Skechers U.S.A ( NYSE: SKX ) fell 9.55% after-hours trading on Tuesday after missing EPS estimates with its Q3 earnings report and posting below-consensus guidance.
The retailer saw strong growth during the quarter with a 14.9% increase in domestic sales and a 24.6% increase in international sales.
Wholesale sales increased 26.2% during the quarter. By region, growth of 16.2% was recorded in the Americas driven by double-digit growth in the United States and growth soared 47.6% in EMEA driven by strong growth across Europe. APAC growth was up 8.6%, despite COVID challenges in China and Japan
Gross margin fell 280 basis points to 47.1% of sales. The gross margin drop wqas due primarily to increased freight and logistics costs, and a higher proportion of distributor sales, partially offset by average selling price increases. Operating margin was 40.1% of sales vs. 39.8% a year ago.
Looking ahead, Skechers sees holiday quarter sales of $1.725B to $1.775B vs. $1.81B consensus and EPS of $0.30 to $0.40 vs. $0.52 consensus.
CEO outlook: "While this broad-based consumer demand for Skechers is not unique to this quarter, we believe our ongoing momentum and strong product offering is a testament to the strength of our brand and resilience as an organization."
Skechers recently landed on a Goldman Sachs screen for cyclicals in the Russell 1000 that are attractive relative to recessionary earnings but also exhibit quality .
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Skechers slides after guidance disappoints