Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to Skechers Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to Skechers. you. Thank

begin. may You

Shannon Butler

name for Butler conference joining My team. call the Thank you us is everyone. from Shannon FP&A today. Hello, on Skechers

statements or limitation, and now herein, expectations plans, involve of will read risks or Safe uncertainties. constitute or statement. I future forward-looking company results that the objectives, estimates including, may addressing statements Certain without the the events beliefs, Harbor contained statements

business national and risks, unknown conditions, Such and forward-looking supply specifically and but apply the and limited of local, to, known chain as general economic, fluctuations, with to impact statements the retail including, global, currency Russia's market company. not including and delays foreign and Ukraine industry in they involve inflation, disruptions war and the

actual quarterly significant the affect the Commission, future any filings forward-looking the that assurance with results, implied or statements review U.S. expressed occur. no on Exchange financial results annual be our for are with Securities can X-K of filed cash current all including XX-Q, required and that reports factors operations. Users all of Form reports achievements business, flows report reports Form by SEC of company's other on most the statements recent or federal forward-looking description on will of to performance securities encouraged other There a as by the laws company's risk may the and XX-K, conditions, and Form

Vandemore. call like the and Operating to over would Financial David With turn Chief David? Skechers' I John to Weinberg; that, Officer, Officer, Chief

David Weinberg

quarter today joining conference for second call. us you Thank XXXX our on

results in growth on direct-to-consumer and gross billion sales new a segment, double the XX% Our focus margin gain with record our results a to expectations of our throughout These XX.X%. due X.XX business. and are innovation internationally, digit of exceeded

Through to we in our and new continue deliver consumer expanding and the on we comfort, footwear looks our and comfort brand a while technologies, on we creating world, As to every family. innovation go-to the price. reasonable for collection, offering entire our footwear our takes serve proven the engaged continue of sellers, loyal base for demographics. consistently source be style, largest tenants By at quality expanding collaborations, athletic new to the third reach fresh and design

moment would to their enables partner global and congratulate only our like I Fortune to take XXX, dedication but a employee and belongs to an to that join expertise, acknowledge honor team the Skechers which every and not consumer. every

our collections, In band in slip-ins, rock Hands building further successful on collaborations addition performance with notably offerings, during Arch we launched successfully and and Skechers demand walking Free Skechers and Stones. legendary Skechers quarter, our the and UNO to Fit Rolling most the The several

first across The on out in official women's logo Street men's stores the in collection other iconic Carnaby and hit at store and and Europe band's featuring America, rolling before London markets. North their

last the Just ambassador Ride. with of fashion-forward the collaboration movie edition week, Joy on of footwear. hit limited summer heels our came Skechers of release we a for Ashley This a capsule also launched Park

more We over the XXXX. plans remainder to launch collaborations of have exciting

namesake talent with Doja relatable marketing in and notable Stewart appearing campaigns, of team diverse a including others. collection, entertainer have and Martha our among Dogg, We Skechers Snoop Cat singer

Bollywood that Leboeuf locally, footballers Redknapp, India. including signed Jamie and Sanon resonate ambassadors also have European and for We regional Frank Kriti actress

Skechers and We of and performance pickleball pros golfers, runners, also have elite an in training footwear. team competing

Skechers to comfort technology make and products and to and we as people view our the experience accomplishments Throughout innovative to they our brand demand importantly, want are most need seamless. to an opportunity shoppers with offer marketing the shopping and awareness more and our educate their features to brand products. build activations to for efforts elevate company, consumers Skechers Our wherever connect they drive on technologies the

more impactful efficient, even always, As manner. operate the is sustainable, goal and and an to grow

helped I segments, of build our long-term we completed distributor. would Before note the in our They quarter, to like brand with the Scandinavia Norway. acquisition team customers and of Finland, the successfully discuss a and We wholesale Sweden, across Sports the stores region to Skechers our Denmark, Nordic Connection growing and business important the I that and market. e-commerce welcome look in broadening and further this platforms network reach forward

record driven XX% on segment, EMEA, in our APAC of results. XX% in in second at in billion, XX% a in represented our XX% sales we and XX% increase XX% Spain, in and These the X% total global X% constant in quarter an including were China, increase our XX% X.XX XX% currency in the India. Looking achieved year-over-year and Germany, by in Skechers a grew XX% sales nearly which of basis. direct-to-consumer of quarter. Regionally, UK, results

