Skechers U.S.A ( NYSE: SKX ) fell after-hours trading on Thursday after soft guidance overshadowed a strong FQ4 earnings report .
The retailer saw strong growth during the quarter with a 22.3% increase in domestic sales and a 8.7% increase in international sales leading to a record revenue tally of $1.88B.
Wholesale sales increased 15.7% during the quarter. By region, growth of 22.5% was recorded in the Americas driven by double-digit growth in the United States and growth shot up 28.9% in EMEA driven by strong growth across Europe. APAC sales were down 6.8% during the quarter.
Gross margin fell 40 basis points to 48.4% of sales. The gross margin drop was primarily the result of higher cost per unit and increased promotions, partially offset by average selling price increases. Operating expenses as a percentage of sales increased 60 basis points to 43.8%. General and administrative expenses as a percentage of sales increased 60 basis points to 35.4%. Increased expenses were primarily driven by volume-driven labor and distribution expenses in addition to higher costs at the domestic distribution center due to supply chain and logistics challenges.
Looking ahead, Skechers ( SKX ) sees full-year sales landing in a range of $7.75B to $8.0B vs $8.06B consensus and EPS of between $2.80 and $3.00 vs. $3.10 consensus.
CEO outlook: "With the recent elimination of the zero-COVID policy, we believe that our business in China will improve throughout 2023. In addition, while the inventory challenges at our domestic distribution center have been difficult to navigate, we are seeing improvements and remain confident in the strength of our brand and the demand for our products. We ended the year strong and expect to see continued growth in 2023."
Shares of SKX fell 2.40% in postmarket trading on Thursday.
Skechers has a consensus Buy rating on Wall Street and has a high Seeking Alpha Quant Score.
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Skechers U.S.A. stock dips after full-year outlook trails estimates