Skechers Takes Immediate Action With Humanitarian Aid Donations for Hawaii Fires

by Zach | Aug 14, 2023 | Press Release

Aug 14, 2023 • 9:00 am EDT

LOS ANGELES–(BUSINESS WIRE)–
With deep concern for the people of Hawaii, Skechers USA, Inc. announced that the Company is mobilizing efforts to provide immediate help to the community of Lahaina and the larger population of Maui impacted by the island’s recent fires. The lifestyle footwear brand is committing $250,000 to the Hawai‘i Community Foundation’s Maui Strong Fund to support the recovery of affected communities and is shipping tens of thousands of new shoes, apparel, socks and backpacks directly from its stores in Hawaii and from its North American Distribution Center in Southern California.

Along with Skechers’ efforts to help those in need, an employee-led donation of essentials will join goods from residents and businesses in Manhattan Beach, with transportation arranged by community leaders and Manhattan Beach Mayor Richard Montgomery.

“This is a devastating event of massive proportions for Maui and all of Hawaii—the lives lost, the thousands injured, livelihoods impacted by destroyed businesses, and the history that Lahaina represents,” said Michael Greenberg, president of Skechers, whose Maui Outlets store was lost in last week’s fires. “We have been connected to the people of Hawaii since our first Skechers store opened on the islands in 1998, and in Maui when we opened our store in Lahaina. I have walked Front Street and shopped and dined at many great establishments, just as many have in the Skechers family. As a company and as individuals, we want to help those we know, and those whom we know are deeply affected. We are committed to supporting these communities in this difficult time, and so this beautiful town can be rebuilt to its historic brilliance. Our focus now is to do what we can with the goods and means we have to aid the people of Hawaii in their recovery and to make Maui strong again.”

Following the loss of its Lahaina location, Skechers now has four stores in Hilo, Honolulu, Kailua-Kona and Waipahu. The Company also has plans to open a 12,000-square-foot retail store in Maui in 2024.

About SKECHERS U.S.A., Inc.

Skechers U.S.A., Inc. (NYSE:SKX), a Fortune 500® company based in Southern California, designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. Collections from The Comfort Technology Company™ are available in over 180 countries and territories through department and specialty stores, and direct to consumers through digital stores and over 4,700 Company- and third-party-owned physical retail stores. The Company manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. For more information, please visit about.skechers.com and follow us on Facebook, Instagram and TikTok.

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation, Skechers’ future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the disruption of business and operations due to the COVID-19 pandemic; delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of Russia’s war with Ukraine; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in Skechers’ annual report on Form 10-K for the year ended December 31, 2022 and its quarterly reports on Form 10-Q in 2023. Taking these and other risk factors associated with the COVID-19 pandemic into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

Media Contact:

Jennifer Clay

SKECHERS USA, Inc.

[email protected]

Source: Skechers U.S.A., Inc.

Skechers Signs UK Pickleball Pros Thaddea Lock and Louis Laville

by Zach | Aug 3, 2023 | Press Release

Aug 3, 2023 • 3:00 am EDT

The Top-Ranked Athletes will Compete in Skechers at the English OPEN Where The Comfort Technology Company is the Official Footwear Sponsor

LONDON–(BUSINESS WIRE)–
Following its commitment to pickleball by sponsoring every major tour in North America, Skechers, The Comfort Technology Company™, has expanded its reach in the fast-growing sport by signing two of the top-ranked players in the UK—Thaddea Lock and Louis Laville. The elite athletes will be making their official debut in Skechers Pickleball footwear and Skechers branded apparel today, August 3^rd, as they compete at the English OPEN in Telford, where Skechers is also the Official Footwear Sponsor.

“I’m extremely honoured to be joining the Skechers family as one of their first UK pickleball ambassadors,” said Thaddea Lock. “It’s exciting to work with a brand whose values align so closely with mine as I’m passionate about bringing pickleball to all walks of life. The Skechers pickleball shoes are the most comfortable and best fitting court shoes I have ever worn, and they allow me to maximise my performance. I can’t wait to help grow the sport and brand in the UK as part of the Skechers team.”

