	463.9			$	557.1				(93.2	)			(16.7	)

SKECHERS U.S.A., INC. AND SUBSIDIARIES
Reconciliation of GAAP Earnings Financial Measures to Corresponding Non-GAAP Financial Measures
(Unaudited)
Constant Currency Adjustment (Non-GAAP Financial Measure)
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current period local currency financial results using the prior-period exchange rates and comparing these adjusted amounts to our prior period reported results.
		Three Months Ended December 31,
		2023												2022				Change
(in millions, except per share data)		Reported GAAP Measure				Constant Currency Adjustment				Adjusted for Non-GAAP Measures				Reported GAAP Measure				$				%
Sales		$	1,960.9			$	(29.6	)		$	1,931.3			$	1,878.8				52.5				2.8
Cost of sales			919.5				(12.1	)			907.4				969.1				(61.7	)			(6.4	)
Gross profit			1,041.4				(17.5	)			1,023.9				909.7				114.2				12.6
Operating expenses			911.1				(10.1	)			901.0				823.0				78.0				9.5
Earnings from operations			130.3				(7.4	)			122.9				86.6				36.3				41.8
Other income (expense)			10.4				(6.9	)			3.5				15.8				(12.3	)			(77.8	)
Income tax expense (benefit)			28.6				(1.9	)			26.7				9.9				16.8				171.0
Less: Noncontrolling interests			24.9				(0.2	)			24.7				17.0				7.7				45.7
Net earnings attributable to Skechers U.S.A., Inc.		$	87.2			$	(12.2	)		$	75.0			$	75.5				(0.5	)			(0.6	)
Diluted earnings per share		$	0.56			$	(0.08	)		$	0.48			$	0.48				-				-
		Year Ended December 31,
		2023												2022				Change
(in millions, except per share data)		Reported GAAP Measure				Constant Currency Adjustment				Adjusted for Non-GAAP Measures				Reported GAAP Measure				$				%
Sales		$	8,000.3			$	32.6			$	8,032.9			$	7,444.5				588.4				7.9
Cost of sales			3,847.9				16.1				3,864.0				3,929.1				(65.1	)			(1.7	)
Gross profit			4,152.4				16.5				4,168.9				3,515.4				653.5				18.6
Operating expenses			3,367.6				13.5				3,381.1				2,968.7				412.4				13.9
Earnings from operations			784.8				3.0				787.8				546.7				241.1				44.1
Other income (expense)			16.0				(15.6	)			0.4				(24.5	)			24.9			n/m
Income tax expense			150.9				0.6				151.5				93.1				58.4				62.7
Less: Noncontrolling interests			104.1				2.3				106.4				56.1				50.3				89.5
Net earnings attributable to Skechers U.S.A., Inc.		$	545.8			$	(15.5	)		$	530.3			$	373.0				157.3				42.2
Diluted earnings per share		$	3.49			$	(0.10	)		$	3.39			$	2.38				1.01				42.4

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240201843765/en/

Investor Relations

Sonia Reback

Eunice Han

investors@skechers.com

Press

Jennifer Clay

jennc@skechers.com

Source: Skechers U.S.A., Inc.

FAQ

What were Skechers' annual sales in 2023?

Skechers' annual sales in 2023 were $8.00 billion, marking a 7.5% increase year-over-year.

What was the year-over-year increase in diluted earnings per share?

The year-over-year increase in diluted earnings per share was 46.6%.

By how much did Direct-to-Consumer sales grow in the fourth quarter?

Direct-to-Consumer sales grew by 20.3% in the fourth quarter.

What was the change in Wholesale sales in the fourth quarter?

Wholesale sales decreased by 8.3% in the fourth quarter.

What was the operating margin in the fourth quarter?

The operating margin in the fourth quarter was 6.6%.