Americas in the down. were Sales slightly

of As States. the United issues in domestic offset our challenges nearly were and wholesale outside expected, The direct-to-consumer decrease continued strength many wholesale domestic by was due partners. inventory-related improvements to impacting wholesale

difficult we it a to quarter last noting grew where comparison strong addition, is faced particularly worth In year that XX%. we a

almost X%, price grew strength in XX%, APAC in selling robust saw year every as including increasing business, wholesale the made wholesale the We grew from decreased Overall, growth due our China, India, unit business the Germany, XX% Americas XX%, Regionally, decreased in Spain. domestic average market. last and XX%. X% to grew volume XX% The United challenges, previously and international noted we unit primarily wholesale per EMEA increased adjustments excluding and pricing but grew States.

includes international XX% in-store strong our creation demand XX% for markets. in EMEA. of volume increased APAC, and selling balanced in direct-to-consumer. total, product evenly increased to to price led average and Turning improved comfort XX% and XX% availability This the In domestic XX% growth, unit demand direct-to-consumer effective Americas, X%. footwear, growth technology The in between and

included to and which we big Vietnam. the closed in franchise the stores and opened from quarter, China, States eight three each Chile in stores openings in eight In Skechers of XX second XX and XX. transferred company-owned; Store box company-owned United

from Scandinavian distributor. in our of the Skechers countries four Additionally, we in Nordic added XX two acquisition stores and stores Germany

ended in of quarter, Skechers X,XXX India, quarter the to-date, States worldwide, which X,XXX XXX in the in eight which were third XXX stores In United were and third with in second stores, of Chile. stores which company-owned quarter and the have we and party We China, we Philippines. opened one in in nine included the two the the opened each Colombia

expect and We balance XXX the XX the between stores open to year. worldwide over company-owned of

intent in streaming on emphasize publications, initiatives, athletes campaigns on top ambassadors features to in personalized continue and through targeted Skechers increase technology and be our awareness our remains of media, many We purchase content. of ensuring engaged driving mind and marketing social memorable products, through with comfort and it digital platforms, networks and the

demand Efficiently meeting is consumer growth. essential to our

stores, significant and improving have centers, inventory distribution made in our our particularly through We investments levels, inventory times at fresh and North flowing are our our American center. are delivery distribution retail

in begin of begun our We expect new distribution our center out shipping the and Canada to and year. India out of new of the shipping in before end facilities have already Chile

And the now, on call to more like would over details for John our turn to I financial results.

John Vandemore

and momentum another broad-based quarterly the performance, record David, driving good reflecting everyone. operating strength strategy. our billion. of in saw financial growth over of sales strong and across and continued quarter you, Thank sustained execution geographies X Skechers direct-to-consumer We long-term our delivered segment, afternoon,

exceeded increase resonate believe globally. of highlight line top of that the to expectations. X% high consumers despite an our both of product strength stylish, and diverse our assortment which, our the with continues We in wholesale and anticipated reasonably our and represents This results these business, priced year-over-year, bottom domestic appeal headwinds comfortable, brand our quality, that

impacts we region. the price transaction quarter expect second our the close, quarter, to comparable the prior We distributor. of continue the slightly sales This touch with this the transaction forward the the look results, of May turning team more Before year, acquisition working closely previously end accounting. to brand of of our on to be Nordic the in let given timing to distributor do year, Scandinavia no and but growing impact at had the and closed the announced our to the accretive earnings material Skechers Scandinavia me in the on to purchase

results. internationally. second to billion, offset decreased quarter partially review X% sales Now let's to due Wholesale decline our domestically, by increase financial XX% a XX% X.XX year-over-year a

we expectation benefiting our wholesale the expected significantly to our the domestic due quarter. partners to impact most of in guidance As quarter, quarter. part materialized, in though at orders better expected in That shift than wholesale were domestic timing in indicated inventory second congestion us actually a the last sales the second

digit International by XX% growth sales growth in APAC EMEA strength driven XXX.X sales year-over-year grew Direct-to-consumer representing nearly double to with markets. XX% quarter. many the for of sales across wholesale total million, and continued was

