SKX - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to Skechers First Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to Relations. conference like host to now Investor Skechers would turn over this your I you. Thank

may You begin.

Unidentified Company Representative

Safe statements Thank may or Skechers statements expectations I involve the of conference that everyone addressing constitute call statement. you for objectives, and or risks today. forward-looking will joining the beliefs, the now statements estimates without company herein, events including, contained us plans, on Harbor uncertainties. limitation, Certain or read results future

and a had results at limitation, has the the on COVID-XX of and is as forward-looking pandemic about time. significant significant COVID-XX such to having conditions, what impact and of impact include, the circumstances company's forward-looking duration change uncertainty currently statements. The flow, a statements pandemic. actual the response from said could there means in the of this could any by the financial is call business, these differ contemplated without Specifically, plans COVID-XX that pandemic to the nature At materially is pandemic. dynamic results time, Such those company's And with result, cash this respect operations. of this on extent

operations. expressed any limited Exchange unknown general with and involve There or be to, statements assurance but filings reports to that a with our risk including Form SEC reports by as industry federal Weinberg by Chief the most Securities With results that, conditions, they retail the XX-K, call company's economic and all XX-Q, Vandemore. filed and Skechers' specifically for encouraged X-K, David to achievements forward-looking John statements required other future U.S. that turn the description Officer, Additional forward-looking on and annual cash no implied factors Users current recent securities review or global, to I business, the all actual over company. and the of other will are the flows of apply reports the can local significant risks, statements like Financial the performance financial on as Officer, may results, forward-looking market of would Commission, Form occur. company's of and including, David? and known and and affect national report in not Form business laws conditions Operating on to quarterly Chief the

David Weinberg

first quarter our to conference everyone Welcome call. XXXX

partners, close our in the Europe I like in of to Before discuss to to the the result with as the innocent record to we acknowledge Ukraine. a quarterly war results, devastating million victims working for half donated ground humanitarian we a have relief employees and dollars Together impacted. would our on crisis provide organizations

team year our off XXth Skechers As are new with the first Skechers quarterly a sales by the an to this well-being impacted marks concern always, those well-being we of of conflict. billion. and is This over start X.X and anniversary, excellent the of XXXX record in

We what are we've be holds. and achieved about couldn't accomplishments more excited milestones of the and proud the future

to remain in on lifestyle. embrace an Pickleball the in events Nelson with clear is Skechers sponsor city like And shops and LPGA’s the retailers screens for Angeles, as company. along Munich U.S. London Los at been and as around and a and streets. this the world. Los Skechers Open major in comfort truly This technology to Championships stores, home, also have and choice surrounding comfort consumers Open LA alongside Angeles the product Mumbai offering the the displays the in never whether is Our stronger. enthusiasm and phones the being or shops marketing Willie or in We is in active and mall footwear official everywhere. month Superbowl Skechers commercials It and brand from campaigns, it's apparent on to our the with leading here continue

quarter Now how transparency me structure we that lead our updates our business manage the in will be ago. and results. include we information reporting reflects website. our turn announced and this to first results, investor We our which changes to improve More best can regarding believe our found operational in approach let these two weeks

between The Sales related store worldwide chain domestic sales ongoing continue grew record well achievement given pandemic nearly supply we face, first quarter XX% is and disruptions. including the remarkable a closures overall, challenges to balanced consumers impactful international due team the our enhanced We XX%. believe growth demand worldwide growth comfort and significant broad of to infrastructure. globally from the and XX% multimedia was by marketing, of supported innovative products base for growth

and now the in unit. product at and business strong sales our through awareness by demand well U.S. performance in in our and ability both our reflective led XX% quarter, our worldwide. process particular XX% availability to as wholesale genders which reflecting In international per inventory. our growth total of brand Of wholesale were grew the receive due and Americas improved increased EMEA, the units across XX% business quarter, markedly retail, improvements and in in increase and Overall, shipped, the additional of average X.X% sales, XX% by of Our increase over to categories, sell double-digit price a quarter. note an consumer comprises strong increased of driven most wholesale as

result the growth Europe. across the EMEA, of of was increases all For

continued quarter. in weakness X%, lower in quarter than over impact sales achievement operate. our the were to grew the long-term COVID wholesale where ability our in Pacific essentially the flat notable targets, year-over-year though constraints China Asia to the to region, negatively a the given due

in We quarter expect with pandemic. throughout contend the of APEX the as governments impacts market the second challenges continued

in and in the growth in-transit Skechers long-term this in for growth return We to historical increased and the prospects confident the to recognize Skechers. us strength inventory significantly brand get our wholesale they a worked the worked are process the patterns they retail consumers to reliability have value We We relationship as with invested of of partners region. diverse diligently want. product who our to ensure and network partners, alongside personnel

