Shares of footwear and apparel maker Skechers USA Inc SKX are gaining after the company reported better-than-expected first-quarter FY24 earnings.
Skechers reported first-quarter FY24 sales growth of 12.5% year-on-year to $2.251 billion, beating the analyst consensus estimate of $2.204 billion.
The increase in sales was attributed to a 15.2% increase in International and a 7.8% increase in Domestic sales.
International sales constituted 65% of total sales with a 17% rise in Europe, the Middle East and Africa; 16% increase in Asia Pacific and 8% climb in the Americas.
"In the quarter, we also broadcast our first Skechers Basketball campaigns starring NBA players Julius Randle and Terence Mann, entered the world of cricket by sponsoring one of the leading men’s and women’s teams in India, and grew our roster of Premier League footballers with the addition of Oleksandr Zinchenko," said CEO Robert Greenberg.
Wholesale sales grew 9.8% and Direct-to-Consumer jumped 17.3%. Gross profit rose 20.7% Y/Y to $1.2 billion and the gross margin expanded 370 basis points to 52.5%.
Operating margin expanded 210 basis points to 13.3%, and operating income for the quarter increased 33.6% to $298.8 million.
In the first quarter, the company repurchased 1.0 million shares of its Class A common stock at a cost of $60.0 million.
As of March 31, 2024, $205.7 million remained available under the company’s share repurchase program.
The company held $946.4 million in cash and equivalents as of June 30, 2022.
The number of stores at the end of March 31, 2024, totaled 5,203.
EPS of $1.33 beat the analyst consensus of $1.10.
Outlook: Skechers raised FY24 sales outlook from $8.60 billion-$8.80 billion to $8.725 billion-$8.875 billion, against an estimate of $8.781 billion.
The company also raised FY24 EPS outlook from $3.65-$3.85 to $3.95-4.10 versus an estimate of $3.90.
Skechers sees second-quarter sales of $2.175 billion-$2.225 billion versus an estimate of $2.202 billion. EPS of $0.85-$0.90 against an estimate of $1.09.
SKX Price Action: Skechers shares are trading higher by 14.30% at $67.23 at publication Friday.
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