by Zach | Aug 29, 2019 | Press Release
Aug 29, 2019 • 4:05 pm EDT
MANHATTAN BEACH, Calif.—August 29, 2019– SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader, today announced its participation in the Goldman Sachs 26th Annual Global Retailing Conference taking place at the Grand Hyatt New York. The Company will participate in a fireside chat on Wednesday, September 4, 2019, at 3:10pm ET.
The audio portion of the fireside chat will be available live and on replay for 90 days at the Investor Relations section of the Company’s Website at www.skx.com.
About SKECHERS USA, Inc.
Based in Manhattan Beach, California, Skechers designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 170 countries and territories worldwide via department and specialty stores, more than 3,170 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, and throughout Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and Twitter.
Reference in this press release to “Sales” refers to Skechers’ net sales reported under generally accepted accounting principles in the United States. This announcement also contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 be,” “will continue,” “will result,” “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 international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, 2018, and its quarterly report on Form 10-Q for the three months ended June 30, 2019. 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 the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses 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.
Company Contact:
David Weinberg
Chief Operating Officer
John Vandemore
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100
Investor Relations:
Andrew Greenebaum
Addo Investor Relations
(310) 829-5400
Press: Jennifer Clay
Vice President, Corporate Communications
(310) 318-3100
Source: SKECHERS USA, Inc.
by Zach | Aug 26, 2019 | Press Release
Aug 26, 2019 • 9:00 am EDT
Skechers Earns Fifth Award for its Collection of Hyper Burst™ Running Shoes
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
The Skechers GO RUN Razor 3 Hyper™ performance training shoe takes Runner’s World top honor as it’s awarded “Gear of the Year” in its September/October 2019 issue. Featuring the innovative Skechers-developed Hyper Burst™ midsole foam, the shoe was previously named “Editors’ Choice” in a Runner’s World cover story earlier this year.
Skechers GO RUN Razor 3 Hyper™ named “Gear of the Year” by Runner’s World editors in September/October 2019 issue. (Photo: Business Wire)
Skechers GO RUN Razor 3 Hyper™ named “Gear of the Year” by Runner’s World editors in September/October 2019 issue. (Photo: Business Wire)
Runner’s World editors awarded the Skechers GO RUN Razor 3 Hyper because of its innovative new midsole and performance that ranked highly among wear-testers. It also stood out by offering responsive cushioning that felt protective for such a lightweight shoe. Products that earn the “Gear of the Year” award are selected from the past year’s “Editors’ Choice” winners and rank at the top not only in on-the-road testing, but also in measurements at the magazine’s shoe lab, as well as in delivering excellent value for the runner.
“It’s been an incredible year for our Hyper Burst performance running shoes,” said Michael Greenberg, president of Skechers. “Runner’s World naming the Skechers GO RUN Razor 3 Hyper an ‘Editors’ Choice’ in the Spring marked a new era for our Performance Division, but to be back in the magazine as best of the best on the ‘Gear of the Year’ list is a true honor. Our team of designers introduced a groundbreaking evolution with Hyper Burst, which is now found in a range of styles throughout our collection. This recognition serves as a reminder that every type of runner can turn to Skechers for shoes that are lightweight, while still offering the comfort and support they desire.”
Introduced by the Skechers Performance Division in November 2018, the foundation of the 6.4 oz. Skechers GO RUN Razor 3 Hyper is the Hyper Burst midsole, which is made using a “super critical™” foaming process to create spherically-shaped cells in tight format. It is the lightest and most resilient midsole foam that Skechers Performance has offered to date. The unique irregular cell structure is unlike most other EVA foams on the market today.
The style also features a durable, translucent engineered monomesh upper that ensures support and breathability, plus strategically-placed rubber on the outsole for durability and traction. A seamless upper construction helps enhance comfort, while the signature M-Strike technology helps promote a midfoot strike for greater efficiency in every stride. It’s a versatile fast trainer or race-day shoe.
