The American brand’s wholesale revenues outside the USA grew by 42 percent in the 4th quarter of 2007 and by 46 percent for the full year in terms of U.S. dollars. Non-domestic retail sales rose by 12 percent in the quarter and by 20 percent for the year with improvements in each region except in Germany, where Skechers closed its Frankfurt store in January 2007.
Sales to foreign distributors went up by 30 percent in the quarter and by almost 38 percent for the 12 months, but the revenues of its foreign subsidiaries increased much faster. They jumped by 70 percent in the quarter, contributing to a 53 percent increase for the full year.
The strong performance was aided by the opening of new subsidiaries in Brazil and Malaysia. Triple-digit growth was recorded by the subsidiaries in Italy, France, Spain and the Benelux countries. The three largest subsidiaries – in the UK, Canada and Germany – had double-digit sales increases.
On the other hand, the softness of the U.S. market and the phase-out of two sub-brands led to a 0.8 percent overall sales drop to $302.0 million for the company in the latest quarter, in spite of 12 percent higher retail sales and a double-digit increase in the e-commerce business. Domestic wholesale revenues were off by 16 percent in the quarter, but the first quarter of 2008 should be better, considering that the year ended with a 29 percent increase in the order backlog.
Quarterly net earnings declined by 17.1 percent to $12.1 million. For the full year, net profit was up by 6.6 percent to $75.7 million on 15.7 percent higher revenues of $1,395 million. The gross margin fell slightly to 43.0 percent from 43.4 percent in the previous year.
The 180 Skechers stores owned by the company represent about 20 percent of its total turnover, and 25-30 more will be added in 2008. Including franchised units, there are now 250 Skechers stores around the world.