Sportswear firm Skechers (SKX) Thursday said its revenues rose to a record high in the third quarter. Earnings declined modestly, but to a lesser extent compared to analysts’ forecast. The stock gained about 7% during the extended trading hours as the market responded positively to the results and upbeat outlook.
Net income dropped to $90.7 million or $0.58 per share from $92.3 million or $0.59 per share a year earlier, but exceeded market expectations.
During the quarter, sales jumped 7.5% annually to a record high of $1.18 billion, amidst double-digit growth in both retail and wholesale sales. The top-line also surpassed estimates. Comparable store sales rose 1.9% in the third quarter when a 3% growth in the US sales more than offset a 0.8% decline in the overseas market.
“Both our domestic and international businesses grew, and we remained the leader in walking, work, casual lifestyle and sandals footwear in the United States. We experienced strong product successes across multiple divisions around the world, which was evident by our double-digit growth in both our international wholesale and worldwide Company-owned retail businesses,” said CEO Robert Greenberg.
Looking ahead, Skechers expects sales in the range of $1.1 billion to $1.125 billion and earnings per share between $0.20 and $.25 for the fourth quarter, when all the three operating segments are expected to register growth. The effective tax rate for the quarter is estimated between 13% and 15%. It is anticipated that full-year sales would reach a new record high.
The ongoing investment in infrastructure is expected to provide the company with a significant opportunity to grow the brand further through wholesale, company-owned stores and third-party outlet, said the statement. Skechers repurchased about 1.4 million common shares for $40.0 million during the September quarter.
The stock plunged 31% since the beginning of the year. It closed Thursday’s regular session lower but gained 7% in the after-market following the earnings report.