Skechers USA, Inc., a footwear company based in Manhattan Beach, has seen a significant decrease in revenues for the second quarter of this year as a result of the Covid-19 pandemic. The company reported a 42.0% decrease in total sales for the quarter, with sales reaching $729.5 million compared to $1.26 billion in the same period last year. This decline in sales was primarily driven by a 47.3% decrease in domestic sales and a 37.8% decrease in international sales. However, there was a slight offset with an 11.5% increase in sales in China.

The company also experienced a decline in wholesale revenues, with international sales decreasing by 29.9% and domestic sales decreasing by 57.2%. Direct-to-consumer sales fell by 47.1%, although there was a significant 428.2% increase in e-commerce revenues for the quarter. Despite this, comparable store sales in the company’s direct-to-consumer business fell by 45.6%.

Skechers reported a net loss of $68.1 million, or $0.44 per diluted share, for the second quarter, compared to earnings of $75.2 million, or $0.49 per diluted share, in the previous year. The Chief Operating Officer of Skechers, David Weinberg, commented on the impact of Covid-19, noting that the closure of businesses outside of Asia had a significant effect on the company’s business. However, he remains optimistic about signs of recovery witnessed during the quarter, especially in China. Weinberg also highlighted the recovering sales in Australia, Germany, South Korea, and Taiwan.

For the first half of the year, Skechers’ sales totaled $1.97 billion, marking a 22.2% decrease from the previous year. The company reported a net loss of $19.0 million, or $0.12 per diluted share, compared to earnings of $183.9 million, or $1.19 per diluted share, in the same period last year.

To navigate the financial challenges brought about by the pandemic, Skechers has implemented various measures to preserve liquidity. These measures include drawing down on its credit facility, cutting costs, and postponing non-critical capital expenditures. Despite temporary closures due to the pandemic, the company has managed to reopen 90% of its store network, which consists of 3,615 stores worldwide.

Due to the uncertainty surrounding the coronavirus crisis, Skechers has not provided any financial guidance for the third quarter or the full fiscal year of 2020. Nevertheless, the company remains committed to its position as a global footwear leader and is optimistic about its future prospects once the global health crisis stabilizes.

Useful links:
1. Skechers Official Website
2. Article on Skechers’ Q2 Financial Results