Styles featuring Hyper Burst have been consistently earning awards this year. Outside named Skechers GO RUN 7 Hyper™ “Gear of the Year” for the road running category in its Summer 2019 Buyer’s Guide. And Skechers made a big impression at the Outdoor Retailer 2019 show with their upcoming road running shoe—Skechers GO RUN Maxroad 4 Hyper™—earning two editorial awards, “Best of Outdoor Retailer” award by Shape magazine, as well as “Editors’ Choice Outdoor Retailer” by Runner’s World.
The Skechers Performance division was established when Meb Keflezighi wore the first model of Skechers GO RUN in 2012, and the collection has earned respect throughout the running world and won numerous awards within the footwear industry. Skechers Elite runner Edward Cheserek trains, races and has won numerous events in products featuring the new Hyper Burst midsole.
The Skechers GO RUN collection for men and women is available at Skechers retail stores and skechers.com, as well as select retail partners.
About SKECHERS USA, Inc.
Based in Manhattan Beach, California, Skechers (NYSE:SKX) designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 170 countries and territories worldwide via department and specialty stores, more than 3,170 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, and throughout Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and Twitter.
This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 be,” “will continue,” “will result,” “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 international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, 2018, and its quarterly report on Form 10-Q for the three months ended June 30, 2019. 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 the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses 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.
Jennifer Clay
SKECHERS USA, Inc.
[email protected]
Source: SKECHERS USA, Inc.
by Zach | Aug 14, 2019 | Press Release
Aug 14, 2019 • 9:00 am EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
Skechers (NYSE: SKX) announced today that it has donated more than $4.23 million to animal welfare organizations through its BOBS for Dogs and BOBS for Cats collections. Since 2014, the funds have helped more than 750,000 pets in the United States, which includes more than 396,000 dogs and cats saved through adoptions.
Skechers has helped save 396,000+ animals through its BOBS for Dogs and BOBS for Cats collections. (Photo: Business Wire)
Skechers has helped save 396,000+ animals through its BOBS for Dogs and BOBS for Cats collections. (Photo: Business Wire)
Since Skechers’ partnership with Petco Foundation began in January 2019, the Company has helped save more than 155,000 animals, a new lifesaving record for the BOBS for Dogs brand. Through more than $830,000 in donations to Petco Foundation, the Company has supported more than 63,500 animal adoptions at local shelters and rescues nationwide, over 86,900 adoptions at Petco stores, community-wide adoption events that have found loving homes for more than 5,000 pets, and more than 11,000 spay and neuter surgeries.
“We are thrilled and inspired to see how substantial an impact our collaboration with Petco Foundation has had in such a short period of time,” said Michael Greenberg, president of Skechers. “It’s really thanks to all of our consumers, their impassioned commitment to our shared cause—and all of the creative ways that we have built our partnership with Petco Foundation to make a greater difference.”
Through its collaboration, Skechers and Petco Foundation have employed a wide range of donation-raising strategies to advance the animal life-saving movement: promoting BOBS for Dogs’ popular shelter pet styles and cartooned animal mosaic casuals; expanding its animal-themed casual and sleepwear collections; and coordinating Petco-exclusive pet accessories with BOBS shoes at Petco locations in the United States—the most successful product that the pet company has ever carried for people at its stores. The partners are also looking to expand this successful charity strategy to Canada in 2020 in support of the thousands of shelter pets in need throughout the country.
“Skechers is unique because the company has the ambition of a strategic global brand and the heart of a non-profit charity organization,” said Susanne Kogut, president of the Petco Foundation. “Since the beginning, they’ve shown a strong interest in hitting the ground giving and making a difference in new, impactful ways. We’re excited to pursue new lifesaving records this year and hope to save more shelter pets than ever with their continued support.”
For each pair of specially packaged BOBS shoes and apparel sold online and in retail stores throughout the United States, and coordinating BOBS shoes and pet accessories sold at Petco.com and select Petco stores nationwide, twenty-five cents is donated to the Petco Foundation to help animal welfare and rescue organizations save and support shelter pets across the United States. To learn more, follow BOBS from Skechers on Facebook, Twitter, Instagram and Pinterest, or visit www.BOBSfromSKECHERS.com.
