Earnings for the third quarter are in full swing.
Since last week, Crocs, VF Corporation, Skechers, Deckers, and Columbia Sportswear Company have all reported results for the most recent quarter. In many cases, these brands posted strong sales and earnings beats, despite global supply chain headwinds.
Overall, earnings reports thus far have showed resilience, recovery, and a need for brands to adapt to changes as the holidays approach.
Here are three trends to take away from this week’s financial reports.
Supply chain challenges
Every footwear company that reported earnings highlighted impact from the global supply chain crisis, resulting from materials shortages, factory closures abroad in China, Malaysia, and Vietnam, labor shortages, and congestion at crucial U.S. ports.
For VF Corp., which owns Vans, The North Face, Timberland, and Dickies, the impact partly contributed to missed revenue expectations this quarter. The Denver-based company reported a revenue growth of 23% to $3.2 billion, missing a $3.5 billion prediction from analysts surveyed by Yahoo Finance. According to VF chairman, president and CEO Steve Rendle, all VF brands have experienced product delays that have made it difficult to meet demand. Supreme saw about 30% less inventory around drops, despite a strong sell-through rate.
Adapting to meet demand
However, despite the challenges, many executives expressed optimism about being able to emerge from the situation and enter the holidays on a positive note.
Last week, Crocs reported revenue of $625.9 million, marking an increase of 72.2% on a constant currency basis compared to 2020. The company noted supply chain disruptions in its release and said it has leveraged air freight and has worked on a solution to “strategically allocate units” to mitigate impact.
Skechers also noted how it was working to move inventory to keep up with the demand. The company said it delivered record third quarter sales results, despite challenges.
“We remain confident that as supply chain constraints ease, Skechers’ will be well positioned to meet the tremendous consumer demand for our products,” said Skechers CFO John Vandemore.
In a call with investors on Thursday, Deckers CFO Steven Fasching said that the company is “confident” in its ability to maintain top line revenue guidance, thanks to strong demand across brands, which include Ugg, Hoka One One, Teva, and Sanuk. To mitigate supply chain issues, Deckers has shipped more product earlier than usual and has used air freight and a “dual sourcing network to offset factory closures and disruption.”
Columbia Sportswear chairman, CEO and president Timothy Boyle was also confident in the strong results for the quarter.
“Despite delayed inventory receipts which impacted U.S. wholesale shipments, favorable gross margin performance and expense management fueled above plan earnings,” he said in a release. “Early-season Fall 2021 sell-through has been encouraging.”
Foot traffic improvements
As people ease back into in person shopping, many companies noted foot traffic increases in their earnings.
In a call with investors, Columbia Sportswear’s Boyle said that store traffic levels improved year over year, but are still down compared to pre-pandemic levels.
On Thursday, Skechers reported a 43% growth in domestic brick-and-mortar store sales and reported higher traffic in stores across the Americas, Europe, parts of Asia and in the Middle East.
Deckers called out the early success of its new Hoka brand stores, which opened earlier this year.
“Once we land on the optimum consumer experience and concept for HOKA stores, we’ll look to open additional locations in China first to serve that monobrand market and then begin exploring longer-term opportunities in North America and Europe,” said Deckers CEO, president and director Dave Powers.
This content was originally published here.