Skechers U.S.A., Inc. (NYSE: SKX) reported its fourth quarter and 2018 full-year results after market close on Thursday. The shoe maker crushed estimates and guidance outlook, sending shares surging by 19.3% during Friday’s pre-market hours.
For the fourth quarter, Skechers reported diluted earnings of USD 31 cents per share on revenue of USD 1.08 Billion. FactSet analysts expected earnings of USD 23 cents on revenue of USD 1.1 Billion.
Skechers fourth quarter sales grew by 11.4%, primarily driven by an 18.4% increase in the Company’s international wholesale business. Skechers global retail business grew by 7.5%, while its domestic wholesale business grew by 4.8%. Comparable same store sales in its owned retail stores, including e-commerce, rose marginally by 1.1%.
“2018 was a year of record sales—our first fourth quarter of over a billion dollars and, combined with three previous record quarters, a new annual sales record of $4.64 billion,” stated David Weinberg, Chief Operating Officer of Skechers. “For the quarter, this growth was fueled by double-digit sales increases in each of our international businesses—Company-owned retail, distributor, subsidiary and joint venture, and by single digit sales increases in both our domestic wholesale and retail businesses. For the year, we achieved double-digit sales increases across our international portfolio and single-digit sales increases in our total domestic business. In 2018, we also shipped a record number of pairs from our distribution centers across South America, North America, Japan and Europe, which is a testament to the strength of our global operations and the breadth of our international sales, which represented 54.0 percent of our total business for the year.”
Weinberg continued: “Our international business represents our most significant growth opportunity. To maximize on that opportunity in two key areas, we recently completed the transition of our India joint venture to a wholly owned subsidiary and reached an agreement in principle to establish a joint venture in Mexico with our current distribution partner. We expect these strategic investments to be accretive to our diluted earnings per share in 2019. Additionally, we continue to invest in infrastructure—we broke ground on our new distribution center in China in the fourth quarter as well as on the expansion of our global headquarters in Manhattan Beach in January. We remain focused on efficiently and profitably growing our business for the future.”
For the next quarter, Skechers expects earnings of USD 70 cents to USD 75 cents on revenue of USD 1.28 Billion to USD 1.3 Billion, while analysts are expecting USD 63 cents per share on revenue of USD 1.34 Billion.