“After meeting the Skechers team at the US Open this year, I tried the Skechers Viper Court Pro shoes and never went back,” said Louis Laville. “They are hands down the most comfortable and supportive pickleball shoes I have ever played in, and I am looking forward to representing the brand and contributing to the growth of Skechers Pickleball and the sport overall across the UK and Europe.”

“What a way to launch Skechers Pickleball in the UK, first as official sponsors of upcoming national tournaments, and now also by having top-ranked players on our roster as ambassadors competing in Skechers Pickleball footwear,” said Richard Parker, managing director for Skechers in the UK and Ireland. “Both Thaddea and Louis bring an elite level of passion, commitment and talent to their game and will no doubt leverage their success to this category, presenting Skechers pickleball as the go-to brand for comfort and reliability on the court to fans everywhere.”

Lock and Laville join Skechers pickleball ambassadors Tyson McGuffin, ranked number 5 globally, and Catherine Parenteau, also ranked fifth in the world, who have been officially competing in Skechers pickleball footwear since 2022.

Thaddea Lock is the number one British female player and four-time gold medalist at the 2021 and 2022 English Nationals—winning the women’s singles, women’s doubles, MLP team event in 2022 and the split age team event in 2021. Further titles include triple crowns at the Spanish Open in 2021, Scottish Open in 2019 and English Open in 2019. She was recently awarded the Finnish Touring Paddle for players who work hard to grow the sport across Europe and is an IPTPA level 2 pickleball coach.

Louis Laville has been playing pickleball professionally for more than five years and is ranked men’s number one in Europe. He’s also the reigning National and European Champion—winning 34 professional gold medals across men’s singles, men’s doubles and mixed doubles. Having completed his coaching qualification in 2019, Laville is committed to training other athletes and enthusiasts to further grow the sport.

Last month Skechers signed on as the Official Footwear sponsor of Pickleball England’s English OPEN which begins this Thursday, August 3 at the Telford International Centre in Shropshire, as well as the English Nationals set for October 26 through 29 at the Bolton Arena in greater Manchester. Since introducing Skechers Viper Court footwear at the US Open Pickleball Championships in Florida in 2022, Skechers has dominated the sport by sponsoring every major tour and organization in North America including USA Pickleball, Major League Pickleball, the Association of Pickleball Players (APP) Tour, the Carvana Professional Pickleball Association (PPA) Tour, and the Pickleball Canada National Championship.

Skechers pickleball footwear brings Skechers’ signature comfort innovations to the court. The Skechers Viper Court provides responsive performance in a breathable, lightweight design. The enhanced grip and stability of the Goodyear^® rubber outsole paired with a shock-absorbing Arch Fit^® insole deliver comfort and support, match after match. The Skechers Viper Court Pro™ is a lighter and faster high-performance pickleball shoe designed and suitable for everyday players looking for stability and a secure platform in their game. Styles in the Skechers pickleball footwear collection are available at Skechers retail stores and skechers.co.uk, as well as key retail partners and specialty shops.

About SKECHERS USA Ltd. and SKECHERS U.S.A., Inc.

Skechers USA Ltd. is a subsidiary of Skechers U.S.A., Inc. (NYSE:SKX), a Fortune 500^® company based in Southern California. Skechers designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. Collections from The Comfort Technology Company™ are available in over 180 countries and territories through department and specialty stores, and direct to consumers through digital stores and over 4,500 Company- and third-party-owned physical retail stores. The Company manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and YouTube.

About Pickleball England

Pickleball England is a not-for-profit organisation founded to support the growth of Pickleball in England. It was launched on 2nd January 2019 and already has over 4,400 registered members. Pickleball England has met the criteria to be recognised by Sport England and has submitted its application. In 2010, three Pickleball clubs were set up in the UK and were set up by people who had seen or experienced the game in the USA and wanted to introduce it to the UK. It is now estimated that there are circa 10,000 players and over 350 venues in the UK. Head to www.pickleballengland.org and use the ‘Club Locator’ feature to find your nearest location and begin your journey.

About Goodyear

Goodyear is one of the world’s largest tire companies. It employs about 72,000 people and manufactures its products in 57 facilities in 23 countries around the world. Its two Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg, strive to develop state-of-the-art products and services that set the technology and performance standard for the industry. For more information about Goodyear and its products, go to www.goodyear.com/corporate.