robust availability channels double demand in an complemented resident performance of increase Our by consumer stores internationally, in growth further stimulated demonstrate our and results demand. improved driven the market. XX% inventory technology by digit comfort every our These that the nearly across products, and domestically, for was marketing campaigns XX%

to our sales. we faced in turning sales to decreased domestic the for believe the a second Now regional X% challenges remarkable Americas, we marketplace. is which given billion, year-over-year the X.XX quarter the achievement wholesale In

year-over-year, driven the business. by our Excluding U.S. primarily wholesale, Americas grew in direct-to-consumer XX% strength

our the our In particular in XXX.X led business. in most for double XX% double growth million, million, growth wholesale direct-to-consumer driven strength sales region Sales increased demand grew digit in year-over-year EMEA, year-over-year countries. we countries with in and APAC, XX% by both across In continue to XXX.X direct-to-consumer digit to our most robust product see to segments. by

continue China, growth In XX%, there stores, by with of recovery sales and our double both strength driven evidence retail owned across digit see franchised. channels, to we in and increased particular

by our optimistic excited about growth encouraged cautiously opportunities recovery. and the are in market. the brand in we are we China term, We improved for the the about trends seeing near-term are remain Longer

compared higher pricing XX.X%, as made by wholesale year. our margins mix the a annualization volume segment. prior basis favorable adjustments was last up direct-to-consumer year driven Second to of XXX a quarter in reached of points gross the The as improvement record well

costs XX.X% basis a XXX we investments as year-over-year and of expenses globe. Selling a driving to into as higher increased XX.X% the of sales XX percentage basis creation Skechers portion awareness volume-related consumer a expenses Free sales demand percentage leaned technology. for Hands focused as Operating due absorbed marketing increased points X.X%, across primarily our slip-ins significant were points which on of year-over-year new to to expenditures, from

rent points to our distribution expenses to basis of XXX a labor, international increased markets. and volume-driven segment direct-to-consumer administrative primarily costs XX.X%. were support The expenses our due growth higher year-over-year as and percentage to and increased General within sales

the million, increase our the to Earnings for compared the compared operating margin and year. prior to from operations year, were XXX.X prior XX.X% quarter in was XX.X% a X.X%

quarter prior were shares per $X.XX tax the diluted in year, compared XX.X% reflecting effective XX.X% the diluted million discrete for beneficial per on several second share recognition the to share a was items rate of in Earnings Our the XX% quarter. outstanding, increase. XXX.X

sheet. balance our billion, ended the XXX.X quarter of cash equivalents, and was to X.XX XX, X% or compared XX.X to prior June turning now with an We increase of from decrease million investments, And million cash, XXXX. X.XX in billion XX.X% or a the year. Inventory

However, demand and versus consumer XX% healthy declined December back-to-school positioned both million critical continue in the holiday innovative and and well over products meet selling the inventories are $XXX of and XX, periods. to or XXXX, introduction

to at million, of were offices. reflecting XXX.X of quarter to million XX.X an half technologies, sales investments were construction retail globally, year, the prior the wholesale receivable infrastructure XX.X quarter and our for higher related million, end our expansion Accounts XX.X the was quarter. of million direct-to-consumer to corporate Capital XX in compared distribution our the of back of the million and to expenditures the related increase XX.X stores in new related which million

Our globally. expanding presence brand direct-to-consumer our and supporting are strategic business, our growing on capital focused our investments priorities,

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

deploy We our continue stated philosophy. with to our capital consistent

guidance. to turning now And

of partners While demand wholesale and robust about brand with factors, remain recovery pace China, these remainder including and around shape we several our balance strong cautious uncertainties outlook continue the and the attempts globally, headwinds markets, and expectations several to in year. in Accordingly, the ambiguity ongoing remain, the our see disconcerting for macroeconomic of to we consumer momentum some trends.

