SKX - Earnings call 4 2023 | Skechers U.S.A., Inc.

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Operator

Greetings, and welcome to Skechers Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to Skechers. Thank you.

You may begin.

Unknown Executive

everyone. Hello, [ from is FP&A Johan Rob name the ] team. My Skechers for today. joining you conference us Thank on call I will now read the safe harbor statement. herein, currency the estimates risks, of not in including supply national the consumer insight uncertainties. Such company. conflicts conditions, forward-looking Certain fluctuations, market apply beliefs, including, foreign forward-looking statements United Acts challenging and or general but markets contained inflation, including, Wars, around involve risks statements and constitute local limitation, they the as and statements War, and to involve addressing the events plans, in may disruptions business objectives, global, or specifically chain delays and known retail retail of or the limited company of and other and statements to, that expectations the economic, future results States, without the world and and industry unknown actual or forward-looking performance occur. Users review no can results, are encouraged U.S. filings or that the our of future any to company's expressed the with achievements statements forward-looking by statements the There assurance of be will implied and including with Commission, required federal Exchange Form the Form all of securities factors may of and business, report for risk on that results recent flows reports current most operations. quarterly as affect reports company's and Securities on on Form conditions, XX-Q other all description a X-K the reports annual SEC filed XX-K, the laws by cash other significant financial to Chief and Financial Chief that, Vandemore. I to Weinberg; David With Operating Officer, Officer, call like the Skecher's would turn John over David?

David Weinberg

result the $XXX to billion, four billion XXXX record fourth quarterly fourth records, our conference for $X.XX for an new annual $X the the year sales and sales of last milestone full thank increase year you quarter a quarter. for afternoon, today Good was This compared of with us call. including year. million We ended of and joining

worldwide by results hard demand our innovative These cultivated our annual of and also marketing margin We throughout for XX.X%. base driven relationships efforts, work dedicated achieved record products, gross were network strong team of growing the partner impressive a new our worldwide. consumers, our of loyal the

Football we Skechers online including launch a football. and Arsenal along Harry, of elevating XXXX, a includes our categories: always, Basketball. running, new introduction These the Europe. remain pushed and Oleksandr specialty football States and which in on now technologies core to price. In Europe select of heights at breadth reasonable markets award-winning are will year's quality, coming Today, United [indiscernible]. innovation goal division, retailers, and to of We also last roster new Football key Skechers in golf, our boots be athletes design principles: while [ with excitement in expand and we with Defender, with walking, As the Skechers scorer categories partnered to Zinchenko to awareness Style, I'm Skechers at new recently focused King Performance two generating ], available top is our that the the around world. comfort, announce stores Harry of pleased announced and

growing Skechers to We China America, York markets: collection New the Mann our also XXXX. Terance Slips-ins, extend to reach, a to to past Clippers been and and more has continue further year, Uno committed Dog. growing Julius GOwalk in successful Skechers focus L.A. and partners, Allstar, Philippines proven marketing collections our plans but hands-free we in force basketball markets North world's for standout Basketball. and our expanding Snoop business. This our on capsules and lines with Martha including signed like introduced will Nicks largest the are we Stewart and remain Athletes in expand Randle launched The new

ambassadors for Deere working unique we global that targeted new a a footwear John including and technical we by initiatives as to will marketing well Pacific are extensively key supported This across athletes be trusted with intent. and using Cha as recognized who globally agreement includes brands initiatives locally K-pop purchase collaborations the awareness are and These offering. drive Eun-Woo, and a Asia actor two campaigns star region. on brand more XXXX, such will For unite as

team businesses. direct-to-consumer footwear enhancing including in products an designing impactful Fortune and Skechers accomplishments wholesale we retail manner year our shopping becoming the comfort efficiently our our experience grow Together Our we the XXX and with are to Skechers world, were stores. meeting surpassing and needs numerous, company a and delivering X,XXX consumers' partners, in as further our the and

