Skechers U.S.A. (SKX -5.89%), a global leader in footwear, presented its fourth quarter 2024 earnings on February 6, 2025, showcasing a robust performance. Despite a minor shortfall in revenue against estimates, the company reported significant earnings growth. It achieved earnings per share of $0.65, missing the $0.75 analyst consensus. Revenues reached $2.212 billion, slightly under the $2.220 billion estimate as well, pointing towards an area that may require more focus. Overall, the quarter remained strong with a 12.8% year-over-year revenue increase, reflecting impressive growth dynamics.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| EPS (Diluted) | $0.65 | $0.75 | $0.56 | +16.1% |
| Revenue | $2.21B | $2.22B | $1.96B | +12.8% |
| Gross Margin | 53.3% | N/A | 53.1% | +20 bps |
| Net Income | $99.3M | N/A | $87.2M | +13.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-10-24 earnings report.
Overview of Skechers U.S.A.'s Business
Skechers U.S.A. is a major player in the global footwear industry, with a firm focus on three pillars: brand recognition, product innovation, and global distribution. Having a footprint in approximately 180 countries, it pursues strategic expansion through wholesale, direct-to-consumer, and e-commerce channels. A core aspect of its success lies in effective marketing campaigns featuring celebrities like Martha Stewart and the innovative product lines it promotes globally.
The company is paying considerable attention to product development, embracing advanced technologies to enhance comfort and style across both lifestyle and performance collections. Recent innovative launches include footwear with Hyper Burst Technology. The company's stringent sustainability practices further solidify its commitment to corporate responsibility, essential for maintaining a favorable brand image.
NYSE: SKX
Key Data Points
Highlights from Q4 2024
Skechers U.S.A. delivered fourth quarter that missed earnings expectations, reporting diluted EPS of $0.65. Although revenue of $2.21 billion missed estimates by 0.4%, it still marked an increase from $1.96 billion in the previous year. The company's gross margin improved slightly to 53.3%, reflecting strategic cost management.
Global sales dynamics featured well-balanced expansion, particularly strong in the Americas and EMEA regions with 14.2% and 24.8% growth, respectively. Challenges persisted in the Asia Pacific region, notably in China, where economic headwinds reduced growth to 3%. Despite this, Skechers U.S.A. leveraged product innovation to maintain its competitive edge.
There were no significant one-time adjustments or changes in dividend policies for this quarter. Material cost alignments and efficient supply chain operations contributed positively to this delivery. Gross margin advances of 20 basis points symbolize these successful efforts.
Inventory management posed a concern with levels rising due to disruptions like the Suez Canal blockage, prompting focus on reducing costs and aligning supply-demand balance. Successfully optimizing inventory remains critical in preventing excess rollback costs.
Looking Ahead
Looking to 2025, Skechers U.S.A. offers a positive guidance with a projection of $9.70 billion to $9.80 billion in sales and diluted EPS of $4.30-$4.50. Key investment in its distribution network and customer experience is expected to further enhance its growth trajectory. The company's financial targets aim at building on its advancements in expanding international markets and catering to growing customer needs.
Investors should monitor the company’s efforts in tackling challenges specific to the Chinese market and potential stabilization as part of a broader Asia Pacific strategy. The execution of its product innovation and market penetration endeavors, especially amidst fluctuating global economic conditions, will be significant indicators of future success.