Turning primarily COVID-related year's sales business, XX% direct-to-consumer store EMEA, increased operating led closures quarter, increased and by last in in the results reflecting to over restrictions. where sales our XXX%,

location However, price Skechers Americas XX% XXXX quarter, robust end, respectively. result United from States stores China, the and stores, in increased in technology locations in the company of and remain we X.X% by saw open physical and which our in X comfort including and States in stores APAC, our business, in across double-digit a XXX Bolivia, primarily XXX we including including the In all both the consumer end opened fewer quarter, including the XX promotions. the first We our our XX% to demand improvement ecommerce by United worldwide including demand per the X,XXX We X average Skechers in a of to XX XX quarter, and opened a XX and growth in the unit period. there at plan innovative third-party In China. owned regions, to-date, stores, opened more closed the second of year first quarter, first Skechers a in were an stores offerings for company which for owned XX as locations. grew we've and additional XX

our and sites in ecommerce new platform year. quarter, the priorities, and our And first of strategic our others of launch the new sites have we across our this Italy plan France launched Netherlands in and South to already Europe, Asia this Spain. and and in launch with supporting growing America globally. in quarter needs of presence The rollout the our continued the expanding meeting new on focused remain consumers investments brand direct-to-consumer the business, Our of

in also further omni-channel Japan We retail rest in in continue by the to an of Belgium, POS and with the investments end quarter of invest progress be Europe as by the to our our These our retailer. quarter. systems completed capabilities third upgrading the

the through certified We be third on American goods the distribution XXXX. expect center have our expansion and improved flow quarter gold of LEED of operational our North to in

location the distribution new and distribution center our in locations and expect to Canada centers for finalized also in have which we in XXXX be India, recently secured We opened Chile. have for

in to demand Panama next our and this new our technology planning a Investments introduced that in in collections distribution year, in Peru global the also are offerings. continue innovative fit and result product XXXX. China We Colombia several for in year, our and open quarter marketing comfortable comfort We enhanced center expand distribution in product. to and strong and facilities new function

Nelson Stewart launch We Martha Rusty also and Willie ambassadors Kloots. and with Chris Carter, new Wallace two introduced campaigns and Amanda

athletes financial more base. ever-widening an to to the I details call over us now, well-known and our the playing in agreement quarter, players Parenteau with we pickleball global pro Pro of This growing footwear. Tyson talent would are to And and who announced appeal results. roster like and to John This for Matt allows McGuffin turn Pickleball Skechers Fitzpatrick Catherine on Golfer consumer

John Vandemore

internal we Thank of quarter coupled everyone. record despite the derived made again investments growth. and shutdowns, other macro economic and ongoing solid in COVID-related The external with you, the global portfolio, our This from strength expectations. we and chain infrastructure headwinds have product delivered restrictions once afternoon supply exceeding and David, consumer our first comfort capabilities good Skechers disruptions, operating and demand faced. technology results fueled

structure touch financial for performance this strategies. segment how on Commencing are our we that direct-to-consumer and wholesale year, want decisions segment new our operations, quarter the our first of venture as results mentioned, reporting growth we business, discussing results well first as joint run make our quarter, new As Before reporting unveiled entities. to segment support and I of our the recently assess we to this including reporting reflects David with

regional this we sales provide available Historical and will webpage. reporting, the performance in that we In international improved XXXX format XXXX greater and both introducing believe domestic recast for including brand. addition, our are of are geographic our into and Relations on transparency results reporting, reporting, Investor enhanced and visibility

to saw result XX% lead turn updated of increased of year. growth to performance. increased X.XX quarter a shipments receipts On financial the XX% of increased sales the pace our XX% billion, increase a of quarterly X.XX an accounts. or XX% wholesale results million to to from let's our by domestic significant prior details in improvements We Sales year-over-year growth domestically the and first as Wholesale operating and basis the million. billion sales currency a record XXX.X quarter and in XXX.X new XX% constant internationally. Now segment

growth of XX% closures million markets Several of addition mid-teens last saw in by In average strong traffic to selling to prices. and year's year-over-year domestic remains increased as international growth through COVID XXX.X supported component respectively. delivering and X% globally. direct-to-consumer improvement XX%, sell and Direct-to-consumer ecommerce overall significant markets critical strategy, compared to a higher sales and our

to and resonance to omni-channel first in the for year-over-year turning quarter growth. markets our significant wholesale the quarters continue impacted in million and regional or particularly were invest expand Africa three million for recovery million of the results, and continue our a capabilities. year-over our East XX% or by Middle Americas, shipments which customers many We inbound increased to United our strong digital we to And receipts. XXX.X Europe, in And In the see pandemic drove States, and in sales XXX.X the XXX.X as sales now sales. the AMEA, XXX.X million online XX% pace last further brand improvement year-to increased the accounted presence outbound to heavily In over of that or year.