billion. Sales results. quarter flat. fourth of XX% in were and $X.XX sales sales domestic total increased our X%, increased to quarter sales the X.X% at International Looking our representing approximately fourth

continue increased total see of direct-to-consumer strength time our segment, We XX% for which and the exceeded sales. XX% first to in our

major sales of wholesale by conservatively was return indicators which closer in inventory sell-throughs some that XX%, first due accounts partially a digits. was handful up in half goods But X%, our improvements key challenging wholesale, actually taking for all, growth and The in offset our the Domestic optimism primarily United to a to decreased In had fourth year key declined quarter International will the give Our inventory levels APAC, decreased which return decrease business due our including the though of a XXXX. growth to Retail to X% us at were retailers. over particularly XXXX retailers primarily double-digit improvements to healthy wholesale faced holidays. wholesale EMEA, in China managing single congestion States. wholesale at season.

milestone Skechers worldwide. At We and X,XXXth new XX, X,XXX we our due closed store to bringing opening with across during the increased domestic stores reached to Turning we quarter to had Colombia. and and In XX Bogota, in fourth a the by physical XXXX, grew in quarter, direct-to-consumer XX%, stores digital driven strong our where sales X,XXX performance XX%, up key sales the period. holiday selling segment, both company-owned stores locations. opened us was Skechers-branded International strong Skechers XX% year-end

opened, the and Colombia, China, each our in Australia with and United Kingdom, our the store Indonesia, X the India, continue and in count in opened Mexico, China, Colombia, and and We Chile, in expand and XX stores in the and each the and X stores Italy, stores X including Chile, Rica, Peru Costa in XX to bringing XXX X in in in Malaysia the States, France, X of each reach to South addition in In X in each China, Thailand third-party Malaysia period, third-party XXX we've Also date, quarter United and Vietnam. Spain in and locations company-owned Korea, X first X to global stores each United Thailand States X,XXX. Panama.

open worldwide XXXX. to stores company-owned to expect XXX XXX We in

reduction. Following on congestion, in our inventory carefully year's levels we chain last supply resulted XX% remain year-over-year which a focused managing

invest center which cost. source center newly expect We this Panama American as primary to which increase new of a also in We in Canada began XXX,XXX South to for our distribution Columbia, opened times logistics in be shipping become meaningfully for Further, shipments capacity. in delivery our continue capabilities. operational British we new our this from square reducing distribution our and year, foot to we our as well Mumbai facility expect quarter, will

to an financial enhancing results. technology operating are on now would delivering And we for to in more our increasingly I turn ultimate always, Skechers efficient John details comfort committed in experience like shopping call manner. the to As the over and the

John Vandemore

Thank share presented inflation challenges. well headwinds, rates challenges, macroeconomic were from States, you, and inventory good the United particularly interest everyone. full for backdrop], achieving several as XXXX rising afternoon, Against brand. for There David, earnings the per as delivered year, this [ significant and which wholesale stemming of in including largely performance our $X of of Skechers strong congestion. are $X.XX, margins of each billion, gross XX.X% and records sales

operating reaching the our strength and to X.X%. profitable Collectively, progress goal the of ability meaningful made these brand of demonstrate margins around deliver also our growth. the double-digit We toward Skechers world accomplishments

developing remain our team focused product for brand expanding growth our our global talented on presence, against executing and strategy. consumers Our exceptional

in billion, direct-to-consumer demand Comfort X.X%. Turning grew Robust global products to record to quarter. our year-over-year which the drove sales strength continued fourth value for our million. another delivered $X.XX growing compelling of business, consumer and $XXX.X distinctive proposition technology Skechers XX% quarter

For an stores was in segment digital momentum sales. fresh remarkable represented domestically direct-to-consumer the internationally XX% physical and history, of in This combination over XX% paired the first innovative by our XX% performance is by achieving driven segment of our demand double-digit this both time with our driven growth. increase our with of marketing. product The consumer indicative and brand of and strong effective total

on opportunities we X.X% as million. excited to direct-to-consumer deliver strategy our omni-channel continue sales decreased We presence to about worldwide. Wholesale $XXX.X year-over-year expand our to growth are our