About SKECHERS USA, Inc.
Based in Manhattan Beach, California, Skechers designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 170 countries and territories worldwide via department and specialty stores, more than 3,170 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, and throughout Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and Twitter.
About Petco and the Petco Foundation
Petco is a leading pet specialty retailer with more than 50 years of service to pet parents. Everything we do is guided by our vision for Healthier Pets. Happier People. Better World. We operate more than 1,500 Petco and Unleashed by Petco locations across the U.S., Mexico and Puerto Rico; complete pet care services and veterinary advice through PetCoach; and petco.com. The Petco Foundation, an independent nonprofit organization, has invested more than $250 million since it was created in 1999 to help promote and improve the welfare of companion animals. In conjunction with the Foundation, we work with and support thousands of local animal welfare groups across the country and, through in-store adoption events, help find homes for more than 400,000 animals every year.
This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 be,” “will continue,” “will result,” “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 international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, 2018, and its quarterly report on Form 10-Q for the three months ended June 30, 2019. 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 the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses 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.
Jennifer Clay
SKECHERS USA, Inc.
[email protected]
Petco
Ventura Olvera
[email protected]
Petco Foundation
Lisa Lane
[email protected]
Source: Skechers USA., Inc.
by Zach | Jul 23, 2019 | Press Release
Jul 23, 2019 • 9:00 am EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
While few can fill Shaquille O’Neal’s size 22 shoes, Skechers is giving kids a chance to try through a new collaboration with the basketball legend. The Shaq by Skechers collection is the first-ever line of kids’ athletic footwear designed especially for the basketball court under the Skechers Kids brand.
Skechers launches the Shaq by Skechers collection, Skechers Kids’ first-ever line of shoes for the basketball court. (Photo: Business Wire)
Skechers launches the Shaq by Skechers collection, Skechers Kids’ first-ever line of shoes for the basketball court. (Photo: Business Wire)
“I think kids are going to love the way the new styles look and they’ll love playing in them even more,” said Shaquille O’Neal. “These boys and girls might not be dunking yet, but I can’t wait to see them posting up in their new Shaq by Skechers footwear!”
“This all-new children’s basketball collection is an important addition to our offering, so it’s only fitting that we’re launching with the help of one of the biggest and best players in NBA history,” said Michael Greenberg, president of Skechers. “Fans everywhere continue to enjoy Shaq’s enthusiasm for the sport, so we know kids will be excited to wear his shoes while on the court or at play. We couldn’t ask for a better ambassador to help us bring athletic footwear to elementary and middle schoolers in a new and exciting way.”
The collection’s core styles are available in three colorways and utilize premium materials with leather and knitted upper options plus lightweight midsoles and rubber outsoles for grip and durability. The mid-height sneakers feature a lace-up closure, with one of the styles offering a wide single strap for an easy, adjustable and snug fit. Every style includes the Shaq by Skechers mark and iconic dunking Shaq logo.
Shaquille O’Neal is considered to be one of the most dominant basketball players in history. At 7 feet, 1 inch tall, Shaq’s larger-than-life personality and powerful athleticism have garnered passionate global fan bases across sports and entertainment. O’Neal played for six teams throughout his 19-year professional basketball career, winning three consecutive championships with the Los Angeles Lakers in 2000, 2001, and 2002, as well as a fourth with the Miami Heat in 2006. He is one of only three players to win the MVP, All-Star game MVP and Finals MVP awards in the same year. O’Neal currently appears as an analyst on TNT’s Inside The NBA.
The Shaq by Skechers basketball footwear collection is available now in the United States at Skechers retail stores, www.skechers.com and select retail partners. The collection will land in Canada, Europe, Latin America and Israel later this year.
About Skechers U.S.A., Inc.
Based in Manhattan Beach, California, Skechers (NYSE:SKX) designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 170 countries and territories worldwide via department and specialty stores, more than 3,170 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, and throughout Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and Twitter.
This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 be,” “will continue,” “will result,” “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 international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, 2018 and its quarterly report on Form 10-Q for the three months ended March 31, 2019. 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 the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses 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.
