- **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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

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SKX fundamentals

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