Moody's Upgrades Skechers Debt Rating to B1
The footwear company's move to improve procurement and overhead efficiency has led to a stable rating outlook.
Updated on Oct. 15, 2026 in Corporate Finance
Live Poll
Do you trust companies that implement major cost-cutting programs to maintain their long-term growth?
Moody's Ratings has upgraded the debt ratings of Skechers USA Inc. to B1 from B2, citing steady operating gains and cost-reduction efforts. The apparel and footwear company, taken private by 3G Capital in 2025, is now targeting further leverage improvements through 2027.
Why it matters
The upgrade reflects successful operational scaling following a massive ownership transition, demonstrating how private-equity-backed firms can drive margin growth through structural overhead and procurement adjustments. Operators should note how the firm is leveraging direct-to-consumer growth to outpace general revenue gains.
Skechers reported 6 percent revenue growth in the first half of 2026, with direct-to-consumer sales expanding by 12 percent. The company's leverage stood at 5.1x debt/EBITDA as of June 30, 2026, with Moody's projecting a decline to 4.7x by 2027.
The players
Skechers USA Inc.
A global footwear manufacturer and retailer that operates a diversified business model across multiple distribution channels.
Moody's Ratings
A credit rating agency that provides independent risk assessment and analysis of corporate debt instruments.
3G Capital
A global private equity firm that acquired Skechers for $9.42 billion in 2025.
The details
The upgrade follows cost-savings initiatives including direct sourcing, freight-rate negotiations, and labor optimization across the brand's global supply chain. By integrating these procurement efficiencies with a diversified model across distribution channels, the firm expects to improve SG&A performance starting in the second half of 2026. These efforts are designed to reduce debt burden and support interest coverage while maintaining scale as a private entity.
Timeline
September 2025: Skechers became a private company following a $9.42 billion acquisition.
First half 2026: The company recorded 6 percent revenue growth.
June 30, 2026: Leverage metrics were recorded at 5.1x debt/EBITDA.
Second half 2026: SG&A improvements are expected to begin.
2027: Significant cost savings and improved EBITDA are expected.
Market Landscape
The rating upgrade marks a pivotal shift for the company following the 2025 private equity acquisition by 3G Capital. It demonstrates how operational cost-savings programs can stabilize debt structures during the transition from public to private ownership.
Owners should monitor the company's shift toward direct-to-consumer sales, which grew at twice the rate of total revenue during the first half of 2026. This trend highlights the importance of reevaluating procurement and labor optimization strategies to mirror the firm's successful margin-expansion path.
The takeaway
The upgrade signals that cost-savings initiatives in freight and sourcing are successfully driving leverage improvements. Operators should audit their own procurement overhead against the firm's 2027 EBITDA projection target of 4.7x to gauge their comparative efficiency.
Further reading
For more insight into how mid-market firms manage debt and ownership transitions, see our Corporate Finance section.
Source note: This article includes information reported by Sgbonline.
Live Poll
Do you trust companies that implement major cost-cutting programs to maintain their long-term growth?
