Tag: Skechers

Skechers China sales growth has fuelled optimism for the shoe brand after it reported a huge slump in sales for the June quarter due to stores being closed in other regions under Covid-19 lockdowns.

The company reported group-wide sales of US$729.5 million, a 42 percent year-on-year decrease, and a net loss of $68.1 million during the three months to June 30.

But sales in China rose 11.5 percent and sales on Skecher’s company-owned online store soared by 428.2 percent as buyers in some markets, unable to shop at physical stores, moved online.

“Skechers, like most businesses around the world, has never faced a more challenging time than during the pandemic, which caused the closing of nearly every market worldwide,” said CEO Robert Greenberg. “Covid-19 continues to be a serious concern globally, and the health and welfare of our team, partners, and customers remain our number one priority.”

Skechers stores were closed for varying periods of time in almost every market outside Asia.

“However, we remain optimistic about the early signs of recovery we witnessed during the quarter, including a return to growth in China, consistent improvement each month in some markets outside of China,” said COO David Weinberg.

“While every country’s recovery has been unique, we began to see a similar recovery trend, first reflected in China and now extending into other markets globally including Australia, Germany, South Korea, and Taiwan. We believe the positive sales trends in markets that have reopened, as well as the efficiency with which we addressed the pandemic challenges, are strong indicators that when the global health crisis stabilizes, Skechers will remain a global footwear leader.”

Greenberg said the company was a “resilient organization” driven by a dedicated and flexible team determined to do whatever it takes to not only survive but position itself for a return to profitability.

“Now, with more than 90 percent of our Skechers stores safely re-opened and some markets in the early stages of recovery, we believe that we will remain a brand consumers and retailers trust to deliver comfort, quality, and style. We are hopeful that global economies will continue to improve, and as they do, we will continue to operate efficiently and judiciously during this pandemic,” he said.

US footwear brand Skechers has reported a modest 2.7-per-cent drop in first-quarter sales brought on by the coronavirus outbreak – and painted a rosy picture of life beyond the coronavirus crisis.

“We are in unprecedented times, facing difficult decisions daily as we navigate this global pandemic that has negatively impacted every business throughout our industry and most others,” said Skechers CEO  Robert Greenberg.

“We know from the triple-digit growth we are experiencing so far this month in our e-commerce business and the positive sales trajectory of our recovering business in China, that Skechers’ product continues to resonate with consumers. As our business begins to return to normal, we firmly believe that our retail partners and customers will look to a brand they trust that delivers comfort, innovation, style, and quality at a value.”

The firm’s net earnings during the period were US$49.1 million, with adjusted net earnings $59.9 million, reflecting the impact of negative foreign currency rates and certain purchase price adjustments related to the company’s Mexico joint venture.

“We experienced strong momentum throughout 2019, which continued into the first two months of 2020,” said Skechers COO David Weinberg. “However, due to significantly reduced economic activity in China after January, and the spread of the Covid-19 pandemic around the rest of the world in March, sales decreased 2.7 percent in the first quarter. Until then, Skechers’ business was on track for a new first-quarter sales record.”

CFO John Vandemore said that despite “an extremely strong end” to last year and an equally strong beginning to this one, the company saw a notable slowdown in markets impacted by the Covid-19 pandemic.

“We have taken decisive action to fortify our business for the duration of this crisis, including drawing down on our senior unsecured credit facility, actively managing operating expenses, inventory levels and production orders, and deferring non-critical capital expenditures. We are confident that the actions we have taken and will continue to take, combined with the global strength of our brand and balance sheet, will position Skechers to successfully navigate this situation, and poise us to return to growth in the future.”