Skechers's Shares Rise as Profit, Sales Top Estimates--Update

By Sara Germano and Tess Stynes 

Skechers USA Inc. profit more than doubled in the second quarter, soaring on stronger-than-expected sales growth amid a footwear market that is increasingly receptive of casual-wear shoes.

The Manhattan Beach, Calif.-based company reported profit of $79.8 million for the period ended June 30, up 129% from the year-ago period, while revenues climbed 36% to $800 million. Shares rose 13% to $145 in recent after-hours trading as per-share earnings also beat analysts' estimates.

Skechers, which sells casual and fitness shoes, has continued to report higher sales in recent quarters while the so-called athleisure trend overtakes retail, catering to consumers who are increasingly buying sport-styled fashions for both work and play. Running-shoe sales are being driven for the first time shifted by lower-priced casual models, instead of premium, high-tech training shoes, according to SportsOneSource.

Earlier this year, Skechers surpassed Adidas AG to become the second-place sports footwear maker by U.S. retail market share, according to industry tracker NPD Group. The industry is overwhelmingly led by fellow competitor Nike Inc.

David Weinberg, chief operating officer and finance chief, said Wednesday that the latest quarter "benefited from both pent-up demand resulting from U.S. port issues in the first quarter as well as a shift in back-to-school shipments" stemming from stronger demand domestically and abroad. International wholesale and distributor sales were up 60% to $90.8 million, and the company expects its international division to grow to 50% of the total business in the next three to four years, Mr. Weinberg said.

Chief Executive Robert Greenberg said Skechers remains comfortable with analysts' estimates for the second half of the year, citing higher backlogs at the end of June, strong incoming order rates, July sales, positive wholesale reports and plans for additional stores.

Analysts polled by Thomson Reuters expected per-share profit of $1.01 and revenue of $736 million.

Write to Sara Germano at [e-mail] and Tess Stynes at [e-mail]

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