Skechers U.S.A. (SKX) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 sales of $2.41 billion, up 7.1% year-over-year, with constant currency sales rising 9.0% and EPS of $1.34, essentially flat year-over-year.

• International sales comprised 65% of total, with strong growth in EMEA and Americas, but a decline in APAC due to China.

• Net earnings attributable to Skechers were $202.4 million, a 2.0% decrease compared to the same quarter last year.

• Operating expenses rose 12.1% to $989.2 million, mainly from higher labor, facility, and demand creation costs.

• Continued investment in product innovation, retail expansion, and marketing, including new athlete endorsements and lifestyle campaigns.

Financial highlights

• Revenue increased 7.1% year-over-year; constant currency growth was 9%.

• Gross margin was 52.0%, down 50 bps year-over-year due to lower average selling prices and higher promotions.

• Operating margin declined to 11.0% from 13.3% last year; operating income was $265.1 million, down 11%.

• Direct-to-Consumer sales grew 6.0% to $879.4 million; wholesale sales rose 7.8% to $1.53 billion.

• Ended quarter with $1.24 billion in cash and investments; inventory up 30% year-over-year due to Suez Canal closure, but down 7.6% sequentially.

Outlook and guidance

• No revenue or earnings guidance provided due to macroeconomic and trade uncertainty.

• Management expects the effective tax rate for 2025 to be between 22% and 23% due to new global minimum tax rules.

• Annual capital expenditures for 2025 are projected at $600–$700 million, focused on new stores, omnichannel capabilities, and distribution capacity.

• Confident in achieving $10 billion in annual sales by 2026, supported by global demand and strategic investments.

• Management remains confident in long-term growth, especially internationally, but expects near-term volatility, particularly in the U.S. and China.