Skechers USA, Inc., the American footwear company headquartered in Manhattan Beach, California, has reported a significant decline in profits for the first quarter of 2020. This drop is attributed to the disruptions caused by the global coronavirus crisis. The company’s first-quarter net earnings fell by 54.9% to $49.1 million, compared to $108.8 million in the previous year.

The decline in profits was also evident in quarterly sales, which decreased by 2.7% to $1.24 billion, down from $1.28 billion in the first quarter of 2019. Despite the overall decline, there were some positive signs within the business. Domestic sales experienced a 2.9% growth, offsetting a 6.8% decline in international sales.

Direct-to-consumer sales suffered a 4.2% decrease, while domestic wholesale revenues saw a 9.0% increase. Same store sales in the direct-to-consumer channel dropped by 8.1%, with a 4.7% decrease in the U.S. and a 16.6% decrease internationally. Skechers’ international wholesale business faced challenges as well, with revenue decreasing by 8.4%, primarily due to a significant 47% decline in China.

Despite the negative impact of the coronavirus pandemic on its operations, Skechers remains optimistic about its future. COO David Weinberg emphasized that prior to the crisis, the company was on track to achieve a new first-quarter sales record. He also expressed confidence in Skechers’ brand strength and its ability to bounce back when markets reopen and consumer shopping activity resumes. To counter the effects of the crisis, Skechers has implemented several measures including drawing down on its senior unsecured credit facility, managing operating expenses, inventory levels, and production orders, as well as delaying non-critical capital expenditures.

However, due to the ongoing uncertainty surrounding the pandemic, Skechers has chosen not to provide any financial guidance for the second quarter or the full fiscal year of 2020. Like many others in the industry, the company is preparing for continued challenges as it navigates through the global health crisis. Nevertheless, with its strong product lineup and well-established brand, Skechers is confident that it will maintain its position as a leading footwear brand once markets stabilize and consumer activity returns to normal.

Useful Links:
1. Skechers Official Website: Find out more about Skechers and explore their range of footwear products.
2. Investor’s Business Daily Article on Skechers: Read about Skechers’ stock performance and recent news from an investor’s perspective.