Skechers USA - $SKX - Earnings Analysis: Consistent revenue growth and improved profitability.
Business Model
Skechers generates revenue through the sale of lifestyle and performance footwear, apparel, and accessories for men, women, and children.
Revenue Sources
- Wholesale sales to third-party retailers and marketplaces.
- Direct-to-Consumer (DTC) sales through Skechers retail stores (domestic and international) and e-commerce platforms (skechers.com).
- Distributor, licensee and franchise stores
Revenue Distribution by Channel
- For Q4 2024: Wholesale sales comprised $1,130.7 million, while Direct-to-Consumer sales were $1,081.7 million.
- For FY 2024: Wholesale sales comprised $5,100.5 million, while Direct-to-Consumer sales were $3,868.9 million.
Income Statement Analysis
- Sales increased by 12.8% compared to the same quarter last year, driven by both domestic and international growth.
- Earnings from operations increased significantly by 27.0%, indicating improved profitability.
Balance Sheet Analysis
- Total assets increased by 12.0% year-over-year, reflecting overall growth in the company's operations.
- Total stockholders' equity increased by 9.7%, indicating a strengthening of the company's financial position.
Capital Allocation
Skechers' capital allocation strategy includes share repurchases and investments in operations, including expanding distribution centers. During the fourth quarter, the Company repurchased 1.9 million shares of its Class A common stock at a cost of $120.0 million. In 2024, the Company repurchased 5.2 million shares of its Class A common stock at a cost of $330.1 million.
Management Commentary
We delivered record full year sales of $8.97 billion in 2024, or $9.04 billion on a constant currency basis, reflecting the continued robust global consumer demand supported by effective marketing campaigns.
Skechers delivered exceptional results in 2024 and exceeded our expectations on a constant currency basis with full year sales of $9.04 billion and earnings per share of $4.40.
Though challenging market and shipping conditions persisted in a few countries, the strength of our business is attributable to our differentiated market position
Despite continued headwinds in China.
Overall Sentiment: Positive, with emphasis on global growth and strong financial performance, but with acknowledgment of challenges in specific markets.
Recommendation
Rating: Buy
Reason for Rating: Skechers has demonstrated strong financial performance and growth, making it a good investment.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.
Generated on: 2/7/2025, 1:29:44 PM