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

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

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

markets and expanding million expect we to capital We and for our XXX priorities, XXX expenditures year like total capabilities, between the adding Chile. continue strategic key invest in and China, as our opening distribution omni-channel in million India, be incremental additional including capacity to stores,

our to our all in-store differentiated execute of to brand value our consumers direct-to-consumer growing business, made product that growing the expanding long-term in of confident online, and and presence sales to our portfolio we globe. continue remain XX is continues We as and both XXXX delight possible our billion strategy by which on proposition attractive around by globally,

we XX. We for turn thank on third now call over results, our With time that, today, all expect look you to your of forward which to on to and Thursday, October you for the we release David quarter updating will I closing remarks. financial

David Weinberg

Thank you, John.

are the collaboration brand and UNO. Skechers We the robust build strong direct-to-consumer products, especially margin, Hands demand motivated was XXX, for join footwear Free exceptional, quarter XX.X% launches from with our to proud our by Park Ashley the comfort Stones and gross the our The most surrounding results buzz to within the record slip-ins Skechers global Fortune to momentum. business, to technology our our excited Rolling our marketing recent and

Skechers defines no the footwear need. matter comfort

the elite occupational of court people are lifestyle that for casual activities, industry on for and again all record walks Skechers of for work footwear the or the source athletes this those is life. golf truly once for office or We all course, go-to in flying in the summer, number for an pickleball

quality improving As line. always, efficiencies, growing and innovation opportunities delivering our style, focused with on across new we are and our business product comfort, entire our efforts, scaling

in quarter, We toward for to another XX XXXX. thankful forward entire are we're annual the Skechers planned sales together organization looking goal of to by successful billion our working and

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

Operator

you. Thank

will be a now session. We question-and-answer Instructions]. [Operator conducting

Please question comes with UBS. first Sole Our ahead. Jay go from

Jay Sole

Thank much. Great. you so

bit e-commerce sales grew how XX%. So stores? about direct-to-consumer ask maybe little I about And were Maybe want and which quarter, to in the maybe us much the up tell a be like and How was different? us you between How up the can so help slower. Americas, XX% differential trends the explain that? wholesale where just were understand obviously, do it the

John Vandemore

saw key What domestically tell is in and is a performance Well, question stores. we the well. you thanks, have anchored demand in seeing. better significantly comfort as a They're product-driven direct-to-consumer was internationally our it looking Jay. traffic, markets. products. That about Consumers the is I are coming the really can that units. store. We grew better both It we're think into conversion, for both better I technology E-comm

but the they those that from really a Internationally, up slightly was attributes. smaller we our base. markets stage Ultimately, Obviously, I think the Just of development to was the it each more, that's thrilled benefit realize our the Net-net inventory. need. the stores don't they advantage. whatever demand I store, that's take else. that find with we're And portfolio. I into consumers be of clearly, driving robust particularly to the And what's lot able to we're thrilled probably in And the mentioned. product said stores as significantly. comments, features a at have it's that's were technology think in that consumer activated there. the but up the new prefer. everywhere e-commerce the and us, They case grown different is comfort spend domestically. It think of product channel when the want a starting we give is most right product is able have consumers anchor double that's to them digits, creation have in again that the distribution for it But We're to they product new are seeing for

David Weinberg

of I as goods, a domestic the it comp things things last shipped although factories. a I'd we a Jay, to wholesale into stores. very just had we if of to goods issue to point while last is how longer can, like the far took We out, it When We point happen. our to as these like year differential timing get from of same had we concerned, lot received a lot had year. had the tough

year the compared if at pandemic basically, our So volume us seeing quarter down would what end the that last over you're to to the at show we the and year. as their deinventoried and factories, time, multiple the last of were all a backup since look getting to after you of was months because they

of them, They is comps our same were a that those for the U.S. true for lot in They've distributors. taken for the tougher see out. think customers. we they That's and our to inventory. when we Europe you it now full, and true I a some showing booked lot stores sold sold deinventory our of increased that our not sales. when and customers And are of while they're

we have didn't to getting in consumer. stuff it a big with take it differential the it if a early, about and out that up took bang we or getting to So year you those last store because worry ended to shipped timing,

now, Ourselves new. some stores throughout we Xx, week, turn We are like deliver it it fresh. They John to are getting the most They efficient. over in. week, we're we every And said, are, Xx. the our Xx,

of more also boat. some as which the first And are the or they clean the their of inventories, normal the next we'll by year. a in to receipts, think what I is get pick hope to out our of up end start quarter customers, in I they'll distributors the year same

Jay Sole

Got it, you okay. Thank so much.