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation, Skechers’ future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the disruption of business and operations due to the COVID-19 pandemic; delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of Russia’s war with Ukraine; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in Skechers’ annual report on Form 10-K for the year ended December 31, 2022 and its quarterly reports on Form 10-Q in 2023. Taking these and other risk factors associated with the COVID-19 pandemic into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

Skechers UK & Ireland

Petra Kereem

[email protected]

Source: SKECHERS U.S.A., Inc.

Skechers Announces Second Quarter 2023 Financial Results and Record Quarterly Sales of $2.01 Billion

by Zach | Jul 27, 2023 | Press Release

Jul 27, 2023 • 4:05 pm EDT

LOS ANGELES–(BUSINESS WIRE)–
Skechers U.S.A., Inc. (“Skechers” or the “Company”) (NYSE:SKX), The Comfort Technology Company™ and a global footwear leader, today announced financial results for the second quarter ended June 30, 2023.

Second Quarter Highlights

“Skechers second quarter results set a new quarterly sales record of $2.01 billion. This achievement continues to reflect the global demand for our comfort technology products, evidenced by double- or triple-digit sales growth in most markets. We saw increases of 20% in APAC, including 19% in China and 27% in India, as well as 16% in EMEA, including 29% in Germany and 13% in the UK,” began David Weinberg, Chief Operating Officer at Skechers. “Our strong gross margin of 52.7% was primarily driven by a higher proportion of Direct-to-Consumer sales, which grew 29%. We were able to deliver our product more effectively and improve our inventory levels, which enabled the robust sales across our comfortable, innovative, stylish and high-quality collections. As we look to the future and our goal of $10 billion in annual sales by 2026, we remain focused on improving distribution efficiencies, developing new categories including some that will be introduced later this year, enhancing our Direct-to-Consumer segment, and further expanding our international business, including the acquisition of our Scandinavian distributor, which we believe will deliver increased sales growth in the coming years.”

“The second quarter marked yet another sales record and a new milestone as we made the Fortune 500 list of largest companies, a testament to the strength of our brand and the dedication of our entire organization to consistently create, innovate and meet the footwear needs of consumers,” added Robert Greenberg, Chief Executive Officer of Skechers. “Not only are we outfitting the world in the most comfortable lifestyle footwear, but we are also offering high-performance golf and pickleball shoes, and delivering memorable collaborations like our iconic Rolling Stones collection in June and our Skechers x Ashley Park capsule launched just last week. We strongly believe in the importance of driving awareness of our vast offering. In this quarter alone, we introduced numerous targeted campaigns, including Skechers Uno with Doja Cat, one of Time’s 100 most influential people in 2023; Skechers Hands Free Slip-ins with football legend Tony Romo and Los Angeles Dodgers pitcher Clayton Kershaw, among others; as well as a brand spot with former A-Team star, Mr. T, who claims he’s the only ‘T’ in Skechers. The power of our marketing and the relevancy of our footwear resonates throughout our 4,700 Skechers stores around the world and at retailers, where consumers can slip into our footwear and leave with the understanding that they just purchased unbelievable comfort technology. This is what motivates the Skechers team — the enthusiasm from our partners around the world, and most importantly, the satisfaction from new shoppers and returning loyal fans of our brand. With this incredible momentum, I am confident in our vision for an even more successful future.”

Three Months Ended June 30,

Change

(in millions, except per share data)

2023

2022

$

%

Sales

$

2,012.5

$

1,867.8

144.7

7.7

Gross profit

1,060.5

897.6

162.9

18.2

Gross margin

52.7

%

48.1

%

460 bps

Operating expenses

842.8

743.4

99.4

13.4

As a % of sales

41.9

%

39.8

%

210 bps

Earnings from operations

217.7

154.2

63.5

41.2

Operating margin

10.8

%

8.3

%

260 bps

Net earnings

152.8

90.4

62.4

69.0

Diluted earnings per share

$

0.98

$

0.58

0.40

69.0

Second quarter sales increased 7.7% as a result of a 17.9% increase internationally and a 4.6% decrease domestically. Direct-to-Consumer increased 29.1% and Wholesale decreased 5.9%. On a constant currency basis, sales increased 9.1%.