Europe, inventory wholesale primarily reflecting inventory sales prior last XX% As wholesale as year due congestion the lower shipments the in to well markets expected, in conservatively. sales [ as year comparison declined levels difficult ]. domestic X.X%, certain as declined International to customers both continued managing versus

be shipping positive However, and internationally. encouraged see trends both we by to order of the half and in first domestically XXXX, continue we

turning and offset every sales regional nearly in lower led stores, holiday sales. particularly quarter Now grew this market to during at lapping year-over-year year-over-year prior XX% was sales, digits across double double-digit sales most in sales customers. In increased which decreased offset by XX% by to the dynamics. In including year. grew comparisons Pacific, part were by to direct-to-consumer our double-digit Asia sales grew enough the the which for by was sales our channels, digits XX% X.X% channels aforementioned million, driven country. Americas, certain EMEA, most domestic robust difficult of the wholesale to as million, Direct-to-consumer across as $XXX strength by the in not partially continued growth to growth in impacted Unfortunately, critical X.X% wholesale In double markets. $XXX.X increased inventory improved markets. In $XXX.X This period. congestion our well fourth due year-over-year in business, million, China, year-over-year to of driven retail growth

well quarter, be to to continue distribution outside in progress India due as to we our transition new saw We the higher China. Similar Mumbai. with see as challenges center delays last of Skechers to the inflation associated encouraged shipment by

of points in XX were in over as to administrative comfort XX.X% of mix to The marketing the gross to sales United brand our and sales basis our and XXX and improved compared driving However, Overall, the to was the Selling basis the by a improvement investments XXX particularly margins increased and wholesale X.X%, building channel expect and year. depreciation to direct-to-consumer costs. awareness our in XX.X%. the technology from expenses addition XXXX. Fourth higher including consumer market year we increased primarily prior driven prices launched basis focused due newly rose percentage of points primarily spending freight for products compared year, increased last points categories. margin up product return operating to support the deleverage were of basis for a on States. XX.X%, average as X.X% due points a and from to expenses lower increased sales from growth labor as Operating percentage rent, million, quarter year. selling expenses normal quarter trends growth to our General higher operations course a a globally versus as percentage in year-over-year our XX% sales, to $XXX.X to segment. Earnings last and to result of to compared operations X.X%, was increase XXX prior

compared increase positioned our diluted and management to to the faced $XXX.X We for our equivalents able shares when support from the to year, discrete at benefited we prior efficiency. essentially share, rate per receivable inventory billion and and utilize were or versus and Inventory constraints investments distribution of operating $X.XX prior end the items. technologies, to challenges demand the prior to XX.X%, and XXX.X Earnings year our for new balance levels year. and offices. XX% and decrease ended flat domestically healthy the XXXX. Accounts $XX to in a compared processing to cash and $XXX.X turning new million was improved share compared in $XXX.X credits compared million our million, related of X.X% we year, per the levels certain quarter direct-to-consumer the tax quarter the early quarter effective believe to of the now in were tax year investments X/X primarily outstanding. And the a we cash, fourth were store million sheet. our of prior was when capital million openings related which corporate with million $XX.X related foreign from diluted $XX.X are centers. Notably, were increase inventory at distribution capacity to well Our on current infrastructure of million, expenditures $X.XX prior in $X.XX an billion, working expansion million construction Capital to XX% by we lowered $XX.X quarter

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

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

deploy We continue our balance maintaining sheet consistent while with durable capital a and our to stated abundant philosophy liquidity.

to guidance. turning Now

XXXX, comfort proposition. enter we ability with technology compelling products, our the around the with collection of our serve we As value consumers unique to have globe coupled

are together, confident Taken the our we brand. of in strength

However, we of that into have most and environment, are a these also the keenly geopolitical XXXX. in our such for factored guidance operating aware initial remain and uncertainties macroeconomic notably risks dynamic

