Skechers (SKX) reported a strong start to fiscal 2025, with record first-quarter sales of $2.41 billion—a 7.1% year-over-year increase—driven by growth in both international and domestic markets.
Earnings per share came in at $1.17, matching Wall Street expectations, while the wholesale and direct-to-consumer channels posted gains of 7.8% and 6.0%, respectively.
Despite these figures, the company’s stock plunged over 7% Friday morning after management withdrew its full-year guidance, citing "macroeconomic uncertainty stemming from global trade policies." The move startled investors and sparked broader concerns across the footwear sector, already strained by rising tariffs and unpredictable policy shifts.
John Vandemore, Skechers’ chief financial officer, said during the earnings call that the current environment is “as uncertain as it was during the early days of the COVID-19 pandemic,” emphasizing that the suspension of guidance was not tied to consumer demand.
Tariff Troubles and Supply Chain Pressures
Skechers’ decision comes amid escalating trade tensions and newly imposed U.S. tariffs on Chinese imports, including a 145% duty on footwear. With 40% of its U.S. inventory sourced from China and another 40% from Vietnam—both tariff targets—the company finds itself particularly exposed.
Though the tariffs are paused for 90 days, baseline duties remain, with the threat of escalation. Analysts at UBS estimate that Skechers' cost of goods could rise 24% if no mitigating actions are taken. To counter this, the company plans to diversify production, cost-share with suppliers, and consider selective price increases.
Still, replacing China—especially for children’s shoes—isn’t simple. “China remains the most reliable option for U.S. safety standards and price sensitivity in that category,” Vandemore said. COO David Weinberg added that while two-thirds of Skechers’ business is international and less affected by U.S. tariffs, the risk to American operations is real.
Skechers’ decision comes amid escalating trade tensions and newly imposed U.S. tariffs on Chinese imports, including a 145% duty on footwear. With 40% of its U.S. inventory sourced from China and another 40% from Vietnam—both tariff targets—the company finds itself particularly exposed.
Though the tariffs are paused for 90 days, baseline duties remain, with the threat of escalation. Analysts at UBS estimate that Skechers' cost of goods could rise 24% if no mitigating actions are taken. To counter this, the company plans to diversify production, cost-share with suppliers, and consider selective price increases.
Still, replacing China—especially for children’s shoes—isn’t simple. “China remains the most reliable option for U.S. safety standards and price sensitivity in that category,” Vandemore said. COO David Weinberg added that while two-thirds of Skechers’ business is international and less affected by U.S. tariffs, the risk to American operations is real.
A Cautious Path Forward
While Skechers continues to see robust demand and a growing global retail footprint—5,318 stores as of March 31—investors remain wary. Shares are down nearly 36% from their January peak of $78.85 and have shed more than a quarter of their value this year.
The broader sportswear industry is watching closely. Skechers’ peers, including Nike (NKE), Deckers (DECK), and Crocs (CROX), also rely heavily on Asian manufacturing and could face similar pressures if tariffs persist. Analysts warn that more companies may follow Skechers’ lead in suspending guidance amid uncertainty.
While Skechers continues to see robust demand and a growing global retail footprint—5,318 stores as of March 31—investors remain wary. Shares are down nearly 36% from their January peak of $78.85 and have shed more than a quarter of their value this year.
The broader sportswear industry is watching closely. Skechers’ peers, including Nike (NKE), Deckers (DECK), and Crocs (CROX), also rely heavily on Asian manufacturing and could face similar pressures if tariffs persist. Analysts warn that more companies may follow Skechers’ lead in suspending guidance amid uncertainty.
Even so, many remain cautiously optimistic. CFRA’s Zach Warring, who maintains a Hold rating, notes the potential for margin pressure from wages and marketing, though lower freight costs could help. Jay Sole of UBS and Jim Chartier of Monness, Crespi, Hardt both maintain Buy ratings, citing Skechers’ brand strength and ability to gain market share as a value player.
For now, Skechers is bracing for impact—absorbing short-term costs, optimizing its supply chain, and hoping to weather the storm without losing consumer trust. Whether that strategy pays off will become clearer as the tariff timeline unfolds.
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