We the devastating crisis region. and concerned humanitarian with are deeply in war the

long sales Ukraine, to which X% As remain we through both of countries, distributor many Russia standing and than in know, suspended. both in of XXXX relationships less operate represented sales and you

yet weakness events to change growth Skechers increased The in in million in X% January several In China monitor to patterns in products or adjacent our well a the was by February. sales COVID region. year-over-year driven XX.X strong closely continue in brand EMEA markets. to led ecommerce partially X% China, million and Asia where consumer resonate have spending in APAC, but by to continue see induced offset growth in and performance XXX.X discretionary Pacific We material or by

of retail of feel our March cautious in brand effects we the the relative but remain a beginning April, adopting and in pandemic. to emerged, long-term next as the the region the to into continuing optimistic over are APAC COVID continues about patterns and have slower traffic However, health expected few quarters. We performance view negative China operational limitations

percentage have Selling as we of percentage XXX introduced. General from of year. share sales. quarter year-over-year outstanding previously average all margin last leveraged our and $X.XX to higher a and year-over-year closures. as as the were First sales to shares which year's have points impact XX% pressures increased higher to expenses price freight of partially against direct-to-consumer points a increased growth for wholesale X.X% XX% adjustments of the operations on international mix as These XX in improved XXX.X XXXX reflect the year-over-year unfavorable percentage XX% improved COVID-related to wholesale from basis primarily higher an costs compared basis by sales. was prices, as domestic leveraged selling offset after per pressures. a to mentioned quarter share sales gross were expenses basis basis returned expenses administrative business gross meaningfully expenses The due was XX.X% XX margin points sales Earnings margins fully year-over-year. the from as to decrease per Operating yet diluted improved as prior selling year-over-year decreased points XXX due representing XX.X%. compared were to Earnings well diluted million operating with XX.X%

flat prior nearly was quarter at first the for rate tax XX%. to year effective Our

we cash or sheet, with This of a XXX.X XX, March investments. from XX% ended quarter and reflects our balance in turning Now equivalents million the XXXX. million cash, XXX.X decrease to

As credit repaid a XXXX. our in the quarter we facility fully reminder, revolving of second

of XX.X the year-over-year to In of nearly increased predominantly million, million was our new higher million stores. or the inventory expansion XX.X the India, domestically of distribution This to expenditures and globally, in XXXX, addition, and in the particularly XX.X an the and million investments feeling corporate prior were includes from investments million X.XX transit receivable Inventory from XX, the Accounts at which offices wholesale were our quarter. increase first we direct-to-consumer working end million of our to XXX.X versus billion related of of Capital XX% in are quarter in XX.X back over XX%. million an inventory, quarter infrastructure requirements of the March and a increase balance related related results sales or of receivable. X year. of retail increase technologies effects for capital accounts XXX.X over half XXX year-over-year billion,

the capital of between and In repurchase reflecting previously expenditures our corporate million remainder we in and our continued we total States internationally, infrastructure, XXX and three United expect the distribution capital announced year our share capabilities XXXX, with XXX program. allocation For alignment philosophy, to investments $XXX omni-channel a in million offices. both be million

first stock repurchased the XX During quarter, common shares a XXX,XXX of our Class of we million. at approximately A cost

philosophy in and toward deploy to our capital consistent to shareholders. our returns continue with will We this business investments direct

supply remain Now our our of ongoing our we a the inflationary pressures, confident I But second including as China, business until quarter as and well around more of will growth external turn recent conservative to into external the strategy. we and disruptions, guidance. consumers, are in these certainty outlook headwinds. We more unrest, in have severity shutdowns length particularly in COVID-related incorporating because geopolitical escalating both chain pressures our on guidance,

$X.XX net range For range billion, expect in to share we and the X.X fiscal per $X.XX. XXXX, be billion the to sales of be to diluted in of to earnings X.X

expect diluted we that improved X.XX in to billion be $X.XX last offset compared will X.X share to We range and and year, both quarter, gross per to billion year, will range net quarter, second $X.XX. of sales of costs the second the earnings margins freight the to for as in full pricing. anticipate For the the be in down

takes the as gross year improve However, effect. our previously over introduced pricing expect we margins do course wholesale of the to