Wholesale sales declined $67.3 million, or 5.9%, which includes a decrease in AMER of 18.7%, partially offset by increases in APAC of 14.3% and EMEA of 7.4%. Wholesale volume decreased 13.1% and average selling price increased 8.0%.

Direct-to-Consumer sales grew $212.0 million, or 29.1%, which includes increases in AMER of 28.2%, APAC of 25.1%, and EMEA of 47.2%. Direct-to-Consumer volume increased 23.8% and average selling price increased 4.4%.

Gross margin was 52.7%, an increase of 460 basis points, primarily due to a higher proportion of Direct-to-Consumer sales and higher average selling prices.

Operating expenses increased $99.4 million, or 13.4%, and as a percentage of sales increased 210 basis points to 41.9%. Selling expenses increased $20.5 million, or 12.3%, and as a percentage of sales increased 40 basis points to 9.3%. The increase was due to higher brand demand creation expenditures. General and administrative expenses increased $78.9 million, or 13.7%, and as a percentage of sales increased 170 basis points to 32.6%. Increased expenses were primarily driven by labor, increased facility costs, including rent and depreciation, and warehouse and distribution expenses.

Earnings from operations increased $63.5 million, or 41.2%, to $217.7 million.

Net earnings were $152.8 million and diluted earnings per share were $0.98 compared with prior year net earnings of $90.4 million and diluted earnings per share of $0.58.

In the second quarter, the Company’s effective income tax rate was 17.7%.

“Despite anticipated headwinds in the domestic wholesale market, we successfully navigated the challenges and achieved record quarterly sales in addition to a new second quarter earnings record,” stated John Vandemore, Chief Financial Officer of Skechers. “With sustained momentum in our Direct-to-Consumer business globally and broad-based strength in our international wholesale business, aided by healthy inventory levels and an innovative pipeline of comfort technology products, we continued to show the strength of the Skechers brand and to execute our long-term growth strategy.”

Six Months Ended June 30,

Change

(in millions, except per share data)

2023

2022

$

%

Sales

$

4,014.4

$

3,687.4

327.0

8.9

Gross profit

2,039.1

1,721.7

317.4

18.4

Gross margin

50.8

%

46.7

%

410 bps

Operating expenses

1,597.8

1,391.7

206.1

14.8

As a % of sales

39.8

%

37.7

%

210 bps

Earnings from operations

441.3

330.1

111.2

33.7

Operating margin

11.0

%

9.0

%

200 bps

Net earnings

313.2

211.6

101.6

48.0

Diluted earnings per share

$

2.00

$

1.35

0.65

48.1

Year-to-date sales increased 8.9% reflecting a 19.5% increase in international sales and a 4.7% decrease domestically. Direct-to-Consumer increased 27.1% and Wholesale decreased 1.0%. On a constant currency basis, sales increased 11.1%.

Wholesale sales decreased $24.0 million, or 1.0%, due to a decrease in AMER of 15.9%, partially offset by increases in EMEA of 14.6% and APAC of 19.2%. Wholesale volume decreased 7.3% and average selling price increased 6.6%.

Direct-to-Consumer sales grew $351.0 million, or 27.1%, due to increases in AMER of 28.4%, APAC of 21.7% and EMEA of 40.4%. Direct-to-Consumer volume increased 25.2% and average selling price increased 1.5%.

Gross margin was 50.8%, an increase of 410 basis points, primarily driven by a higher proportion of Direct-to-Consumer sales and higher average selling prices in Wholesale.

Operating expenses increased $206.1 million or 14.8%. As a percentage of sales, operating expenses increased 210 basis points to 39.8%. Selling expenses increased $40.9 million or 14.9%, primarily due to higher global demand creation expenditures. General and administrative expenses increased $165.3 million or 14.8%, primarily driven by labor, increased facility costs, including rent and depreciation, and warehouse and distribution expenses.

Earnings from operations increased $111.2 million to $441.3 million.

Net earnings were $313.2 million and diluted earnings per share were $2.00, an increase of 48.1% over the prior year.

The Company’s effective income tax rate was 18.1%.