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

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

financial constructing is effective XX%, and in expenditures as profitable between are between capital remain growth. We our we be capital priorities $XXX second and be and and strategic your and facility, square With results, we confident the look and million capabilities I on a to to over to distribution incremental we to which XX% China, Our remarks. our time continue expanding will center additional for you to turn David on markets, our that, expect expect in growth today X all elevate release and including XX. including our this tax expenditures strategy now likely for $XXX year well invest foot our total thank expected to updating April will opening distribution million call next, adding in to our omni-channel we forward rate capacity you million Thursday, for closing year the key positioned quarter drive first which long-term in stores,

David Weinberg

annual We partnered marketing company Skechers and resonated sales In for with Fortune with that campaigns John. a X,XXX top-tier record talents you, became XXXX, and delivered surpassed Thank quarterly and XXX stores worldwide. Skechers consumers. collaborations

to styles, audience Importantly, hands-free comfort expansion new proven thank supply all into integrating performs entire that technology Skechers a by largest achievements. We and both we are two to notable delivering the this our and broader extended committed and of chain team for offering another of were and footwear our football and milestones quarter. successful Skechers worldwide the slip-ins delivering our to basketball with sports

worldwide exceptional in strength product. As we the enter XXXX, we ongoing the remain consumer confident our demand brand of for our and

remain. We that inventory domestic international expect partners some will to continue and conservatively replenish and macroeconomic concerns will

We grow growth we roster our are Skechers to grow and to have worldwide. with our and sales. It to on with business product working partners international and opportunities focused initiatives that ambassadors, our enhance many the of belief our wholesale, our story direct-to-consumer return and diverse is tell our within further business global numerous our athletes

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

Operator

from is first Laurent Our Vasilescu question Pariba. Instructions] BNP [Operator with

Laurent Vasilescu

of little down first you're XX%. a the about a the I can And a talk maybe would business. bit very a bit overseas little you I bit the wholesale helpful. That you've to that growth was more also surprise the John, would U.S. little seeing be of like for about ask growth? about to year? It half commented think see

John Vandemore

mean year. has domestic I to the down all domestic wholesale XX%, rocky Yes. not just XX%. marketplace been specific, wholesale is Listen, be

a seeing lot of prepared within mention we're David that remarks, his As made still customer base. in conservatism

interesting tier is, David at accounts as of year. up actually retail what sell-through for I the Now was is think slightly wholesale our mentioned, wholesale also sales top

that we've in think that post-pandemic a driven I you of exactly destocking about. been last what from surge. of year year has what been a by congestion talking see period This is So can

As about now terms first as to is quarter we really XXXX, the in what both and actually the look we're booked the of optimistic of at shipments seeing, far thus out as we're point. this about month far half, we're forward through for which first bookings

we're what optimistic seeing. So pretty we're about actually

to of to channel. power growth this as that we cleansing the direct-to-consumer And what that, return clearly I through in think it predominated will extraordinary situation us demand think a And clearly continue consumer 'XX. will in expect product that to this very is for wholesale what reasonably with I our be reflects evidenced along inventory point the year. at numbers for domestic

Laurent Vasilescu

you China follow for here, a I marketplace how think thinking like up up forward contracts? for resting in about XX%, other January? with that now parts. rate the new very think new X% international And you if are could two And XXXX? part but selling of John, as do was here's seeing And question What brands you heart the these that nice, question, how expenses? my second my are in about I going outpacing some Is clearly marketplace. second right

John Vandemore

saw. XX.XX need were you [ what talked of we before holiday On the with I about overall. performed mature the ] what period quarter with to allow really market a Yes. selling in that sense happened, that incredibly to mean, incredibly have pleased with China, good we XX, you how whole we're period, We and double with pleased

