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Skechers Reveals Strong Q2 Earnings on Wholesale Boom

Skechers reversed its second quarter net loss Thursday — thanks to revenue that more than doubled, led by domestic and direct-to-consumer sales.

The footwear brand said it earned $137.4 million, or 88 cents a share, for the three months ended June 30, which compares with a loss of $68.1 million, or 44 cents, a year ago.

Revenues rose 127.3% to $1.66 billion from $729.5 million in the second quarter last year.

Domestic wholesale sales popped 205.7% to $339.7 million, with the company citing higher unit sales volume. Direct-to-consumer sales rose 137.8% to $507.9 million, led by growth across domestic and international retail stores; the sales, though, were offset by a decline in domestic e-commerce sales, Skechers said.

“We accomplished these financial results even as we continued to face COVID-19 related challenges including delayed shipments and port constraints as well as temporary store closures in some key markets, including India, Canada, and parts of Europe and South America,” said David Weinberg Skechers COO, in a statement.

Higher average selling prices and reduced promotional activity led to a 72 point increase in gross margins to 51.2%.

“Our record second quarter results reflect the outstanding execution of our long-term growth strategy. Led by our comfort technology products and resonant brand, we continued to expand globally and further our direct-to-consumer presence,” said John Vandemore, CFO of Skechers, in the statement. “The result was evident in growth across our segments and record profitability and is a testament to the prudence of the infrastructure investments we have made and are continuing to make to support our brand and our strategy. These factors coupled with the strength of our balance sheet, give us abundant confidence that Skechers remains poised to continue growing long into the future.”

Looking ahead to fiscal year 2021, Skechers said it expects sales between $6.15 billion and $6.25 billion and diluted EPS between $2.55 and $2.65.

Sales in the third quarter are seen between $1.60 billion and $1.65 billion and diluted EPS between 70 and 75 cents, the company predicted.

Skechers shares closed up 1.9% on Thursday at $51.21, and were up more than 6% in after-hours trading.

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