Balance Sheet

Cash, cash equivalents and investments totaled $1.07 billion, an increase of $285.4 million, or 36.2% from December 31, 2022, primarily due to an increase in earnings and favorable changes in working capital, offset by capital expenditures of $147.4 million, payments of $70.4 million, net of cash acquired, related to the acquisition of our Scandinavian distributor and the completion of $60.0 million of share repurchases year-to-date.

Inventory was $1.49 billion, a decrease of $332.0 million or 18.3% from December 31, 2022.

Share Repurchase

During the second quarter, the Company repurchased approximately 579,475 shares of its Class A common stock at a cost of $30.0 million. Year-to-date 2023, the Company has repurchased nearly 1.3 million shares of its Class A common stock at a cost of $60.0 million. At June 30, 2023, approximately $365.7 million remained available under the Company’s share repurchase program.

Outlook

For the third quarter of 2023, the Company believes it will achieve sales between $1.95 billion and $2.0 billion and diluted earnings per share of between $0.70 and $0.75. Further, the Company believes that for the fiscal year 2023, it will achieve sales between $7.95 billion and $8.1 billion and diluted earnings per share of between $3.25 and $3.40.

Number of Stores

December 31, 2022

Opened ⁽¹⁾

Closed ⁽¹⁾

June 30, 2023

Domestic stores

539

21

(8

)

552

International stores

905

143

(56

)

992

Distributor, licensee and franchise stores

3,093

330

(262

)

3,161

Total Skechers stores

4,537

494

(326

)

4,705

⁽¹⁾ Includes the conversion of 58 third-party stores to International stores previously included in Distributor stores as a result of the acquisition of our Scandinavian distributor.

Second Quarter 2023 Conference Call

The Company will host a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss its second quarter 2023 financial results. The call can be accessed on the Investor Relations section of the Company’s website at investors.skechers.com. For those unable to participate during the live broadcast, a replay will be available beginning July 27, 2023, at 7:30 p.m. ET, through August 10, 2023, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13739533.

About Skechers U.S.A., Inc.

Skechers U.S.A., Inc., a Fortune 500^® company based in Southern California, designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. Collections from The Comfort Technology Company™ are available in approximately 180 countries and territories through department and specialty stores, and direct to consumers through digital stores, and over 4,700 Company- and third-party-owned physical retail stores. The Company manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, Twitter and TikTok.

Reference in this press release to “Sales” refers to Skechers’ net sales reported under GAAP. This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation, Skechers’ future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the disruption of business and operations due to the COVID-19 pandemic; delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of Russia’s war with Ukraine; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in Skechers’ annual report on Form 10-K for the year ended December 31, 2022 and its quarterly reports on Form 10-Q in 2023. Taking these and other risk factors associated with the COVID-19 pandemic into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS U.S.A., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

As of

As of

(in thousands)

June 30, 2023

December 31, 2022

ASSETS

Current assets

Cash and cash equivalents

$

896,514

$

615,733

Short-term investments

80,648

102,166

Trade accounts receivable, net

940,201

848,287

Other receivables

69,307

86,036

Inventory

1,486,012

1,818,016

Prepaid expenses and other

197,007

176,035

Total current assets

3,669,689

3,646,273

Property, plant and equipment, net

1,417,225

1,345,370

Operating lease right-of-use assets

1,230,635

1,200,565

Deferred tax assets

461,021

454,190

Long-term investments

96,591

70,498

Goodwill

101,483

93,497

Other assets, net

131,013

83,094

Total non-current assets

3,437,968

3,247,214

TOTAL ASSETS

$

7,107,657

$

6,893,487

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$

802,234

$

957,384

Accrued expenses

300,071

294,143

Operating lease liabilities

261,954

238,694

Current installments of long-term borrowings

76,388

103,184

Short-term borrowings

36,654

19,635

Total current liabilities

1,477,301

1,613,040

Long-term operating lease liabilities

1,069,384

1,063,672

Long-term borrowings

236,763

216,488

Deferred tax liabilities

20,224

8,656

Other long-term liabilities

112,523

120,045

Total non-current liabilities

1,438,894

1,408,861

Total liabilities

2,916,195

3,021,901

Stockholders’ equity

Preferred Stock

—

—

Class A Common Stock

134

134

Class B Common Stock

20

21

Additional paid-in capital

362,769

403,799

Accumulated other comprehensive loss

(87,707

)