Jennifer Clay
SKECHERS USA
[email protected]
(310) 937-1326
Source: Skechers U.S.A., Inc.
by Zach | Jul 18, 2019 | Press Release
Jul 18, 2019 • 4:05 pm EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader, today announced financial results for the second quarter ended June 30, 2019.
Second Quarter Highlights
“As the world continues to become closer and digital becomes a critical means of communicating and embracing trends to tell your brand’s story, it’s no longer what is happening in one market that matters; it’s what’s happening across all markets. We’re continuing to strategically view our business with a global lens as trends are traveling faster,” stated Robert Greenberg, chief executive officer of Skechers. “Specifically, many of our key product styles are introduced at virtually the same time around the world, with nuances in certain markets, giving us the ability to replicate our success around the globe. In the second quarter, we saw this with the broad acceptance of our women’s and men’s sport and streetwear lines, as well as with the resurgence of our GOwalk collection and our fresh new Skech-Air styles. Our focus continues to be on comfort, innovation, style and quality as we design our diverse collection. Our efforts in the Skechers Performance division resulted in three awards in the second quarter—Gear of the Year from Outside Magazine for Skechers GO Run 7 Hyper, and Best of Outdoor Retailer from Shape and Editors’ Choice Outdoor Retailer from Runner’s World for our Skechers GO Run Maxroad 4 Hyper. Our efforts also paid off with total sales increases of 10.9 percent, the result of a 19.8 percent increase in our international business and a 1.5 percent increase in our domestic business. Now in the third quarter, we are delivering our back-to-school and fall offerings, and believe we have fresh styles in our core accounts that will drive growth, while we also deliver some unique and limited-edition styles in select doors that will create additional excitement for the Skechers brand.”
“Skechers’ record second quarter sales are a testament to the demand and strength for our brand and products,” began David Weinberg, chief operating officer of Skechers. “We experienced growth in every region, with the biggest dollar increases coming from India, the Middle East and China, as well as in Mexico with the conversion of the business to a joint venture. In our direct-to-consumer channels, we saw monthly sales increases in the quarter, an upward trend that’s continuing in July. Based on feedback from recent account meetings, we are seeing a similar trend within our domestic wholesale business in June and July and continue to believe we’ll have a stronger back half of the year. To support this growth, we are investing in our global infrastructure—including our ecommerce platforms and distribution centers, and designing and developing new products for 2020. As we look forward to the back-to-school and holiday selling seasons, we believe our momentum will continue worldwide.”
Second Quarter 2019 Financial Results
($ in millions, except per share data)
For the three-months ended
June 30,
Change
2019
2018
$
%
Sales
$
1,258.6
$
1,134.8
$
123.8
10.9
%
Gross Profit
609.8
561.0
48.8
8.7
%
Gross Margin
48.5
%
49.4
%
SG&A Expenses
505.1
484.9
20.2
4.2
%
As a % of Sales
40.1
%
42.7
%
Earnings from Operations
111.1
81.4
29.7
36.5
%
Operating Margin
8.8
%
7.2
%
Net Earnings
75.2
45.3
29.9
66.0
%
Diluted Earnings per Share
$
0.49
$
0.29
$
0.20
69.0
%
Sales grew 10.9 percent as a result of a 19.8 percent increase in the Company’s international business and 1.5 percent in its domestic business. On a constant currency basis, the Company’s sales increased 13.7 percent. By segments, the Company’s international wholesale business increased 18.2 percent, its Company-owned global direct-to-consumer business increased 14.4 percent, and the Company’s domestic wholesale business decreased 3.8 percent. Comparable same store sales in Company-owned stores and e-commerce increased 4.9 percent, including 4.2 percent in the United States and 6.7 percent internationally.
Gross margins decreased as a result of promotional efforts to clear seasonal merchandise in select international markets. This was partially offset by higher domestic margins from improved retail pricing and product mix in our direct-to-consumer and domestic wholesale businesses.
