Skechers Reports Record $2.41 Billion Sales in Q1 2025, Despite Decline in Net Earnings

Skechers U.S.A., Inc. reported a record sales figure of $2.41 billion for the first quarter of 2025, marking a 7.1% increase from $2.25 billion in the same period last year. The growth was driven by a 7.2% rise in international sales and a 6.9% increase in domestic sales. The company's gross profit for the quarter was $1.25 billion, with a gross margin of 52.0%, slightly down from 52.5% in the previous year. Despite the increase in sales, net earnings attributable to Skechers decreased to $202.4 million, down 2.0% from $206.6 million in the prior year, while diluted earnings per share remained stable at $1.34.

Operating expenses rose significantly, increasing by 12.1% to $989.2 million, primarily due to higher selling and administrative costs. Selling expenses increased by 18.3% to $185.1 million, driven by increased demand creation expenditures, while general and administrative expenses rose by 10.7% to $804.2 million, reflecting higher labor and facility-related costs. The increase in operating expenses contributed to a decline in earnings from operations, which fell to $265.1 million, down 11.3% from the previous year.

In terms of strategic developments, Skechers continues to expand its global footprint, with notable increases in sales across the Americas and Europe, the Middle East, and Africa. The company has also focused on enhancing its product offerings, including new partnerships with athletes and promotional campaigns, such as a recent commercial featuring Kansas City Chiefs head coach Andy Reid. The company is committed to achieving its goal of $10 billion in annual sales by 2026, supported by ongoing investments in its distribution infrastructure and retail presence.

Operationally, Skechers reported a significant increase in capital expenditures, totaling $147.1 million for the quarter, compared to $57.1 million in the same period last year. This investment is aimed at expanding its global distribution capabilities and enhancing its direct-to-consumer business. As of March 31, 2025, the company had cash and cash equivalents of $993.1 million and unused credit capacity of $615.4 million, providing a solid liquidity position to support its growth initiatives.

Looking ahead, Skechers anticipates continued growth driven by strong consumer demand and strategic investments. However, the company also faces challenges, including potential impacts from global economic conditions, trade policies, and competition in the footwear market. The effective tax rate for the quarter increased to 22.3%, influenced by new global minimum tax rules, which may affect future earnings. Skechers remains focused on navigating these challenges while pursuing its long-term growth objectives.