India top Asia Pacific market for Skechers

India topped in sales in Asia-Pacific region for Skechers U.S.A. Inc, in the second quarter earnings that ended in June as the South Asian nation contributed a robust 27% of the global business for the American footwear giant in those months.

India’s share in Skechers’ global sales were even higher than its larger neighbor China that accounted for 19% of the US giant’s revenues in the April-June months. Only Germany, with 29%, registered higher sales than India in the quarter, the California-based company said.

“Skechers second quarter results set a new quarterly sales record of $2.01 billion. We saw increases of 20% in APAC (Asia-Pacific), including 19% in China and 27% in India, as well as 16% in EMEA (Europe, the Middle East and Africa), including 29% in Germany and 13% in the UK. Our strong gross margin of 52.7% was primarily driven by a higher proportion of Direct-to-Consumer sales, which grew 29%,” said David Weinberg, Chief Operating Officer at Skechers.

Second quarter sales increased 7.7% as a result of a 17.9% increase internationally and a 4.6% decrease domestically. Direct-to-Consumer increased 29.1% and Wholesale decreased 5.9%. On a constant currency basis, sales increased 9.1%.

Direct-to-Consumer sales grew $212.0 million, or 29.1%, which includes increases in America (AMER) of 28.2%, APAC of 25.1%, and EMEA of 47.2%. Direct to consumer volume increased 23.8% and average selling price increased 4.4%.

Gross margin was 52.7%, an increase of 460 basis points, primarily due to a higher proportion of Direct-to-Consumer sales and higher average selling prices.

Operating expenses increased $99.4 million, or 13.4%, and as a percentage of sales increased 210 basis points to 41.9%. Selling expenses increased $20.5 million, or 12.3%, and as a percentage of sales increased 40 basis points to 9.3%. The increase was due to higher brand demand creation expenditures. General and administrative expenses increased $78.9 million, or 13.7%, and as a percentage of sales increased 170 basis points to 32.6%. Increased expenses were primarily driven by labor, increased facility costs, including rent and depreciation, and warehouse and distribution expenses.

Earnings from operations increased $63.5 million, or 41.2%, to $217.7 million. Net earnings were $152.8 million and diluted earnings per share were $0.98 compared with the prior year net earnings of $90.4 million and diluted earnings per share of $0.58.

Earnings from operations increased $111.2 million to $441.3 million.

Net earnings were $313.2 million and diluted earnings per share were $2.00, an increase of 48.1% over the prior year.

For the third quarter of 2023, the Company believes it will achieve sales between $1.95 billion and $2.0 billion and diluted earnings per share of between $0.70 and $0.75. Further, the Company believes that for the fiscal year 2023, it will achieve sales between $7.95 billion and $8.1 billion.

Skechers U.S.A., Inc., a Fortune 500 company based in Southern California, designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. Collections from the company are available in approximately 180 countries and territories through department and specialty stores and direct to consumers through digital stores, and over 4,700 Company- and third-party-owned physical retail stores.