Skechers: What Drove Its 4Q17 Top Line?
Strong 4Q17 growth
As we saw in the previous part of this series, Skechers (SKX) recorded a 27% increase in its 4Q17 top line. It was the company’s fastest growth over the last seven quarters.
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Skechers showed strength across all channels and geographies. Its international wholesale and domestic wholesale businesses expanded 40% and 11.6%, respectively, while its global retail business grew 25.8% during the quarter. The international wholesale and retail businesses together accounted for 52.6% of the company’s total 4Q17 sales.
Skechers recorded double-digit growth across all channels in fiscal 2017 and increased its global retail footprint to 2,570 stores.
How Skechers performed in North America
Skechers’s North America wholesale business grew 11.6% in 4Q17, driven by a 14% increase in shipments. The increase was partially offset by a 2% decline in the average footwear price due to a shift in product mix. Both men’s and women’s footwear sales grew at a double-digit rate.
Retail sales in the region grew 15.2%, driven by a 10.5% growth in comps (comparables).
“In the United States, we remained the No. 1 walking, work, casual lifestyle, and casual dress footwear brand, and the No. 2 casual athletic footwear brand,” said Robert Greenberg, chief executive officer for Skechers.
Looking at international growth
International wholesale is Skechers’s largest revenue channel and accounted for 41.5% of its total sales in fiscal 2017. This distribution channel increased 24% YoY (year-over-year) in fiscal 2017 and grew an impressive 40% during the fourth quarter.
Behind the quarterly growth was a 54% rise in Skechers’s subsidiary and joint venture businesses. China, South Korea, and the United Kingdom recorded the highest dollar gains, while Italy and Spain posted the highest percentage gains during the quarter.
International retail also remained robust, recording a 53% YoY growth in 4Q17. Sales comps remained healthy and increased 16.5% during the quarter.