We mentioned the international growth was up. The domestic growth was up overall. I mean if you look at it within regions, the vast majority of our markets are up. So the customer is getting to the brand. We like them to have more avenues to the brand than what they’re taking advantage of right now. But because we can’t control the sell-in into some of those Wholesale partners, we have to rely on the composite of our business, which includes our own Direct-to-Consumer.
David Weinberg: I think you also have to take a look at the order of magnitude of how big inventory was for different parts of our businesses. If you take into account our statement on inventory, which predominantly is for our own use, if you look at our business, no one can say that our business hasn’t grown year-over-year as far as sell-out is concerned. We’re finishing our third $2 billion quarter, we’re at $6 billion-plus. We’re growing very nicely. Yet we see inventory by $400 million at cost, which means if you were looking at our suppliers on the other side, we’d be telling them that we’re selling great, don’t worry, we’re going to catch up soon. But in the meanwhile, we bought $400 million less than we sold. And obviously, that has to catch up.
Our inventories are in-line and lean. So as our Direct-to-Consumer grows, we will increase them. The same, I believe, in order of magnitude is true when you evaluate our distributors. They had inventory on a significant percentage as we did. They’ve been selling out well. Their inventories are online. They’re coming in for a much stronger Q1. It seems so far and are growing. So in that perspective, that will increase as well for our purchasing. And while we don’t have as much insight into our third parties, predominantly, in the U.S., we do see more people chasing product outside the U.S. in some marketplaces, certainly, in Europe at this particular point. But here, because it’s not only Skechers product, and there’s only so many hot products in the world and everybody had to clean out at a different level, and because they are nervous about their inventory and their businesses in general, I don’t know that anybody feels about their business in general as well as we do, barring a couple that obviously are well-known.
So they’re holding back some, but they got to be closer. And we know ourselves, and they’ll be clean, and we know our stuff will sell. So one would assume, sometime in the next year, we will get to a more normal flows all over the place. We’d like to believe it’s first quarter, but it’s coming in first or second quarter, I got to believe, because by the time we get to next back-to-school, that will be way too much time, and I don’t know anybody that says inventory issues going through that part of the year, we’ll have bigger issues than just inventory.
Tom Nikic: Got it. And if I could sneak in just one more about the basketball launch.
David Weinberg: We can always talk about basketball.
Tom Nikic: Do you view this as an opportunity to maybe get into some doors that you’re not in today? Like, I mean, I guess, like Foot Locker is the obvious one that comes to mind, given their big basketball business.
David Weinberg: Yes, I do think it’s possible, but that’s certainly not our control. We think we can find those consumers, and those consumers will come to us through our Direct-to-Consumer or other places, they buy it. Obviously, there’s some of this product that doesn’t sell everywhere, and it’s fairly exclusive. And as we get going, we’ll certainly expand our distribution. But we think, around the world, we have great opportunity to capture those consumers. And we do think, on a worldwide basis, we’ll get into a lot more levels of distribution that we certainly haven’t penetrated yet. But we’re — it’s not a today thing. That’s as we grow. We’re not planning on powering it through to make the biggest impact we can make at the earliest time.
We want to build it carefully through grassroots following and on the product, on the technology, on the comfort that people will wear and will continue to grow for us, and we’ll grow into that as we move forward, both in soccer, football and basketball.
Operator: Our final question is coming from the line of Abbie Zvejnieks with Piper Sandler. Please proceed with your question.
Abigail Zvejnieks: Great. Thanks so much for squeezing me in here. Just — is there any specific color you can give on how Direct-to-Consumer has trended domestically quarter-to-date? And then just as a follow-up, can you — I know you gave the Wholesale — international Wholesale for EMEA, was up double digits in Europe. Excluding those distributors, can you give that same metric for APAC, if possible?
John Vandemore: So I think, probably, as far as we’re comfortable saying about Direct-to-Consumer so far this quarter, things have been good, continue to be strong. I would note kind of similar to David’s comment, early October isn’t a great readthrough to holiday often. But we’ve seen continued strength in the Direct-to-Consumer business. We are getting into a period where, compared to last year, it’s a much more similar situation, where, as we noted, the disparity in inventory levels, particularly in-store in Q2 and Q3. So it’s going to be a more normal comparison. There’s not going to be as much of a lift this year. But within that context, it’s continued to go well. And we’re encouraged by some of the turnaround we’ve seen on the domestic e-commerce side of things.
We don’t really give an APAC x distributor number because there really isn’t as much of a distributor business in APAC. I would say, there wasn’t also as much of a disparity between what we saw in APAC growth with or without distributors. Distributors are concentrated geographically. So the Asia distributors weren’t seeing as much of a timing differential year-over-year. Just to put it into context, by the way, when we look at the distributor compared to last quarter, if I recollect correctly, last quarter — or last year this quarter, distributors were up like 80%. So it’s also a very unfavorable simple comparison to prior year that we’re dealing with in that number. And that was a contributing factor as well.
Operator: Thank you. Ladies and gentlemen, we have reached the end of our question-and-answer session. And this does conclude today’s conference. We thank you for your participation, and you may disconnect your lines at this time. Have a wonderful day.
