- **Record Q1 Revenue**: $2.41 billion, up 7.1% YoY, driven by 14% growth in EMEA and 8.3% in Americas.
- **International Dominance**: 65% of revenue from international markets, with APAC (ex-China) up 12%.
- **DTC Expansion**: 51 new stores opened, 15 in China, with 12% APAC DTC growth excluding China.
- **Gross Margin Pressure**: 52% gross margin due to China promotions, but 12% APAC (ex-China) DTC growth offsets challenges.
- **Tariff Mitigation**: Flexing production sources, cost-sharing, and selective price adjustments to manage U.S. tariffs.
- **China Recovery Plan**: Investing in comfort tech products and demand creation to stabilize sales in China.
- **Liquidity Strength**: $1.24 billion cash, conservative capital allocation amid macro risks.


**【CEO Summary Section】**
- Q1 2025 revenue reached $2.41 billion, a 7.1% year-over-year increase, with direct-to-consumer (DTC) sales up 6% to $879.4 million.
- International markets drove 65% of total revenue, with EMEA sales up 14% and Americas up 8.3%. APAC sales declined 2.6% due to China's economic challenges, but grew 12% excluding China.
- Expanded retail footprint: 51 new company-owned stores opened, including 15 in China, and 50 third-party stores globally.
- Strategic investments in distribution centers in the U.S., China, and Europe to support growth.

**【CFO Financial Commentary】**
- Gross margin declined 50 basis points to 52% due to higher promotions in China and customer mix.
- Operating expenses rose 180 basis points as a percentage of sales to 41%, driven by brand-building investments and DTC expansion costs.
- Earnings per share (EPS) remained flat at $1.34, reflecting $26.6 million in foreign exchange losses.
- Inventory increased 30% year-over-year to $1.77 billion due to elongated transit times from the Suez Canal closure.
- Capital expenditures of $147.1 million focused on distribution infrastructure, new stores, and digital technologies.

**【Q&A Key Highlights】**
- **Tariff Mitigation Strategy**: Levers include cost-sharing with vendors, sourcing optimization, and selective price adjustments. China production for U.S. is expected to decrease, but 2/3 of business is outside the U.S.
- **China Market Recovery**: Investments in comfort technology products and demand creation aim to stabilize sales, with 12% growth in APAC excluding China.
- **Inventory Management**: Focused on pre-clearing goods through free trade zones; Q2 and Q3 will see tariff impacts, with potential price adjustments in the U.S.
- **DTC Growth**: 150-170 new stores planned for 2025, prioritizing international markets with strong regional growth (e.g., Japan, Thailand, South Korea).
- **Kid’s Footwear Challenges**: Most kid’s products sourced from China due to regulatory requirements, but exploring alternative production sources.
- **Liquidity and Capital Allocation**: Maintained $1.24 billion in cash, with conservative capital deployment amid macroeconomic uncertainty.


Skechers U.S.A. (SKX)-24 Apr 25-2025 Q1 Earnings call transcript

- **Record Financials**: $9.1B sales (+13%), EPS $4.40 (+26%), 53.2% gross margin.
- **Global Expansion**: Cricket footwear now global, 10% intl sales growth.
- **Strategic Partnerships**: Rolling Stones co-branded collection, athlete roster expansion.
- **2025 Growth Drivers**: Product innovation, intl DTC expansion, margin improvement.
- **Sustainability Focus**: Eco-friendly materials investment.


**【COO Opening Remarks】**
- **2024 Full Year Performance**: Constant currency sales of $9.1B (+13%), EPS $4.40 (+26%), gross margin 53.2%, operating margin 10.1%.
- **Q4 2024 Results**: $2.24B sales, EPS $0.86. Growth across channels (wholesale +17%, DTC +8%) and geographies (US +18%, intl +10%).
- **Product Innovation**: Expanded into soccer, basketball, cricket with elite athlete partnerships. Launched Skechers Hand Free slip-ins and Arch Fit technologies. Collaborated with John Deere, Martha Stewart, Snoop Dogg, Rolling Stones.
- **Athlete Partnerships**: Added Premier League, NBA, WNBA, and cricket stars to global roster. Launched cricket line in India, now global.
- **Marketing Expansion**: Super Bowl campaign planned. Regional campaigns with influencers in Mexico, SE Asia, Spain.

**【CFO Financial Highlights】**
- **Revenue Growth**: US +18%, intl +10% driven by DTC and wholesale recovery.
- **Profitability**: 53.2% gross margin, 10.1% operating margin. Share buybacks of 5.2M shares.
- **Balance Sheet**: Strong liquidity with healthy cash reserves.

**【Analyst Q&A Highlights】**
- **Gross Margin Strategy**: Focus on product innovation (performance footwear) and cost control.
- **International Expansion**: Priority on China, India, Brazil. Direct-to-consumer growth in intl markets.
- **Sustainability**: Investing in eco-friendly materials and supply chain improvements.
- **Competitive Position**: Differentiated by price-performance ratio and category expansion.
- **2025 Outlook**: Expect mid-single digit sales growth, margin expansion through product innovation.


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