Now we've QX by optimistic a ton was given the still really we recovery, is which than good. XX% not a year, CNY by we don't about so up early I the where be early are to outpacing I reads, a what And the in in continue would full There's in we've what is China in would to which for to way, started. in about back want January XX%. seen every channel up expectations, or show far, to right, coming China China It's was by so still market where encouraged you good, see. I We're seen date. But they it our what reset would we to up market say it's we definitely say continues obviously which talk originally expected need eventually. to and But say think for. performance, to do of terms unfold. marker far, I but hope continues of recovery better time could of that we we will period see

think a In terms new setting we're of don't selling, I no, here. level

the we we particular everything our Arch consciously did we in slip-in Fit around course new to mind, when keep hands-free of we're work you incremental would technology. technology technologies some in As on the category. newer very brand want got do layer Skechers been you year, support especially these to But of new mentioned, over then ahead there you're opening a categories. building, of in from investing And as this in to curve overinvesting

So represents I making entrants that much aware resting and to and as appreciate lucrative make into a like new don't as represents understand of and point we new categories sure an investment think very, technologies consumers basketball our football. performance comfort it we're our think, are

we think you where as [ So in so intentionally, this ultimately pretty determined were I year that's what and the consistently we've is is reset amount. overinvesting but ] seeing you're concerned, far -- told we in

David Weinberg

Laurent, just There's year. from quarter wanted as as I wholesale. new the far to into as some just domestic point well, out nuances

the whole late was we they part to -- think of reported to possible about While quarter, season. as weakest try the it and led goods October believe the worrying the and that quarter, as the take I people

for we've had to it for pick And I more at December at started December, be to us difference. the than that November, a makes through if very turned in us out January, believe up you good as well. shipments got season, everybody, the we and holiday it grew shipments up As and for look

the kind wholesale, take by you anticipated board though than as difficult. would January well as a domestic stronger was shift, we of have means originally weather we've all across even If significantly the had

to and new people picking season. So the and up back think getting into ready I are move coming

really missed So and fourth are we that set I you haven't think spring the put January quarter much and season. the really getting if together, for

Operator

Our is Jay from UBS. next with Sole question

Jay Sole

in margins? guide between gross talk QX year My for about splits what's SG&A? just question the this then and is you 'XX EBIT for just margin implied for fiscal how on the for Can guidance, and the guidance

John Vandemore

foresee specific. I Jay, favorability say in is gross some in we Well, margin still I QX. Look, pretty think would what

be still here mix to the year business went where that incredibly for [ We If we accretion to because you think quarter we left margin. think above about from mix toward and the had direct-to-consumer XX% first DTC some right? Now mixed last in perspective. heavily dependent, ever particular, that's going the there's wholesale this do we in tilted to be conscious got in to time the expect gross a return growth. We ]

pretty continue bit events sales flow the for much some away, You'll in see continue from margin. end think We're day, through. say, that. that we over-indexed closer. to of that it, in we would we to just Super relative mean does a invest perspective, in the at notably to going And we XXX marketing tend aim continue most look, QX. I marketing. I nicely little year, we'll better QX would have to this the That double-digit came should than down to much bps at operating We're actually, Bowl that a to I thought away in chip

you a guide reasonable certainly for and we but getting we work to hold. to it's for As believe level, to entirely towards we'll know, us to continue And there. us it's that objective certainly continue guidepost don't

Jay Sole

this but can for give segment just us year? one specific I on I the probably color if more. within one, try And you just any is this growth by know another could guidance revenue

John Vandemore

of would to and down order -- lot expect some to of going seeing is and activity timing are Yes, close-in this mentioned, pull as because a I activity. really again, boil we David

digits as but the [ first opportunities rate heady do to pretty at double-digit expect year, done bit it's the full year. this the our would as this to not on the Direct-to-consumer, moment, a it's the wholesale a you're also to be uptick Maybe Wholesale still to because number. going on healthy reveal should overall certainly probably side. continue a see high say XX% could is well. domestic good amount, single we ] year to So well we flip. expect themselves, I expectation at probably slight current of a

see good to recovery. So good we continue trajectory,

there's I we today, in think probably early. more sit also a it's anything think if that, we opportunity but than where risk lot

going we're watch to So things unfold.