Operator

comes question Paribas. Please Vasilescu Laurent go with Next ahead. from BNP

Laurent Vasilescu

wholesale. I David. you, about you, Thank you what know, talk can bit my seeing maybe for to much you're John. taking John, a Thank was little question. you if curious very in Thank domestic

think you in seeing the that in days an XX channel I wholesale marketplace? about U.S. ago, inflection. your talked you're Is what

John Vandemore

that's on some thought. that orders we which marketplace. of toughest It's had a I'd there active challenging this for quarter, got up, our sell-through we We in that the we said perspective. point mentioned that less reflects from domestic the believe to than were expected out be product quarter last actually Well, first core us pulled out as some David mentioned we wholesale the

a have certainly little of a although is aspire the the seen into It bit. year in shift does active that, a QX challenging is little continued a sell-through that we're would we DTC. is not the XX% in backend of seeing, way, optimistic less seeing we're rebalance you're it clearly than It what consumer we what to we've demand benefit what expected. bit to. So Look, and

increased was only the have I You're would to In lead seeing would wholesale front accounts, will challenging. is to and on we're believe reorder will timing say it most on we I challenging something certain QX movement the an pace. more lately. still in the been caveat most say seeing retrospect, domestic that

could pocket But of guidance. QX. half we or it a is, how in starting things anticipated some create we're pleased is the that for there. So optimistic again our overall, came shifts timing being what here nothing may although the around, that of to out although that we definitely, cautiously with currently are And year, turn like back see

Laurent Vasilescu

Very helpful. can the impressive. be And you continues talk maybe to margin -- about gross very

think I John, freight was to do think, basis you. become see me, next to a that but Thank over quarters? benefit? you would a you helpful. that the I all freight bit year's margin. recapture And gross least four little freight last very of at XXX remind anticipate of point Did a color to on headwind start be Any

John Vandemore

Well, I'd to quarter. direct-to-consumer XX% big we margin nearly this first was benefit gross were reiterate the

of that pricing, So say system. also fully per we some to didn't there in see you A domestic available clearly quarter. wholesale bit I I'd finally think was terrific. materialize pricing more increased slightly mix shipping cost come earnings, though, we technology through annualized into of a starting there was into previously flow there. do some the do comfort as you a think unit. also, are particular, discussed an down. sell international wholesale But but because products, benefit in pickup to the offset rates, our the rather changes It that see is saw which significant got this I

charge so to more We're for able more we're able deliver to offsets. to the consumer, that. Now value it

pricing the where the year-over-year love foresee continue continue I we'd that year, than up bit it basis. about more run as should would a to like But But nothing expect than improvement in rate little well. to be gross the back year. for year in masking say there's will year-over-year the and the be be balance see effect margins is We'd think to the last shipping a in mix the to domestic particular, so we quarter-over-quarter, because So better there. than improvement what margin catch in of last on we better better that wholesale, to we QX QX than be will a of

Laurent Vasilescu

best and much very of you Thank helpful. luck. Very

John Vandemore

Thanks, Laurent.

Operator

Please from question Carbone comes ahead. Bank. Deutsche Gaby Next with go

Gaby Carbone

afternoon on the results. and strong Good congrats

just margins do the like EBIT XXXX us you'll So Seems you margins? pathway long-term expand you biggest this would think help where the get beyond the margin to business? about bigger picture, year. see opportunities back But for that, to within

John Vandemore

our the direct-to-consumer international First of It's trajectory our and all, thanks, Gaby. growth continued businesses. of

Obviously, of longer brand but time, As we've to said then opportunities within always that's margin billion the algorithm XX countinents for the for it create a operating for bit numbers really what growing are invest to takes that both the be the is to long tailwind there beyond and to little term expenses and that. us margin. [ph] a gross grow going leverage, to a against for operating

emphasis longer two term. to some So leverage with expenses opportunity operating is first say, again, I'd for continued potential key avenues growth upside in the those us

Gaby Carbone

are to a up. it. quick introduced be mentioned that follow your later developing new helpful. categories Got you're And In that just release, this That's year. press you going

on if elaborate wondering Just could that? you

David Weinberg

much far an to Probably notice not. it. get big something where be and to get where something everybody find try idea We where we're to too or look too certainly ahead careful to give planning not to of

secure we're some in think launches. all I

we are believe view. of everybody get them and shortly to you'll in competitive and see I not announce position know we're But them yet ready from and a as forward ready a go they them You'll nor happen. point

Gaby Carbone

much. so Thank understood. Yes, you

John Vandemore

Thanks, Gaby.

