Skechers Cashes In On COVID-Era Walking Trend With Record Q1 Results

Footwear and apparel retailer Skechers said its first-quarter sales got a lift from its international sales and the continued consumer embrace of walking and other healthy lifestyle choices that have increased during the pandemic and led people to buy shoes to exercise.

Officially, Skechers said its first-quarter sales rose 15 percent to $1.4 billion for the three months ending March 3, while its international wholesale and direct-to-consumer revenues grew 24 percent and 18 respectively.

According to CEO Robert Greenberg, warmer weather and increased vaccination rates also contributed to the company’s record quarterly results.

“Skechers new sales record in the first quarter is a remarkable achievement, especially given the lockdown measures in many key countries, including across Europe,” Greenberg said. “This significant growth is the result of continued demand for Skechers product as consumers desire comfort and quality in their footwear and walking remains a top COVID-19 pandemic activity.”

D2C Is Sprinting

Skechers’ customers may be walking but the company’s effort to sell directly to customers online are moving much more quickly.

In addition to improved foot traffic at its 1,300 global retail stores, Skechers said it saw a surge in direct-to-consumer (D2C) sales last quarter which rose 143 percent domestically.

“Looking just at the domestic side of the business, e-commerce was close to 20 percent of our business,” CFO John Vandemore told investors and analysts on the company’s conference call, alluding to continued growth for the category as well as more challenging comparisons going forward.

“Honestly, it’s hard to put a top on it because I think what we will see on a continuing basis is that digital-only transaction volume will continue to grow,” Vandemore said, adding that this quarter’s “eye-popping numbers” will come down.

“We actually suspect that next quarter, the domestic number will be a bit more challenged, because you’re going to be comparing against a window where the only opportunity to buy product was online. So this is kind of the last quarter before that very difficult comparison but overall, we absolutely believe the business can continue to grow,” he said.

International Also Up

Triple-digit growth in China was another key area of growth for Skechers, as its dealings with 2,500 franchise, licensee and wholesale distributors rose almost 25 percent from a year ago.

The company is also looking to meet demand for sustainably sourced products, including its new recycled “BOBs” line of shoes.

“Consumers are returning to a new normalcy, one that involves more walking, more comfort on the job and a casual lifestyle mindset,” COO David Weinberg said on the call. “We are a natural choice for any demographic worldwide with comfort technology at our core and the record sales are a testament to the fact that consumers appreciate our product offerings.”

Skechers stock rallied more than 10 percent after the news after doubling in the past 12 months, a move that has lifted its market value to over $8 billion.