SKX
📈 Sketchers reported record quarterly sales ($2.4 billion), showing strong demand, particularly internationally (65% of sales), with EMEA growing 14%.
🇨🇳 Weakness in China dragged down APAC regional sales (-3%), although sales excluding China grew 12%, highlighting China as a significant challenge and area for investment.
📉 Despite record sales, margins contracted, operating income fell significantly (13% to 11% margin), EPS was flat, and the company withdrew its forward-looking guidance, causing the stock to drop post-market.
@bernardodegarcia:
“The stocks falling the most in this postmarket are Sketchers. It had quarterly results, in fact, now. Terrible suffering. Let’s take a look. Correct me if I’m wrong, but isn’t Sketchers a more affordable brand for the consumer than, say, a Nike? I don’t know, I’m not a retail expert. A three… this seems strange to me. Well, I suppose it’s due to lack of volume. Yes, no, no, it’s nothing… I mean, ah yes, Sketchers. Let’s look quickly. Sketchers Investors. Record sales, increase of 7.1%. Wholesale growth 7.8%, direct-to-consumer growth 6%. Oh, so is this the quarter we are reading? Yes, the first quarter of 2025. Okay. For the first quarter, we delivered record sales of $2.4 billion, reflecting very good demand, ta ta ta, with International representing 65%. I like it, well diversified. Sales by region increased 14% in EMEA, 8% in America. In APAC, they fell 3%. However, when we exclude China, they rose 12%. The huge problem is China. Eh, the CEO of Sketchers, at least the CEO of Sketchers in China, used to come to my restaurant a lot. We believe Sketchers has many growth opportunities in China and will continue investing in products, marketing, and infrastructure to expand our presence. In our core… for over 30 years… The information didn’t seem so bad to me. Let’s see. Sales grow by seven. Margins grow by six? No, margins contract by 50 basis points. Excuse me. Opex rises. Uy, you’re getting confused. Operating margins plummet from 13% to 11%, and earnings per share are quasi-flat. But well, here they would do juggling acts to get these figures. So you don’t have a table for me to say domestic, nothing, international? You don’t have Outlook? The company is not giving guidance at this time. And it’s taking out… this is the problem. The problem wasn’t the installed results for Sketchers. Inventory reduction, very good. Okay, well. We’ll see, we’ll see how it goes, honestly. Sketchers, I think, is one of the first companies talking to us about this consumer, right? Well, we also had Carnival Cruise and others. Sketchers withdraws guidance, falls 6%, and the shares are not expensive. It’s trading at 11. It’s trading much lower, but well.”
Watch the exact part of the video where @bernardodegarcia talks about Skechers U.S.A., Inc. here:
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