Operator

ahead. comes from and Company. with John Cowen go question Next Please Kernan

John Kernan

Excellent. Thanks question. for taking my

on congrats quarter. the great So

talk business. some to in Obviously, the is momentum also great. high million, full upside line end the what was It flow The you high too. It's like quite just well. financially beat in have expectations. up You for of how was John, of surprised operating the area the guide have $XXX year was And obviously you the seems profit as just a function an the most, sales which your to upside. there sales you of quarter? through the to much margin about Can guidance a follow gross by

John Vandemore

Well, would know I let into direct-to-consumer surprise we're don't growth it XX%. per guidance. rate contextualize The outdistanced extraordinary the me seeing to a But that se. hard nearly continued in business this our characterize I put within strength prior certainly the as a prior It's guidance. guidance

that feel seen trends. we said, it. Now strong the have being we had We for like product

So would we and wisdom been great, know which fully that I guidance. into that it continue, but were optimistic the don't putting that was it did, have would

So best great, a And the inventory a that is did decline, accelerated domestic I which the doing China to others in are stock and sizes leads we're full was in And forward, we product. on I that wholesale, kind our nearly result from to want this a of new the really that know in saw, to little in that change activity in a back, consumer than say activity outdistanced was thought. the what is quarter, is that customers go came our a XX% perspective starts for ourselves -- XX% would other really that bit great we again, definitely from our for perspective, some with again, mixed is quarter in hope to We guidance. a sell-through balance driven China. the but don't own that in well but than with it's even log then healthier behavior way our accounts some us retail. being product an of better because indicate growing take

were all those So positive surprises.

Of never course, good get just you news.

our dealt some bit that not results definitely there were net of going was -- But material. about talk effect it overall, that we're exceeded weren't say little they we a challenges to with that here the I'd of there expectations. So because

John Kernan

within I moving and $X.XX keep guess Thanks. balance talk and at helpful. then of to expenses $X.XX to with also maybe to And marketing pace. creation demand guidance, line the the margin this top takes That's very the between and puts some EPS the gross

John Vandemore

Yes. to comping getting of where I thing the year. would say stronger we're to going is a I against the results point note some from think one we're to the year, balance last start

If of gross you the The you back kind of the got curvature, will, year the half that margin first half the of was last remember was year, if bad. of year better.

of simply -- be we a last from pricing some think favorable benefits So have that because fully We've though. now won't perspective. as comparability as cost still annualized the Clearly, detrimental. coming wasn't we year

business, more mix. to And margin, detrimental toward would objective. wholesale growth earnings more eye quarter we'll gross So that will one a but in We offset. our to could each kind and be effect spot We improvement The keep favorably leads that on which is, did that to again relative ultimate with obviously resting our for because going in shareholders. net mix. feel take like good the of an prior we're see is it gross again, in dollars, of that potentially we forward year. The obviously tilt thing that's our profit to

a -- there's more and will So just say becomes make of We're of being holiday back-to-school. would about prior a against we fully result are there's clear the get I year lot bit better. optimistic normal always optimistic period. noise. a we're I of thing started about comparability The the is still would COVID, that though, smaller delta note, that going compared one not just But to the forward as a little that

that a with sense and stores how much resolved that. that issue last a of a lot $XXX on were of we in with resolved our of We last to and also deal products. on-hand year, if that's And had you in it. focused gives are end had we you position much we depth at are been where versus the year. of the in just which inventory, generally the than We're so today had December, not nearly down we But stock of currently trimmer recall we a right stores, year lot inventory obviously, and million we're

So the is third the of part in particularly of little think fourth. we tailwind, the bit do that early quarter a and a into continuing

John Kernan

on Congrats great. all That's the you. success. Thank

John Vandemore

Thanks, John.

