Skechers Q2 Earnings: Revenue Surpasses Expectations, EPS Misses

Skechers reported Q2 non-GAAP EPS of $0.83, missing estimates by $0.03. Revenue of $2.44B beat expectations by $90M, with wholesale sales growing 15.0% and direct-to-consumer sales growing 11.0%.

Skechers U.S.A., Inc. (NYSE: SKX) reported its second-quarter fiscal 2025 (FY25 Q2) results, showcasing robust revenue growth but also highlighting significant margin pressures. The company reported GAAP revenue of $2.44 billion, a 13.1% year-over-year (YoY) increase [1]. This performance exceeded analyst estimates, with non-GAAP revenue surpassing expectations at $2.41 billion. The company's earnings per share (EPS) matched the expected $0.83 [1].

However, the quarter was marked by declining gross and operating margins. Gross margin fell to 53.3% from 54.9% last year, while operating margin (GAAP) decreased to 7.1% from 9.6% [1]. These declines were attributed to increased spending on brand marketing and distribution expansion, as well as higher promotional activity, particularly in China [1].

International growth and direct-to-consumer sales were key drivers of Skechers' Q2 performance. The Europe, Middle East, and Africa region saw sales rise by 48.5% YoY to $731.5 million (GAAP), while international sales overall increased by 22.0% (GAAP) [1]. However, China remained a weak link, with sales declining 8.2% (GAAP) for the quarter, down 12.1% for the first half of the year [1]. In the U.S., domestic sales held nearly steady, with wholesale activity declining by 7.5% to $413.3 million (GAAP), but direct-to-consumer sales rose by 7.6% (GAAP) to $448.8 million [1].

Despite the revenue growth, the company did not provide forward-looking financial guidance due to heightened uncertainty in global trade dynamics and the unpredictable consumer environment [1]. Investors will need to closely monitor Skechers' ability to manage margin pressure as operating and distribution costs rise, and as new tariffs impact the cost of goods sold [1].

References:
[1] https://www.nasdaq.com/articles/skechers-revenue-jumps-13-fiscal-q2
[2] https://www.rttnews.com/3564250/skechers-usa-inc-announces-increase-in-q2-profit.aspx
[3] https://finance.yahoo.com/news/skechers-announces-second-quarter-2025-201000506.html