SKX
#Thank you.
Well, it could be anywhere.
When you are ---+ you never know what's going to explode.
It's hard to see, the second quarter has the cost of the comparison to last year it's just a very difficult quarter to get significant growth.
But it could be anywhere certainly China could accelerate with a demand.
It's unlikely that Europe could, South America could accelerate domestic wholesale could certainly accelerate and some of the distributors may move up a significant piece so there is many places the biggest place we usually see given that there is no business shift out in the month of April would be domestic wholesale that can shift from July or June it's just not a phenomena that we see in Europe because their season starts a month later.
I wouldn't anticipate we would see that for another few weeks I think we strongly have a few conversations where I don't see anything significantly definitive because the weather is just turned for those that have are in a good position there their sales just started to open over the last week or so.
And they are all coming in for praline so it's kind of early in the process to seek a significant piece, but the things continue as they had the last week or so I think it certainly would be a positive point as you get out but it's very, very early in the game and we just finished the very first few weeks of April it was very difficult to reach out just about everywhere here.
Like I said it depends on the mix certainly.
Usually we have some upward potential in second quarter because it's such a - it's a smaller wholesale quarter and can be a larger retailer quarter depending on where the mix is so it's too early to say I would say there was slight not significant but slight upward possibilities for gross margin as you get through second quarter.
Well, I think it depends on the mix.
I think it has a possibility to go up certainly because I anticipate without any significant currency changes which we will see now will have those price increases in affect Canada could come back some South America starting to come back as far as currency is concerned.
We will wait to see what happens in England, the Euro certainly is getting somewhat stronger.
So I think if the dollar certainly has bottoms or close to it you get all from the currencies.
And that's some of with mix so like I said it's not necessarily a bet, if it goes down in the back half because of China we will have increased operating margins even with it so it's not a bad thing.
It's like when we have more outlet store business and comp store business because it's cheaper to run them we take a hit in the gross margin but we make a very big positive in the operating margin so something are very positive even if they impact gross margins to a slight degree.
No I think it's just natural growth.
I don't know that it's big a at once piece, certainly you get a benefit just because you don't have the pull up I mean there is 20 million left in that third quarter last year the chances are we will be in third quarter this year.
Both pieces are different for domestic wholesale so I do think we will grow it and I think our goals for top-line growth are still at the higher end of anybody else.
I think we are still very confident but we will wait to see what happens.
We don't want to push it any which way we are very happy with the gross over the last few years and hope it continues as we go into the future.
So where there is mid teens or somewhat higher or gets into 20% range that all happens as the natural progress.
We don't have enough inventory for only at-once to be the only driver.
Absolutely.
Well, if I knew that specifically well I should it would be up significantly because the franchise business in China has grown significant as most of the double digit growth you see whether triple digit growth you see.
It comes from the franchise model.
So that would pair even outside as far as backlogs are concerned.
I think it's fair to say that it's tracking better than the lower end of guidance certainly I don't know if that's significantly higher than the top end I don't know if it's quite at the top end.
There will be not as much acceleration in the second quarter because it is franchise model but it will lead to certainly significantly higher potential in Q3 for China.
So I would tell you that those numbers are still in play.
I would have if I had to do it today I would take up the lower end of that range significantly but I don't know that I would take up the top in that range at all.
double-digit growth you see or the triple-digit you see franchise that would appear as far as backlogs are concerned.
I think it is fair to say I don't know that it is significantly hire than the toppened not as much but it will lead to certainly significantly hire potential in Q3 for China I would tell you those numbers are still in play.
If I had to do it today lower end of that it range significantly I don't know it if I would take up the top end of that range at all.
This quarter's volume, but yes I don't disagree on China we said we try to have it by the third quarter.
So we will try to get that as quickly as possible.
Direct to consumer we still looking into because it's sort of selling everybody your own thought process on your own stores as far as comp store sales are concerned so we hope to have China in by the third quarter and we will make a decision on directive consumer by that time as well.
Thanks.
It's difficult to say because a lot of it has to do with retailers as far as Easter is concerned and what we lost between the port strike and things like that and I think it's always relative to last quarter.
But I wouldn't be surprised if it was on a differential year-over-year basis between first and second quarter that there was somewhere between $70 million and $100 million shift from what would have gone in first quarter last year moved in this year between Easter and everything like that.
If I had it I would tell last year first quarter should have been an access of $800 million and that's the growth you should have gotten that's what moved this year back to first quarter significantly over and that last year second quarter should have probably come in $750 million $760 million range and that's why you will see that growth this year.
All of that has reversed out this year compounded by the fact that Easter has moved from second to first quarter.
The sale through I don't know what that means.
You mean like the sport game information and stuff like that.
Yes, it's very difficult but I think for most cases and a lot of cases we sell through according to plan.
The plans we had with those retailers in some cases and a lot of cases which is why we are up a little bit more in the first quarter we sell better than plan.
So it depends on the retailers I think nobody got heard with inventory so the increased inventory they took in sold through at good rate and it's different for everybody it's hard for me to figure and quantify among on an overall basis I don't know think that inventory.
I would say most cases certainly those retailers that are doing well we sold better than the inventory buildup they had.