XX%. Our to is effective tax XX% expected rate for be the between year and

call turn remarks. closing the I'll Now over David for to

David Weinberg

and year XX% result Skechers This the year billion business quarterly a increases Skechers wholesale was we notable our achievements style, following in shape on quality macro-economic business. in our headwinds. with sales attributes. record mark innovation, sales these the related XXXX. and record given comfort pandemic want is growth of of first quarter price of our the direct-to-consumer casual and and reasonable Consumers at great in XX% business as in XXth all in X.X delivers

the comfort are We company. technology

they deliver possible. want focus continue safety consumers the to as of what immediate Our along Skechers to personnel is as quickly with

international working key and expanding in more. sites United our to ecommerce reach year with expanding to and markets, other this markets shops the the and world, entire Peru, Philippines new technologies and and We're our to retail retailers so and end. enhanced more Our around collaborations launching from the organization stores is in States many offering, this shops to Madrid, much

the of numerous in profitably grow we ahead, opportunities we are our With more grow can decades on other can materials, look impact we facilities expertise to As more and of business. building we efficiencies, efficiently also ways, we addressing how our our and energy including our see three developing ways thinking with lessen belts, new recycled sustainable environment. under styles with

the will by furthering sales we Skechers believe XXXX. we billion of record in are With XX XXXX toward momentum experiencing, in our we goal deliver sales

turn questions. like over Now I operator for the would the to call to

Operator

this session. question we'll question-and-answer a Our Instructions] At the Jay conducting from be comes Sol first [Operator time, UBS. of line with

question. with proceed your may You

Jay Sol

Great, guide? the guidance? when gave full thank confidence being quarter are way quarter guidance? projection question year just is conservative that you. you original you what what John, so with first raise And guidance. then you Can Is about maybe more that your much. to from Thank you about EPS talk had, second it just the And the you you of gives sort year in on the second talk different guidance? My full

John Vandemore

our China, Pacific we both across Asia COVID the robust The and pandemic. confidence derives contend shutdowns, brand from of closures, partners, our probably in what Jay. pressures those and movement they the own for Yes. retail restrictions, the really backlog. within seeing acutely the appetite The trends, seeing we're seeing and conservatism, marketplace, that frankly, across of restrictions seeing aligns Thanks, quite the called globe. And store know, the seeing we We're some for we're we're seeing everything out operating to our from the goods. the in wholesale we're region continue in most as with with but globe, we're

our What input from in net effect you're of then the Pacific of Asia China. that probably add is more kind market the Asia to would So impacting view market. conservatism seeing outside robust that's that. more in the of And I with Pacific

EPS persistently into an year a for had though, what given to we a goods in But perspective the impact top-line, we about the is And we the things than that's, we're with COVID a mentioned, and originally going waiting confidence and and how we're in some global fully why for think of that's incorporated, higher see now particular, place effect raised take We chain, and guide That's being this pricing bit, think delay Obviously, to planned. continuing continuing it, talked that of conservatism to some there, of view we freight net in of have originally, part our have up on the do costs. we early we've the of our being take get while just had brand some The robust effects supply that's year. unfold. and some the to we're gave the to those really obviously, and catch tolerating. And as unrest. pricing some in the deferred but would processed. of hold we really I in offsets expected as this high can

Jay Sol

one, it. I'll pass on then, on. Maybe just if up it can that follow Got John, I

little for China bit. a on focus to Just

impact are X% a and half back give sales? QX, have on how little mentioned downs You Can kind China that lock expect of were us happening you was in of in COVID-related are in the sense an March. some the you there in bit impacting maybe of presumably of elaborate issues the up there and what QX, that growth sales of a

John Vandemore

we that's we to saw than of guidance, that January a the effects don't a and of want with our saw in I prepared definitely into comments, we of same the as as March, say taking Yes. COVID the country to XXXX, level would China other carried though to the initial what balance very conservative we COVID not April. noted on what strong as became magnitude in not pretty into in dissimilar, effects view grappling the February weakness we're when I was increasingly and get quarter, acute, say of then expect pandemic. the

China, seen, we're is were. what things on faster, what Asia in is was China numerous And in our which, taking store and there also as should not the the recover get Now, includes, obviously note, kind of a pretty definitely hope issue. operating of our as other just Pacific, it again, particular, view growth as and to challenges better original growth a you of quarter, more I were closures, in But able for expectations well, restrictions that we're saw country given outside in one an impact. we've conservative effects

Operator

BNP Vasilescu comes line question next Our Laurent from with a of Paribas.