Operator

Next from ahead. Nikic Securities. Please go question comes Wedbush Tom with

Tom Nikic

there question. levels other wanted for Thanks. the do Thanks you inventory look some overhangs the on guys. of have wholesale. up Hi, brands that any How follow have the of at I inventory taking channel? wholesale out for sense alleviate? for U.S. of gotten your to brand my started some And domestic to

John Vandemore

say XX, inventories would into top kind of good. our XX markets, we at wholesale looked pretty when domestic inventories customers look I in Yes. top

bit In little argue would want them we fact, be. probably leaner to than I a

think And for sell-through we well tees so driven strong up that reorders.

Now the inventory that bigger brand with beyond again, dealing and that, they're we of challenges. one Skechers the has been extended believe, issues

Although every I it's not just customer. would note,

there some to We have who doing improvement in And quarter. are of out led wholesale customers what our second results the relative fantastic. to that's

don't inventories well. What is in how to doesn't significant demand the know of be that There them long product I is do those congestion our look, it they're whatever in any certainly know and So, to experiencing. key our backup accounts. totality to will selling take deal we with appear

clear factors -- The good. of tee for that challenges they're And pricing so well think acceleration they're we once an of and reorders up whatever experiencing. is

Tom Nikic

could If it. I Got up. just follow

a we bit it the to should to assume be than wholesale first for take wholesale still I think lesser that to safe but getting Is And calls, would year. you of your longer in get little flat drive back U.S. hope it down to end John, assume a you U.S. the the is the that towards of XH or couple said will half? that to would last on extent point?

John Vandemore

Well, and certainly some want in we I as as that's taken. we've prejudge for we seeing say, the possibilities. market, I concerned, we to position the as think prime out mentioned, is But stimulating demand the forward currently our guidance our healthy what the reorder would range guidance, look we're situation I we're although is early consumer don't of just insofar when the considered again, activity. that's expecting, there

Tom Nikic

year. second of Best the Thanks, half luck the John. in Understood. David. of Thanks,

John Vandemore

Tom. Thanks,

Operator

Abbie from go Sandler. Piper comes with question next ahead. Zvejnieks Please The

Abbie Zvejnieks

was congestion Great. any you. Europe. for in of what markets, And if promotions? terms seeing are the Thanks terms are you're you my you dynamics taking international of then seeing of in same the of second, any just particularly question. in wondering -- Thank inventory I

David Weinberg

not cleaning the there as sell-through the even in well. magnitude the we're the to are continue internationally, maybe the end doing and that through than states States, order very still the and probably top states inventory. of EMEA, be in so more exist. but customers performs same here the brand But have in the as we things Well, it's And while better at rates

QX. to starting of into certainly a see and influx we better we're bigger So to the year get of end the and looking orders as

As varies concerned. would geography. that Europe the far you I better world, geography the as U.S. to say or sell-throughs it around is are to slightly go place from as place than those shaped

direct-to-consumer. better for Central is a South America, go America. picking if having us, as from in in does it yet. much strong bag. is out a holds Chile America, Mexico In Canada. us for you trouble is up true Colombia, business Same Central it's market cleaning are Their Peru little and wholesale a down mixed

have customers We significantly out. direct-to-consumer have cleaning still a wholesale of number better and

concerned, they're good China a them pickup, as started inventory back good direct-to-consumer They which is far QX. a looking piece was They're is earlier. in as line. had getting far are wholesale. They concerned. as big bigger than for They very As in

well forward. as we So that bodes go

John Vandemore

say as still would Insofar I actually it's stable. promotions, pretty

promotions to in store look they shop. into consumers and the in-store perspective, we of year, to bit our motivate stable. quarter, started continues from little recall, last the maybe again, If a the come you but sporadically, work, particular, in And kind introduce to before current

what And to we so doing do. wanted it's exactly

Abbie Zvejnieks

Great. you. Thank

Operator

questions there today's Since at time, no this teleconference. further are this concludes

You a may great day. disconnect your Thank lines and participation, this you time. have for at your

Skechers U.S.A. (SKX) 28 Jul 232023 Q2 Earnings call transcript