Operator

Our from Jim next Duffy question Stifel. with is

Peter McGoldrick

McGoldrick Jim. Peter to about I This on is wanted store for ask openings.

had net what stores doors level, productivity and you're on talk owned have plans Could seeing new you're next XXX how XXX you a those out, you store compare how your from footprint? network, retail and the of they existing that to progressing, XXXX forward think base years? And retail total should going building how You year. Skechers total for XXXX about we in future in of new in a X,XXX-plus

John Vandemore

Yes. we're Thanks, on stores making mind, estimate on in thing stores globally. keep most Peter. to an look, to what's the type but Yes, is important opening the new we're new stores, right us of that

range company-owned a would global And global that mind, a have you, number that's or tell on costs. bias think work below, I adding in some we probably And and present reveal we give that's tend themselves opportunities within opportunities the dynamicism the that a that with, so or leases, that a that number, us themselves. more so above a we in see United that's upon what you than then keep more shorter range can depending rely start-up States, number markets I lower bit than if to a again, towards includes

bit we And year. those the to little go fluid tend more a so be throughout as

we're at. mentioned Colombia, We north store, can't resting if I in our can of you X,XXXth total achieving remember you where the In we're and correctly, was it's terms already number, well I X,XXX. tell of a but I final north of well stores, number at that past which of give

to future is So to that. we're are not significantly at today expand We going think some that above, double worldwide envelope continue point. where if we

to openings continued do well. store have New

we a box stores. would domestically on certainly big fairly have pronounced what We focus call

a hold can we States. continue what can that broader assortment. They accessories, open that's in and the apparel, stores So hold United to

we remains a that's United an to in the that a stores. important I profitability you expect robust think just for mean in has them opportunity have the the to the those in opportunity tell that occasional is we we should an think it's opportunity. I us, that that while. obviously, most fairly I not stores level already us would that stores expect. I think about absent add, again, outlet from also normally I States you, may an for way, And what would at has not right open they contributing path just would though, be

channel markets of markets our the our for pushing growth opportunities across And particularly the omni-channel us that in product this platform. desire definitely It last was successful fourth we in for are in saw opened we globally. year, solution that satisfy quarter, incredibly many year had We avenues. an of different think lot new I to a to those us offer our continues consumer that spectacular

And going emphasis heavy be for a but internationally, to so that's worldwide. still particularly us,

Peter McGoldrick

quantify about any And to the in embedded about we in first in then on and inventory what's some congestion impacts there international on more are markets guidance think well? on the quarter? quarter. there this as then And weighing comments us deliveries how the fourth Can should quarter going tell you

John Vandemore

specific would they're I have naturally into to the demand customers. able unfortunately, weren't that durable. balance was we because it the Yes. so where 'XX. a the what they're I to through offset pretty markets call had what today of market also is going think deficit expect been direct-to-consumer, notable right we not direct-to-consumer every we balance also may in wholesale. the ultimate market has a it don't I in and vis-a-vis would occur atemporal to describe of would them as What We handful was to don't say last tended or

doing seen wholesale I a the of consumers had grew just as it in we've direct-to-consumer also what that things. direct-to-consumer been we we mean, wasn't we the see you've situations up. some and quite would the other in I year, the pullback that in in have want example, significantly in in we wholesale vis-a-vis markets. But all because of product where make offset point if that's where it I and the the been And can't mature because on couldn't And recover a a significant XXX%. out, we some use market So don't year. particular, as year side side challenges mean, as We've markets that's last I'll We outgrowing on direct-to-consumer quarter, an had our channel because presence.

take pretty mature you if market but their XXX%, comping they're stack, still that So grew this X-year it's market. hard, if a a if growing you're against significantly that's especially quarter,

we expected So were think, some definitely in in bit way that this would indicate particularly a difficult there for that are anomalous don't, and facing letdown comparisons, I 'XX certainly keep any mind a I in beyond. quarter EMEA or were

