Jul 24, 2020
Reading time
2 minutes
Download the article
Click here to print
Text size
aA+ aA-

Coronavirus knocks Skechers sales back 42%

Jul 24, 2020

Manhattan Beach, California-based footwear company Skechers USA, Inc. announced a notable decline in its second-quarter revenues on Thursday, as disruption caused by the Covid-19 pandemic took its toll on sales.

Following temporary closures, Skechers has now reopened around 90% of its stores - Instagram: @skechers

For the second quarter ended June 30, 2020, the company reported total sales of $729.5 million, a 42.0% decrease compared to $1.26 billion in the prior-year period. This decline reflected a 47.3% decrease in its domestic sales and a 37.8% decrease in its international business, where declines were partially offset by an 11.5% increase in China.
Wholesale revenues fell 29.9% internationally and 57.2% domestically, while direct-to-consumer sales decreased 47.1%, despite a mammoth 428.2% increase in quarterly e-commerce revenues. Overall, comparable store sales in Skechers’ direct-to-consumer business fell 45.6%.

The company’s total net loss for the quarter came to $68.1 million, or $0.44 per diluted share, compared to earnings of $75.2 million, or $0.49 per diluted share.
“The impact of Covid-19 to Skechers’ business was significant in the second quarter as we saw much of the world outside Asia shutter nearly all businesses,” commented Skechers COO David Weinberg in a release. “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, and record shattering growth of over 400 percent in our Company-owned e-commerce business.”
As well as China, Weinberg highlighted recovering sales in Australia, Germany, South Korea and Taiwan, concluding that “when the global health crisis stabilizes, Skechers will remain a global footwear leader.”
Taking into account the first quarter, Skechers’ first-half sales totaled $1.97 billion, down 22.2% from $2.54 billion in the same six-month period in the previous year. The company’s net loss for the period was $19.0 million, or $0.12 per diluted share, falling from earnings of $183.9 million, or $1.19 per diluted share.
Faced with the financial challenges of the Covid-19 pandemic, the company has implemented a range of measures aiming to preserve its liquidity. These have included drawing down on its credit facility, cutting costs and postponing non-critical capital expenditures.
Having implemented temporary closures in reaction to the pandemic, Skechers, which boasts 3,615 stores around the world, including 818 company-owned locations, 390 joint-venture stores and 2,407 distributor, licensee and franchise locations, has now reopened 90% of its store network.
Due to ongoing uncertainty surrounding the evolution of the coronavirus crisis, the company has not provided financial guidance for the third quarter or full fiscal year 2020.

Copyright © 2023 FashionNetwork.com All rights reserved.