proceed with question. may You your

Laurent Vasilescu

really afternoon, Thank guidance? John, but do and Americas, I or new give year that I Any a you up to think don't we country very Pacific would want XQ much. Jay's How on out embedded the Asia on follow you helpful. reporting in Good very question. recognize full parse your to John at with David. level, color want and about be the EMEA of segments? guidance

John Vandemore

QX straight I an what is and in EMEA, be What again, in for thanks. the the go we on the QX, not commentary would is Laurent, probably out I country markets. say to like expectation guidance. which very Thanks, guidance, be would provided in saw what to we APAC, then similar believe you particular, just going Yes, challenges in but born in to effects regional strength certainly also anticipated strength will if is, China of Americas adjacent I although to relative

XXXX. in in what second effect, be to a for in probably would saw expect QX if recovery to were a recovery. trajectory plan more a to APAC the similar a it We We do do to So quarter. that would picture, I a paint with we be similar see significant

So we're using guidance that as bit a of post. a

our important what the still is we're market, arguably more is, observation the think second that pandemic, despite, I guidance challenges of they in taking, our experiencing guidance early would comparable probably instances what I to and to single our reaffirming EPS. up saw the largest However, draw

great we that way that is about the globe. in and the have both strong, trajectory, a and feel because growth the would more results brand performing across seeing we I think QX opportunities and we're So robust unhindered, brand better the really shown, is

conservative but being level it's a Asia are without in for Pacific, region. lot at we not a of brand performing what how outside and enthusiasm So that consumer the of the is means

Laurent Vasilescu

hot days China's year, That's for some very then, today, maybe helpful, And with now what XX can if from evolving John. from Vietnam give color disruptions? quick-quick topic. Maybe be was that in call last chain you COVID. follow would a for on we'll factory how you this the And I big see what with just issues there? provide a the GM? you're standpoint, color you a helpful. Are China. have XQ on you But seeing ports up seeing seeing a then supply Any presence Are have like and

David Weinberg

else, throughout good one's the certainly we I can or a next doing nothing above, all enough But up and see to get well we no like really down the the much be everybody significantly, ship, as gone it's a little quarter think partial has into as going Well, we changed quarter. immune. do just degree to seem

ports amount U.S. but both quicker, on the South a processing is, that's amount So and that's Europe we even greater coming in we're time. through and we're still in a And relatively significant the the good America, getting in, impacted, have news

on I the distribution even significant first with U.S., and I that out Moreno for I able out biggest all we've month We the U.S. So amount. up of mean, had. our a process ever disruptions, the kind Valley, China picking of rather was our center a surprised, which nobody's to shipping us talk than we're the thought in in had great was of domestically quarter.

can just issue of on. gives an how this you we whole that process going through that's idea So

Laurent Vasilescu

David. you, Thank

Just EPS on the guide. on a XQ

much it's which a bit you And like versus parse GMs. of just versus expectations. how it's little just John, much driven a out think about DTC by higher we supply comparing business, how should the think like if GM? tough could I the has chain

John Vandemore

freight mean, readjusted that talked I our I expectations we've we've margin kind of the as Yes. to and particular, level. stubbornly kind in gross about persistent of pressures this high the said,

of wholesale gross particular, the significantly in to component that that'll side because pressures, hampered by under seeing just in China. by, of altogether in in Keep But last we pretty the year, in being international effects performance biggest that And from things, pricing, of grown mixed substantial to margin pretty continue lift issue QX. so business. that our the that's those catching a dilution COVID. a expect us just be, lever over what is per going cause we After the the we've getting the be into wholesale margin high mind, we It's also mixed of standpoint the the course is the And sales So had our just level small. much, up. that's effect. you freight to impact you're get, big earnings is, on an on share to expect not gross year, that

Operator

Our Greenberger Stanley. Morgan line question from the comes of with Kimberly next

question. your with proceed may You

Kimberly Greenberger

Thank top-line. the brand And so a here. momentum has It's evident that in clear of the ton so you great. very Okay, much. that's

done say well on I So much And thanks just the the that. reporting. in to segment want so additional for transparency

us looks In impact at understand it's in help how could John, us much the full follow be basis year to looking magnitude points just impact that think if of margin discussion. you many could XXX great. be. understand gross what how of help headwinds the on help freight margin? QX, that And cost on up more the is basis wholesale the I helpful. with direct-to-consumer. that the or I'm And if the decline likely point you be? just impacting freight if would you extremely That maybe gross to understand wanted I can is here perhaps think might like I'm impact the than freight segments. you be wondering It why us