(84,897

)

Retained earnings

3,564,133

3,250,931

Skechers U.S.A., Inc. equity

3,839,349

3,569,988

Noncontrolling interests

352,113

301,598

Total stockholders’ equity

4,191,462

3,871,586

TOTAL LIABILITIES AND EQUITY

$

7,107,657

$

6,893,487

SKECHERS U.S.A., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except per share data)

2023

2022

2023

2022

Sales

$

2,012,516

$

1,867,804

$

4,014,444

$

3,687,398

Cost of sales

951,992

970,225

1,975,341

1,965,656

Gross profit

1,060,524

897,579

2,039,103

1,721,742

Operating expenses

Selling

187,118

166,609

315,678

274,818

General and administrative

655,673

576,812

1,282,115

1,116,862

Total operating expenses

842,791

743,421

1,597,793

1,391,680

Earnings from operations

217,733

154,158

441,310

330,062

Other income (expense)

2,792

(19,259

)

12,715

(25,005

)

Earnings before income taxes

220,525

134,899

454,025

305,057

Income tax expense

38,942

28,739

82,158

62,731

Net earnings

181,583

106,160

371,867

242,326

Less: Net earnings attributable to noncontrolling interests

28,824

15,756

58,665

30,699

Net earnings attributable to Skechers U.S.A., Inc.

$

152,759

$

90,404

$

313,202

$

211,627

Net earnings per share attributable to Skechers U.S.A., Inc.

Basic

$

0.99

$

0.58

$

2.02

$

1.36

Diluted

$

0.98

$

0.58

$

2.00

$

1.35

Weighted-average shares used in calculating net earnings per share attributable to Skechers U.S.A., Inc.

Basic

154,970

155,941

155,055

155,969

Diluted

156,571

156,748

156,654

157,074

SKECHERS U.S.A., INC. AND SUBSIDIARIES

Supplemental Financial Information

(Unaudited)

Three Months Ended June 30,

Change

(in millions)

2023

2022

$

%

Wholesale sales

$

1,073.0

$

1,140.3

(67.3

)

(5.9

)

Gross profit

431.5

414.5

17.0

4.1

Gross margin

40.2

%

36.3

%

390 bps

Direct-to-Consumer sales

$

939.5

$

727.5

212.0

29.1

Gross profit

629.0

483.1

145.9

30.2

Gross margin

66.9

%

66.4

%

50 bps

Total sales

$

2,012.5

$

1,867.8

144.7

7.7

Gross profit

1,060.5

897.6

162.9

18.2

Gross margin

52.7

%

48.1

%

460 bps

Six Months Ended June 30,

Change

(in millions)

2023

2022

$

%

Wholesale sales

$

2,367.6

$

2,391.6

(24.0

)

(1.0

)

Gross profit

943.5

869.4

74.1

8.5

Gross margin

39.9

%

36.4

%

350 bps

Direct-to-Consumer sales

$

1,646.8

$

1,295.8

351.0

27.1

Gross profit

1,095.6

852.3

243.3

28.5

Gross margin

66.5

%

65.8

%

70 bps

Total sales

$

4,014.4

$

3,687.4

327.0

8.9

Gross profit

2,039.1

1,721.7

317.4

18.4

Gross margin

50.8

%

46.7

%

410 bps

Three Months Ended June 30,

Change

(in millions)

2023

2022

$

%

Geographic sales

Domestic

Wholesale

$

390.8

$

521.0

(130.2

)

(25.0

)

Direct-to-Consumer

411.1

319.5

91.6

28.7

Total domestic sales

801.9

840.5

(38.6

)

(4.6

)

International

Wholesale

682.2

619.3

62.9

10.2

Direct-to-Consumer

528.4

408.0

120.4

29.5

Total international sales

1,210.6

1,027.3

183.3

17.9

Total sales

$

2,012.5

$

1,867.8

144.7

7.7

Regional sales

Americas (AMER)

$

1,027.0

$

1,033.9

(6.9

)

(0.7

)

Europe, Middle East & Africa (EMEA)