Operator

with from Cowen Our Company. John Kernan & TD next is question

Unknown Analyst

on is Alex This John. [ for Douglas ]

remember I you did commented there up fiscal the a Was that trend And about persist, correctly, to that trend if that of driver 'XX? if last in higher ASPs. being trading QX? you consumers margin driver to gross do on expect the changes of a So as be portfolio any in within call

John Vandemore

embedded trend consumers of That reflective buy our comfort think, did choosing which persist again products is, them. is in to with technology we our

what though. lot So we've year, within our of seen that evident consumers is own up. trading was portfolio, A last

see lapping footwear. frankly, don't upsell year that those be to pronounced is quite a can to technologies, And to amount and, in know offers don't we're it's last because because opportunities that's continue that, But know But going drive going to of in consumers this lapping accretion now. year-on-year a into our squarely we continue more effect as we technology pretty we're I something that deliver significant simply portfolio. more solutions to I margin consumers bring effect our just it So year. certainly It gross that to them.

Operator

Our Patel from question James. next with Raymond is Rick

Unknown Analyst

could the any to Josh that might be if you're just it costs seeing filling fluid Red very situation, talk it's a on about in I issues? Sea few shipping if of how as able was you'd and curious quarters from know if I you freight year? but think for curious touch This is I'm just upcoming we affecting Rick. the the times impact, the about be in any, next

David Weinberg

different we're as is no Well, as anybody Europe than far concerned, else.

depending in there's a in in for had get of situation first in, we new. news how feel the And are picking I demand on think number port time it in higher out we times there lot of the long is goods and the way of takes bought up I'm and we're good going no showing to early. ships up pretty good it us a additional the a goes, a quarter, around

in issues seem as East the I up issues But Panama well, as U.S. it be in is to Coast. January. what had as our right ship we of through it that going West of some doesn't good could shape. because But be. were I a around Coast future don't little have of extensive and because the to all, it the know It the said be the to pretty in month the backed the early, getting well. We December obviously, in and very up whole taken to held seem world. holds. We heavily through knowing going our the beyond given Canal Like before, this has deliveries was we down end now, in January very expectations

receipt and with February, we and what and happens well major sit inventory-wise January markets. position we see going good a as the of But a now, go and in for the sit we'll strong very into we in in through of position our very goods, now, right year. month shipping back right So

Operator

from is next Securities. question Wedbush Nikic Our Tom with

Unknown Analyst

This is ] for on Tom. Quigley Matt [

initial basketball a this little about into year. touched prepared on past bit You remarks soccer your your entries and

we those how for the and opportunities for XXXX think growth about categories beyond? Just should

David Weinberg

But for signing significantly the professional a players to we have 'XX. footwear of don't Well, there's certainly the technically just and and around order places them. moving in cultivating lot great early and advanced the of lot a for us all have worldwide of us opportunities around basis on lot And footwear you both for world. try from players imaging the for exit 'XX, there know apparel price major will we an correct and have, into a getting go world. do This be get are as and growth and great start in through into we more our them, quite 'XX obviously the them, it, players reception getting a for high around a they're if think use year, the opportunities world sports as we interest the for 'XX, is and I a large. we not our and

go a significantly and as happy we're starting slow it's stages and profile obviously and go careful large with out it's be received year. to it ready around we are where this throughout and but because marketplace, getting being very trying is take world we're So a it very today, we high how in how to the

Operator

Danet ] Our Piper next question with from is Sandler. Abid [

Unknown Analyst

causing this market in that talked year. wholesale DXC in deficit You the strength the about

then have domestically wholesale how DXC some think that strength just we about the restock channel at And point? So follow-up. I a do lapping as

John Vandemore

I I'd wholesale think caused I be don't it specific. -- just would very the challenges.

