LOS ANGELES -SKECHERS U.S.A., Inc. ('Skechers' or the 'Company') (NYSE:SKX), The Comfort Technology CompanyTM and a global footwear leader, today announced financial results for the fourth quarter and year ended December 31, 2021.
Fourth Quarter Highlights
Sales of $1.65 billion, a year-over-year increase of 24.4%
Direct-to-Consumer sales grew 30.3%
International Wholesale sales grew 30.1%
Diluted earnings per share of $2.56, and adjusted diluted earnings per share of $0.43
'Skechers' focus on delivering signature comfort technology in our products resulted in record 2021 sales,' began Robert Greenberg, Chief Executive Officer of Skechers. 'We're extremely proud of the entire Skechers team and of our partners who worked through the many obstacles last year; unwavering in their dedication to the Skechers brand. We believe our accomplishments in 2021, including several comfort-focused new product launches and the further expansion of our global footprint, position Skechers for continued growth toward our goal of $10 billion in sales. In 2022, we'll be introducing more innovative and comfort technology product, developing multi-platform marketing campaigns with our growing roster of ambassadors including recently announced Amanda Kloots, and rolling out more Skechers e-commerce sites around the world. We are finalizing plans to enter the metaverse, creating an entirely new opportunity for the Skechers brand. With our creativity, product, operational support and global reach, we expect 2022 to be another record year.'
'2021 was an outstanding year, with four quarterly sales records, including fourth quarter sales of $1.65 billion, and a new full year sales milestone of $6.29 billion,' said David Weinberg, Chief Operating Officer of Skechers. 'Fourth quarter growth was driven by increases of 30% in both our International Wholesale and Direct-to-Consumer businesses, and 5% in Domestic Wholesale. The International Wholesale increase was primarily driven by triple-digit growth in our distributor business, high single-digit growth in China, and double-digit growth in the United Kingdom, India, Spain, and many other markets. The improvement in Domestic Wholesale was especially notable in the fourth quarter as we worked to alleviate supply chain disruptions. We attribute our global growth to the broad-based demand as consumers look to Skechers for its comfort, innovation, style and quality at a reasonable price. As the demand for Skechers remains strong, our focus continues to be on the health and safety of our team, managing both supply chain disruptions and elevated freight costs where possible, all while profitably driving growth in 2022.'
Fourth Quarter 2021 Financial Results: See full results at:
https://investors.skechers.com/press-releases/detail/512/skechers-announces-record-fourth-quarter-and-annual-sales
Fourth quarter sales increased 24.4% as a result of a 9.8% increase in domestic sales and a 34.0% increase in international sales. Domestic and international growth was driven by increases in both wholesale and direct-to-consumer, with the largest improvement attributable to International Wholesale. On a constant currency basis, the Company's total sales increased 24.5%.
Sales grew across all segments with increases to Domestic Wholesale of 4.6%, International Wholesale of 30.1%, and Direct-to-Consumer of 30.3%. Improvements in Domestic Wholesale were the result of higher unit sales volume and higher average selling prices. International Wholesale increases were driven by growth of 123.5% in Distributor sales, 61.3% in Europe, and 8.6% in China. Improvements in Direct-to-Consumer sales resulted from growth across domestic and international retail stores, driven by a double-digit increase in average selling price resulting from reduced promotions and higher prices. Direct-to-Consumer comparable same store sales increased 21.1%, driven by an increase of 15.2% domestically and 35.5% internationally.
Gross margin was 48.6%, a decrease of 30 basis points, primarily driven by higher freight costs.
Operating expenses increased $119.4 million, or 20.1%. Selling expenses increased $24.2 million, or 24.7%, due to higher global demand creation expenditures. General and administrative expenses increased $95.2 million, or 19.1%, primarily as a result of higher labor costs, increased volume-driven warehouse and distribution expenses, and the settlement of multiple legal matters. As a percentage of sales, operating expenses improved 160 basis points to 43.4% from 45.0% last year.
Earnings from operations increased $35.4 million to $93.1 million, an increase of 61.2%.
Net earnings were $402.4 million and diluted earnings per share were $2.56. Net earnings include a tax benefit of $346.8 million resulting from an intra-entity transfer of certain intellectual property rights, partially offset by $15.0 million related to the settlement of multiple legal matters. Excluding the effects of the tax benefit and legal settlements, adjusted diluted earnings per share were $0.43.
In the fourth quarter, the Company's effective income tax rate was a negative 398.9%, which includes a 409.4% impact from the aforementioned tax benefit associated with the intra-entity intellectual property rights transfer.
'Despite the innumerable obstacles posed by the pandemic in 2021, Skechers continued to execute against its global growth strategy. The results for both the fourth quarter and full year reflect the exceptional financial performance and strength of our brand,' stated John Vandemore, Chief Financial Officer of Skechers. 'Skechers remains committed to investing in support of this strategy and we are extremely optimistic about our ability to achieve $10 billion in sales by 2026.'
Full Year 2021 Financial Results
n/m - not meaningful
(1)
Income tax expense of $350.5 million includes $346.8 million from an intra-entity transfer of certain intellectual property rights and the $3.7 million effect of taxes on the settlement of multiple legal matters.
Investor Relations:
Andrew Greenebaum
Addo Investor Relations
investors@skx.com
Press:
Jennifer Clay
Vice President, Corporate Communications
Skechers U.S.A., Inc.
(310) 937-1326
SKECHERS U.S.A., INC. 
