Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What were the primary drivers behind the strong Q1 results that were above your expectations?
A: John M. Vandemore, CFO of Skechers U.S.A., Inc., attributed the strong Q1 results primarily to the success of their product offerings, particularly noting a stronger domestic wholesale rebound than anticipated and continued strength in both domestic and international direct-to-consumer fronts.
Q: How do you see the wholesale business developing throughout the year, given the strong quarter and focus on this channel by other brands?
A: John M. Vandemore, CFO, expressed optimism based on early bookings and the rebound seen in domestic wholesale and Europe. He mentioned that the wholesale segment is expected to grow mid- to high single digits, driven by international business, although domestic wholesale is also showing positive signs.
Q: Can you discuss the expected growth in wholesale and how it compares to last quarter's projections?
A: John M. Vandemore, CFO, indicated that the wholesale segment is anticipated to grow at mid- to high single digits, with strength likely coming from the international side. He noted the success with partners who have embraced Skechers' Comfort Technology product suite.
Q: What are the expectations for gross margin trends given the current market dynamics?
A: John M. Vandemore, CFO, explained that gross margin improvement was driven by lower freight costs and a favorable product mix. He expects gross margin to continue benefiting from channel and product mix, with direct-to-consumer growth outpacing wholesale.
Q: How is the ERP implementation expected to impact operating expenses and capital expenditures?
A: John M. Vandemore, CFO, stated that the ERP implementation and other investments are part of efforts to grow the brand towards and beyond $10 billion in sales. These investments are included in the guidance provided, with the intent to improve systems, stores, and distribution functionality globally.
Q: What are the plans for store openings and closures for the year, and how does this relate to net store openings?
A: John M. Vandemore, CFO, did not specify the number of store closures but mentioned that the guidance aims to reflect net store numbers. He emphasized the importance of opening the right stores to ensure they contribute positively to the business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.