With an increase of up to 16%, it closed for Skechers this year’s third quarter compared to the previous year, setting another record in its 32-year run against sportswear giants, led by Nike and Adidas.
The results it announced a few days ago showed that net profits were $209.3 million, up 26% from $166 million in 2023. How is Skechers changing the game?
At the same time, direct-to-consumer (DTC) sales rose 9.6% to $931.7 million, led by a 28% increase in the arm operating in Europe, the Middle East and Africa. Total wholesale sales rose 21% to $1.4 billion for the quarter ended Sept. 30, with the Americas region posting nearly 22% growth in that segment.
For the nine months, American Skechers achieved sales of nearly $6.8 billion, an increase of 12% over a year ago. The latest results support the company’s confidence in its previously stated goal of $10 billion in sales by 2026.
The third player
It’s no coincidence that in fiscal year 2022, Nike alone sold $29 billion worth of shoes, emerging as a leading force in the industry, managing to seamlessly blend innovation and nostalgia.
Additionally, with $13.1 billion in projected sales in 2022, Adidas holds the second largest market share. Skechers came in third with $7.4 billion, while Puma, Asics and Converse secured their spots on the best-selling list with revenues of $4.5 billion, $3 billion and $2.1 billion respectively.
Skechers founder and CEO Robert Greenberg—also the creator of LA Gear—credited the company’s current success in part to its partnerships with brand ambassadors and professional athletes. The company’s roster of partners includes Snoop Dogg and Philadelphia 76ers basketball player Joel Embiid, who wore Skechers during the Paris Olympics this summer. Skechers also recently signed TV host Howie Mandel.
Greenberg also credited the company’s third-quarter growth and performance to a good value proposition and a strong, consistent omnichannel presence through DTC and through a network of key retailers.
The value of DTC, unlike Nike
Domestic DTC sales improved 3.7% from last year’s 14% increase, driven primarily by strong e-commerce growth as more consumers chose to shop online.
As more and more consumers consider comfort features essential, the importance of innovating and evolving our designs with the company’s signature technologies in core and new product offerings remains vital.
The company increases consumer awareness of its products with technology-focused marketing campaigns and through partnerships with brand ambassadors and professional athletes.
Investments in sports partnerships
Skechers is still in the early stages of moving deeper into team sports through the continued introduction of track, soccer, basketball and cleat offerings, as well as growing the roster of athletes competing in Skechers shoes. In August, the company also introduced a footwear collection in collaboration with John Deere, the agricultural and construction equipment manufacturer.
The prospects of Skechers
For the 4th quarter, the company’s forecast is for sales to range between $2.17 billion and $2.22 billion. For the full year, Skechers expects to achieve sales ranging from about $8.93 billion to $8.98 billion, slightly higher than the previous forecast of $8.88 billion to $8.98 billion.
This guidance could be conservative given the company’s overall performance. Skechers’ wholesale channel is expected to post positive mid-to-high tens year-over-year growth in Q4, while DTC’s performance is expected to be similar to Q3.
Additionally, while Skechers’ average selling prices could support sales and gross margin in each channel, DTC appears to be mitigating, especially internationally, from an omnichannel same-store sales perspective, given strong door growth during the previous 24 months for both domestic and international direct-to-consumer sales.