433.3

374.5

58.8

15.7

Asia Pacific (APAC)

552.2

459.4

92.8

20.2

Total sales

$

2,012.5

$

1,867.8

144.7

7.7

China sales

$

302.4

$

254.9

47.5

18.6

Distributor sales

$

99.8

$

128.4

(28.6

)

(22.3

)

Six Months Ended June 30,

Change

(in millions)

2023

2022

$

%

Geographic sales

Domestic

Wholesale

$

832.7

$

1,059.6

(226.9

)

(21.4

)

Direct-to-Consumer

710.0

559.0

151.0

27.0

Total domestic sales

1,542.7

1,618.6

(75.9

)

(4.7

)

International

Wholesale

1,534.9

1,332.0

202.9

15.2

Direct-to-Consumer

936.8

736.8

200.0

27.1

Total international sales

2,471.7

2,068.8

402.9

19.5

Total sales

$

4,014.4

$

3,687.4

327.0

8.9

Regional sales

Americas (AMER)

$

1,972.9

$

1,980.8

(7.9

)

(0.4

)

Europe, Middle East & Africa (EMEA)

967.8

815.7

152.1

18.6

Asia Pacific (APAC)

1,073.7

890.9

182.8

20.5

Total sales

$

4,014.4

$

3,687.4

327.0

8.9

China sales

$

584.4

$

527.9

56.5

10.7

Distributor sales

$

203.8

$

225.4

(21.6

)

(9.6

)

SKECHERS U.S.A., INC. AND SUBSIDIARIES

Reconciliation of GAAP Earnings Financial Measures to Corresponding Non-GAAP Financial Measures

(Unaudited)

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current period local currency financial results using the prior-period exchange rates and comparing these adjusted amounts to our prior period reported results.

Three Months Ended June 30,

2023

2022

Change

(in millions, except per share data)

Reported GAAP Measure

Constant Currency Adjustment

Adjusted for Non-GAAP Measures

Reported GAAP Measure

$

%

Sales

$

2,012.5

$

24.6

$

2,037.1

$

1,867.8

169.3

9.1

Cost of sales

952.0

9.6

961.6

970.2

(8.6

)

(0.9

)

Gross profit

1,060.5

15.0

1,075.5

897.6

177.9

19.8

Operating expenses

842.8

9.3

852.1

743.4

108.7

14.6

Earnings from operations

217.7

5.7

223.4

154.2

69.2

44.9

Other income (expense)

2.8

(4.4

)

(1.6

)

(19.3

)

17.7

(91.7

)

Income tax expense

38.9

1.1

40.0

28.7

11.3

39.4

Less: Noncontrolling interests

28.8

1.5

30.3

15.8

14.5

91.8

Net earnings

$

152.8

$

(1.3

)

$

151.5

$

90.4

61.1

67.6

Diluted earnings per share

$

0.98

$

(0.01

)

$

0.97

$

0.58

0.39

67.2

Six Months Ended June 30,

2023

2022

Change

(in millions, except per share data)

Reported GAAP Measure

Constant Currency Adjustment

Adjusted for Non-GAAP Measures

Reported GAAP Measure

$

%

Sales

$

4,014.4

$

83.9

$

4,098.3

$

3,687.4

410.9

11.1

Cost of sales

1,975.3

44.1

2,019.4

1,965.7

53.7

2.7

Gross profit

2,039.1

39.8

2,078.9

1,721.7

357.2

20.7

Operating expenses

1,597.8

27.4

1,625.2

1,391.7

233.5

16.8

Earnings from operations

441.3

12.4

453.7

330.1

123.6

37.4

Other income (expense)

12.8

(17.3

)

(4.5

)

(25.1

)

20.6

(82.1

)

Income tax expense

82.2

2.4

84.6

62.7

21.9

34.9

Less: Noncontrolling interests

58.7

3.2

61.9

30.7

31.2

101.6

Net earnings

$

313.2

$

(10.5

)

$

302.7

$

211.6

91.1

43.1

Diluted earnings per share

$

2.00

$

(0.07

)

$

1.93

$

1.35

0.58

43.0

Investor Relations

Eunice Han

[email protected]

Press

Jennifer Clay

[email protected]

Source: Skechers U.S.A., Inc.