Dive Brief:
- Skechers reported $8 billion in sales for its 2023 fiscal year, a 7.5% year-over-year increase and a record in annual sales for the footwear giant, according to a Thursday press release.
- International sales saw the largest increase at 13.3%, while domestic sales decreased 0.8%.
- Though the company logged fourth quarter DTC growth of 20.3%, wholesale remained a challenge, with Skechers reporting $86.6 million for the segment, a 8.3% decrease from the year prior.
Dive Insight:
While Skechers set multiple sales records during 2023, wholesale pressure continued throughout the fiscal year.
In Q3, Skechers “eked out a marginal gain” for its wholesale business with a 0.3% increase, said Tom Nikic of Wedbush Securities, but he called the footwear giant’s Q4 decline a “surprising reversal” from the previous quarter’s results.
Domestic wholesale decreased 10.4% for the quarter, and international wholesale declined 7.1%, COO David Weinberg said on an earnings call with investors. The international decline was primarily due to the EMEA region, and it was partially offset by improvements in the APAC region, “including double-digit improvements in China which had a healthy return to growth over the key fourth quarter holidays,” per Weinberg.
Weinberg attributed wholesale decreases to “some retailers conservatively managing inventory levels and taking goods closer to season.”
“In all, 2023 was a challenging year for wholesale, particularly in the United States,” Weinberg said. “But our key indicators give us optimism that our wholesale business will return to growth in the first half of 2024.”
On the call, CFO John Vandemore said the company was optimistic about what it was seeing in the wholesale space so far in 2024, in terms of shipments through the first month of the quarter and bookings in the first half.
Meanwhile, DTC revenue in Q4 grew double-digits across all regions. The EMEA region grew the most at 53.1%, followed by APAC at 21.2% and the Americas region grew 14.6%. The company expects to grow this business line more in 2024.
“Direct-to-consumer, we also continue to expect to do well,” Vandemore said. “Maybe not as well as it's done this year because it's a pretty heady rate at 24% on the full year, but we still expect double-digit opportunities to reveal themselves, certainly to the first bit of the year. So we continue to see good trajectory, good recovery. I think, if anything, where we sit today, we think there's probably a lot more opportunity than risk in that, but it's also early. So we're going to watch things unfold.”
For 2024, the company set its sales outlook to between $8.6 billion and $8.8 billion. For the first quarter, it expects between $2.18 billion and $2.23 billion in sales.