John Vandemore

say, far to freight into we're probably two get land And for diluting mean, gross I products. clarification, were too all the basis transportation margin, want the we first. of to don't aspects far I freight away than just other to when dissecting say costs and Yes. biggest factors points including,

to the than across the And that's I taken although of that's which has going fraction just the container seeing is, annoyance perspective. catch up. there's the more So then take And yet don't it's misconstrue want anybody then, same full pricing, did of formula haven't to just the And race, we to effect yet year. pricing, be mix from single that. biggest a we my that pricing you're

it Although, thing quarters, get when wholesale it smaller and over that prices, Keep as don't it I last advance. with has. the anybody up. think catches the course when of pricing as order mind adjusting as adjustments, of summer, price were anticipating you're stayed on would in would thought, you're middle impact, contemplating months as particularly will book, in of that have side freight we have the And smaller high stands, the

just And the anticipated. staying up. than pricing we're so anybody then much freight catching of suffering longer the higher, consequences And that

challenge catches improve side up. in business of We mentioned, we pricing expect why we know, of the on business side on approve to the you gross quarter-over-quarter the in direct-to-consumer the particular margin there. also it's have So sequentially as wholesale don't same that timing that

we year, noted to quickly. prices we last As adjust more were able much

pricing because you're not the taken And of already that we've the side of of impact benefit much effect, direct-to-consumer adjustments. so seeing as things, that

there. out So it's us helping

that some contextually answers question specificity. both the hopefully, So with

Kimberly Greenberger

great That's great. Okay, color.

this beyond or into? we point the a like help year, margin, gross any that for XXX in And you thinking sort decline be about basis then, could code of zip get should us of to an aggregator So you kick recovery? margin next sort of this pricing increases would you see year, be And full where year expect full the XXXX benefit would gross expect year a to in? would

John Vandemore

So we're to the absolutely fairly noteworthy things freight part in think I the low benefit stays a your of a side promotion. still direct-to-consumer catch mean, promotions, mind, that's And strong environment need that equal. things, pricing latter assuming the of for of question, up. kind expect keep low higher. All of to I it's on the being seeing

well margins margin time gross time, takes gross the given we I back by full as gross it'll hold. margin. get get really in that But stay an our don't China challenge we the feel at at all the the this some point, said, don't good back which those So usually first we we in as that like of to the think few that to quarters, to assuming where accretive pricing least take I course over the contributor. year effect year, of is prior can't about mentioned, get back can expect stable,

Pacific. as severe given that's time I on in passage seen quarter. something not definitely would noted what back full as not anticipate probably just So Asia and that fully this we've we've the But in the challenges in year down, the of

Kimberly Greenberger

so much. John. Thanks, to And Okay, year. we forward look great. the the Thanks monitoring throughout situation

Operator

the of from question Deutsche Our next with comes Gaby line Carbone Bank.

You may proceed question. with your

Gaby Carbone

Good afternoon. taking my Thanks much so for question.

kind prior question. So a of piggybacking off

slowdown expect the Obviously, strains to a there's consumer Americas You around in U.S. mentioned of continue. the concerns you spending in a been lot

on touch Thank U.S. just could you you. if wondering consumer. your was thoughts around So the

David Weinberg

we Yes. quite continue We and have our consumers our what throughs from as to third-party find doing own sell hear U.S. great and retailers from both well. well the we

get So right any slowdown, now, any product nor can and out. haven't we when shores we seen hits our demand, in it decrease

and thinking I But get things deliver situations it. certainly hanging we could more if there are that people So other other macro out know we about. there are currently,

to So big Historically, to April's a up basis, significantly the bias ship right continue now we it's think month very dissimilar us as we through held not month not to-date. and did on in strong And March. we'll we wholesale. for our to see is a we what certainly And this go for upside forward.

Gaby Carbone

you. thank Great,

kind you're the and up how sales. talked know, as you you've the quick about the I of growing where kind to lower SG&A line wondering just kind of kind -- term, thinking SG&A kind opportunity longer follow about with time? Just of in of do rate a of grown But see that over

David Weinberg

we've it's in past. I as the same think seen the

in geography. centers have happened we've growing over it now broader the we POS of pace a it's up prepared and as universally, some reason I and own how is think woken significant investments, doing spectrum at only brand a to the our of our strength much to to both because to because distribution said the quicker remarks, and our to we're make the well retail

So we do anticipate that continues.

there's to we of through XXXX we've As back, increase for could that from the and well growth increases distribution. a caveat, marketplace as be it commitments way to we always in for should we as to for of as coming U.S. the But we it South And with in we're we've we a is again. the of in have accounted made upgrades, us, our always get is with developing should looking some see up America, both believe China, and some into significant usual, true start the to seems hold efficiencies again pace XXXX. way the step get we're that