their was they it latest traditional found technology-infused consumers think the product that couldn't solution our for product, favorite who get retailer. at our I many

grow kind this will product pace saw look plan grow for direct-to-consumer I as had consumers it expect is, as the year. business it for to we grow. our of available It So continue for heady many of us, but the still We of forward opportunities for imperatives. may B to those It grow. to continue a at strategic Listen, one the to and digital nicely. not year, thankfully, think we was we stores see to the for a we that we inventory mentioned,

did would business your mind we pretty to But And as, so in in a it opportunity next growing to don't this again, to continue not on consumer. have everybody XX% we I as I direct will impact year. be have again, that significant a to year direct-to-consumer significant think may that just year-on-year the just ask grow It growth keep again, is really fantastic.

continue for done mean consumer that's So DXC so think history, seeing product We profile to this through expect I wholesale on We've great it's be going that together. and of expect the in in right? to any be grow really back side. the moments resonate and that don't at to there. with there's product, innumerable I direct-to-consumer success the growth sales seeing reason why wholesale that reason and we're and incredible to again, is technologies can't incredible level, add in we're the both our we The the those we what would pulls why year. And that,

Unknown Analyst

And pressured it wholesale on back, were With any those this sales not material? then coming is year. just quickly, pressure does Or that the distributor gross put margin?

John Vandemore

tend depends. to see It but true quarterly our more is lowest. can it that be material, are fluctuations, it We distributor gross margins

for mind, almost Now costs we also bear none the keep of that channel. in operating

we'd one where the margin. year back distributor nothing because So was year. in of business than last lower more an to margin. Look, it's gross very keep last little a to a also a had that good It's before. I Again, it our see would took of in-house get distributor you was anomaly year-on-year to look operating keep region one of just love mind bit is point they in for at just an via-a-vis been number major making out, mind the things year up in that as acquisition. Nordic distributors we the the

So think, or be more for bit transition entity. consolidated fully three them I we a little quarters, maybe than to that, a

them also we took a chunk of consciously move So distributor and in-house. sales our

is just of transaction. vis-a-vis that that decline So some

Operator

Straton Alex with from is question next Our Stanley. Morgan

Alexandra Straton

than You quarters the you wholesale lot sound all optimistic of a a in more order number book. on have

behind inflect does further, the the being this you? feel weakness say So a or do you market follow-up does that, And maybe as you wholesale domestic fulfill guys inventory as enough firmly have that demand? on to inflect quick as view do demand you that

John Vandemore

domestic the [ five optimistic say, And quarters would orders, we're when stretches we're business first in what back what to seeing congestion that us because deviled wholesale in behind I'd we're gives we're conversations seeing and I encouragement. what last, the we cautious this really say began. for ]

a optimistic we're about see And it's we're been think while, good. we'll what Now because seeing. but I that's

mentioned, crazy, things a if early levels what and large, end invested our we're be And of we about tail year. by say, I'd we've to our the because going inventory at yes, right at very inventory now distribution. of good I we in plus in mode. But in efficient feel you're think at, catch-up last brought some position. the I David go mean a we're lot

would pretty the obviously they we a came that, we production but back getting infrastructure, of, to particularly efficient chase cognizant be every our day about to opportunity in, our more window. to good have which There's increasingly would So feel within good the have feel certainly booking is we you opportunity chase about orders right? of handle limits, the towards timeline if end ability to

Alexandra Straton

cleaned the of footwear your How in view? follow-up. view in you now? total up guys Maybe do that market like right one in the so Has more inventory kind been

John Vandemore

in that good Skechers and inventory. technology-infused say, perfect partners. have about can still is retailers of even for behind more don't I of the for say the before, the way we we those we've our really felt some And fresh I to into feel We there product. this was a think where said wholesale Well, visibility inventory case I we the felt get while, today. that's the opportunity new would totality

Operator

today's further Thank this are no conference. conclude does you. questions There This time. at

time. disconnect Thank for you your participation. your at You lines may this

Skechers U.S.A. (SKX) 1 Feb 242023 Q4 Earnings call transcript