Skechers USA (SKX) has impressed investors with its strong third-quarter performance, leading to an 11% surge in the company’s stock price.
After posting record-breaking revenue and adjusted earnings that beat Wall Street expectations, Skechers has also raised its full-year guidance, a move signaling that the global demand for its products remains robust despite economic challenges.
Skechers is becoming a leader in the footwear market, attracting a lot of attention from investors with this positive outlook.
For Q3 2024, Skechers reported adjusted earnings per share of $1.20, exceeding analyst estimates of $1.16. Additionally, the company posted a revenue increase of 15.9% year-over-year to a record $2.35 billion, surpassing the expected $2.31 billion.
This strong revenue growth was driven by a 20.6% jump in wholesale sales and a 9.6% rise in direct-to-consumer sales.
Importantly, the company also raised its full-year 2024 earnings guidance to between $4.20 and $4.25 per share, well above the $4.17 per share anticipated by analysts polled by FactSet.
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Skechers Powers Through Global Disruptions, Hits $2.35B in Quarterly Sales
The company’s strong performance goes beyond short-term success, reflecting broader trends in the footwear industry.
Skechers is gaining from a growing consumer preference for comfortable and durable shoes, especially as people now prioritize practicality after the pandemic.
Skechers’ ability to navigate global supply chain disruptions also highlights its resilience, particularly in challenging international markets.
The company’s balanced growth across wholesale, direct-to-consumer, and international segments, such as a 30% sales increase in the EMEA region, underscores its diversified strategy. The raised guidance is a clear sign of management’s confidence in Skechers’ growth potential.
David Weinberg, Skechers’ Chief Operating Officer, attributed the company’s new quarterly sales record of $2.35 billion to strong consumer demand across all distribution channels.
“Strong consumer demand for Skechers across all distribution channels resulted in a new quarterly sales record of $2.35 billion,”
David Weinberg, Skechers’ Chief Operating Officer
He mentioned that even though some countries faced tough market conditions, Skechers still saw strong growth, with a 21% increase in wholesale, 10% growth in direct-to-consumer sales, and gains of 16% internationally and 15% in the U.S.
“Despite challenging market conditions in certain countries, we achieved 21% wholesale growth, 10% direct-to-consumer growth, and robust sales gains of 16% internationally and 15% domestically.”
Despite challenges in some markets, Skechers’ global appeal grows, key as the company reinvests in direct-to-consumer and share buybacks.
Skechers Sees Long-Term Gains, Projects $2.215B Revenue for Q4 Despite Economic Uncertainty
Skechers projects Q4 2024 revenue between $2.165 billion and $2.215 billion, with earnings per share estimated at $0.70 to $0.75.
Although projections are below Wall Street’s estimates of $0.76 per share on $2.22 billion revenue, the company’s growth remains positive. However, potential risks, including market volatility and macroeconomic factors, could influence future performance.
Additionally, the company delivered strong Q3 results and raised its full-year outlook, strengthening its position in the global footwear market.
Skechers is well-positioned for future opportunities with ongoing growth in wholesale and direct-to-consumer channels, and international expansion.
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