So caveat. that the would only be

Operator

Brian question next line comes with Our from Capital the Markets. McNamara of Berenberg

your with question. proceed may You

Brian McNamara

It share elaborate Thanks your we I'm and around you kind how moving the for did QX, buybacks should question. that buyback in is XX right. my looks All think here. price of if curious forward. taking about bucks pretty could depressed like you

should to more buybacks? how aggressive you little strong Are stock results? think investors what willing sundries the a So get and despite given about

John Vandemore

keep we mid mean, mind, the quarter. announced I of in kind buyback Yes.

and quarters we have prior of whole earnings. blackout go into we So worth didn't activity, a our

between repurchase. we advantage it's we was but will of and take market more when approach it, So to action, deficit life significant what there's -- it only that buy. can at. Otherwise, is our prices on over expect had of in long-term that be judging that sensitive, imagine frame we will then, capacity a the shares. of got much and hold the aggressive what opportunity see depressed our significant ratable But be our pretty we into reference And to announced -- fair again, say, so time you market both to keeping some what for what of can I'd is the is value value find the after is showing market a like eye trading given market what near-term. light against are today, readable we're only kind we we we shock, capacity be we We'll value, be I in any the in sure the the definitely of point the disconnect feel the can what and where think And currently. deployment, shares trading to then to able of a were think happy it to premium won't is but there's you feel at also I'm

Brian McNamara

Thanks.

a guesses a disclosures. drives we've or that in decision, there's on really kind war discussion the exposures you've marketplace there? Eastern your drove discussion that of I'm Just longer-term that. Russia, your enhanced as in what the that and Europe over think applaud terms decision a lot of this follow quick kind had longer-term of curious, a geographic had a the to I over up the of years? and Ukraine, likelihood I

John Vandemore

something all Look not of a you change that's of lot can lot imagine, and of easily, pre-work a at requires we've as a really, lot effort. And you made it once. changes

amount work segments the Ultimately, comes across the fairly we but by change significant like run it a a here. So in reflect is simple of we team these reporting of how a business. as feel reflection

terms you from performing question certain how it's with enhanced we analyze make business we all, receive in think business investors often in reporting, about how they align, the the a the decisions is So we of better regions. the business,

some think, our in we visible felt fuller old the a important. So appreciation of to for it giving be reporting be the that was regional context going And helpful. direct-to-consumer that's as something structure. thought we adding also needed was to wasn't I business as And then quite magnitude

the our brands. So segment was we how to greater include strength our of being is said, our our obviously able worldwide. then good the And performing leads receptivity including our of businesses, hope Obviously, about framework it's very receiving the in we brand and is ventures, that as to reporting totality the important. feel joint that transparency to

can anything stakeholders So effort. provide more felt to other we to we strength that into do the and visibility was help you worth

Operator

of Our question line comes with Omar next Saad Evercore. to

with your You may proceed question.

Omar Saad

on you macro and your the ups. Thanks all Appreciate talked someone the for your A follow and some of Number in early heard there's guidance about I taking one, thought factors -- the conservatism I question. affecting insight say couple my outlook. when information.

the around appreciate losing? that a thought up others sell think with I are wholesale of or little process the could signs and consumer. Are and then going it channel. signs that are accompanied seeing also if I'm restocking the and is give stocking and a channels big I certain of mentioned you maybe inflation your hitting acceleration. Thanks. lot guys wholesale sure bit wholesale of is some consumer? number of you And from the to any pressures you winning Is there of pressures on that are would a that accounts more through

John Vandemore

the reiterate. an As inflation mentioned as something just David on, comment, far keeping as noting would we're that it's and eye we're I

We spending David have ISPs for consumer strong very and we're seeing through Because wholesale sales, seen sell strong pullback to discretionary boot. significant mentioned, but in not yet any high our both, customer.

did impacting business. on note while it. we've already and something the it's our haven't we're overall, So, We that's anything impacting how cognizant transportation of we commented consumer, inflationary the And seen pressures costs. on

address. points, would kind So those of are inflationary I the two

of I in simply process all think, and from to the perspective, receive ability wholesale was part goods a it honesty, goods. Omar

fantastic did once in we've And Our than chain to job goods process a team receipt more some of supply March. pretty against circumstances. in ever challenging

issues. robust restocking, very through the allowed that feel see get continue going there through we to we rates. process hadn't way in to to us is because the sell chain in -- and to ability wholesale in goods sell doesn't perspective prior the partners capability quarters the in supply just on, my is, like of So our although a because It it clearly some restocking doesn't

can if sell shelves. stores. throughs strong at you're itself consumer get level the seeing even onto also we own our retail so it is a Really and through something restocking whatever And that's effort, the in to see we

So anything else. overall, for it perspective. product the my more I demand characterize than wouldn't But consumer that's robust as

Omar Saad

you it. lower And really quickly of say touch is Got that kind on, you higher of That's maybe ASP could how of did XX% John. much retails increases markdown? versus helpful, that

John Vandemore

said previously thing so with is we've I associated it say obviously promotional precision, the far, we it of is And temperature a to what which same relatively more a probably a we're there's is something subdued. seems but the standpoint but insignificant competitive environment, with to globally majority believe watching tell Tough favorable not component of would is, from pricing. promotional be degree to of see what any activity the

Operator

Our the with Poser of next from Sam question line comes Williams Trading.

may You question. with proceed your

Sam Poser

us you we greater? And details us quarter to there, margin basis the you gave mean, you more gross gross a QX. some you. versus can for then give And and I've the give at the us detailed difference margin a Thank Thank of more year? detailed prior my the I got be use year, for for or should where can it housekeeping. count just I've you then the QX, question. few questions. least share that points full questions. both think just what got on us sort do expect then two -- taking the give stuff And One, the is for like, more you you

John Vandemore

just our factors to give including it first likely quarter what be business than because was it's of in We the precise to more year. a second mind mix. quarter the what in Yes. it keeping to I last closer last year, direct-to-consumer. margin in indexed in gross a note, over don't in guidance for business, we it Again, was would the unfolds certainly like part, on depends reason, as

So we've freight mixed seen across including wholesale, obviously, there's growth some the business, just continuing by down the virtue challenges. also, of but effect, the

I quarter So also this toward anything issue that elevated. where cost else. more with But dealing year you than a was we're were it's we note persistent last point because

fair don't I direct where would any like would the I plans value. because we repurchase current relative that you probably trades perception moment, the on count. the have against using said, advance We the of to share it precise towards share depends in For our market

other update activity. other count at then, share year our as on guidance give throughout on I So you we actual based will where repurchase any we're progress currently. the And that than wouldn't we

Sam Poser

you you're clarification, talking points about talking sort in a talking or in are in of a the being in year-over-year just you're range, not similar, basis And like change? by down XX.X about similar

John Vandemore

year. quarter this clear, quarter what Just of is closer improvement to second I the where we be We do than to last quarter-over-quarter. though, said expect were

are as sequential and So of take that hold. improvement a more more for we looking pricing

Sam Poser

April U.S. March? quarter. the ship expect you wholesale any business, did as, we so q Were -- secondly, go that on more really two orders others? you second with the then, the probably chain, your quarter big what as one to in in And in as than the some than to -- deliver products there hands, in quite just you efficiently scenes the got details probably a things, QX sort won't in quarter? you was then, given supply you allowed efficiently behind number -- moved much of And of more on another others domestic forward can into was how more Okay. has into Or wholesale more

David Weinberg

than to in people as United anything the a still And the And up. everywhere would answer back no. still catch up. from going Because faster think have catching demand, stronger move we're be, probably go up to I pace. at the the into trying to didn't especially to We're We Well, most first, Europe regionally, but as that significantly well. is APAC believed, quarter. in probably go would you States, probably

amount significant we any haven't forward. pulled So

those that for to trying secret we'd But significant what we continue listening we As our public and by come and people before I for sell But a I amount it's I'm people. our the is well to as sauce if the said, with call, April. with in we domestically. deliver. have with It's to And this do came to large, to well. that, ship as guess, up

very in get to best that that close time, possible the the we've to Our people significantly been with work of that and themselves our people all factories that results world we period around are a can. very the Asia work factories for together long

Operator

comes from Nikic Wedbush. the of last Tom Our question with line

your question. with You may proceed

Unidentified Analyst

my taking [indiscernible] here question. Tom, thanks on for for

believe shopping Skechers just down all? by as know in standard inflation, quickly, higher of been moving just not brands has could strong. demand demand terms people to So you Do you to at from price said I be opposed point helped

David Weinberg

it's And I the into do I technologies fall quality I strength think match that We us lot real lifestyle. may But category. is twofold. putting people product the that of think some think to our we're would the a have and the into footwear put there.

I creating and think on we're not demand basis, comparative itself product price basis a on for only [ph]. the a [read-on] a

that's both on the equation. get what that And world you're worlds. space around we pick of So sides up the I as think seeing we best both of

Operator

today's Ladies and today's does conference. have question-and-answer we reached the This end of conclude session. gentlemen,

you the participation You at this and your for lines your enjoy may your Thank rest disconnect time. of day.

Skechers U.S.A. (SKX) 27 Apr 222022 Q1 Earnings call transcript