SG&A expenses increased 4.2 percent in the quarter. Selling expenses decreased by $0.5 million due to a lower advertising spend in the United States. General and administrative expenses increased by $20.7 million but decreased as a percentage of sales by 160 basis points. The dollar increase reflects additional spending of $18.5 million associated with the opening of 39 additional Company-owned Skechers stores, including 12 that opened in the second quarter, and $4.6 million associated with higher distribution costs in our subsidiaries, a result of increased sales.
Earnings from operations increased $29.7 million, or 36.5 percent, to $111.1 million.
Net earnings were $75.2 million and diluted earnings per share were $0.49. In the second quarter, the Company’s effective income tax rate was 18.4 percent.
Six months 2019 Financial Results
($ in millions, except per share data)
For the six-months ended
June 30,
Change
2019
2018
$
%
Sales
$
2,535.3
$
2,384.9
$
150.4
6.3
%
Gross Profit
1,200.3
1,144.1
56.2
4.9
%
Gross Margin
47.3
%
48.0
%
SG&A Expenses
934.9
924.8
10.1
1.1
%
As a % of Sales
36.9
%
38.8
%
Earnings from Operations
276.9
230.2
46.7
20.3
%
Operating Margin
10.9
%
9.7
%
Net Earnings
183.9
162.9
21.0
12.9
%
Diluted Earnings per Share
$
1.19
$
1.04
$
0.15
14.4
%
For the six-month period, sales grew 6.3 percent, or 9.3 percent on a constant currency basis. By segments, the Company’s international wholesale business increased 12.9 percent, its Company-owned direct-to-consumer business increased 11.0 percent and its domestic wholesale business decreased 7.7 percent. The Company’s international business grew 14.2 percent while its domestic business decreased by 2.5 percent.
Gross margins decreased as a result of promotional efforts to clear seasonal inventory in select international markets.
SG&A expenses increased 1.1 percent. This increase was due to an additional $24.9 million in general and administrative expenses mainly attributable to opening 39 company-owned stores, partially offset by a decrease in selling expenses of $14.8 million from lower domestic advertising.
Earnings from operations increased $46.7 million, or 20.3 percent, to $276.9 million.
Net earnings were $183.9 million and diluted earnings per share were $1.19.
Balance Sheet
At quarter-end, cash, cash equivalents and investments totaled $973.0 million, a decrease of $92.9 million, or 8.7 percent from December 31, 2018, and an increase of $61.3 million, or 6.7 percent, compared to June 30, 2018.
Total inventory, including inventory in transit, was $855.6 million, a $7.6 million decrease from December 31, 2018, and a $33.2 million increase over June 30, 2018. The majority of the year-over-year inventory increase is attributable to growth in our international wholesale business.
Working capital was $1.587 billion at June 30, 2019, a $128.2 million decrease over December 31, 2018, and a $78.8 million decrease from June 30, 2018, partially attributable to the inclusion of current liabilities totaling $170.9 million arising from the adoption of ASU 842 in the first quarter of 2019.
“In the second quarter, we continued to successfully execute against our strategy by growing both our international and direct to consumer businesses,” said John Vandemore, chief financial officer of Skechers. “Our product continues to resonate worldwide, and we are committed to investing in our global infrastructure and operational capabilities to meet consumer demand for the Skechers brand. This includes the construction of our first distribution center in China, the expansion of our North American distribution capabilities, the upgrade of our European logistics center and the further development of our direct-to-consumer offerings, both in e-commerce and in our retail stores. These strategic investments will benefit both our future sales growth and provide us an opportunity to execute against our long-term operating margin targets.”
Share Repurchase
During the three months ended June 30, 2019, the Company repurchased approximately 511,000 shares of its Class A common stock at a cost of $15.0 million under its existing share repurchase program. At June 30, 2019, approximately $20.0 million remained available under the Company’s share repurchase program.
Outlook
For the third quarter of 2019, the Company believes it will achieve sales in the range of $1.325 billion to $1.350 billion, and diluted earnings per share of $0.65 to $0.70. The guidance is based on expected growth in each of the Company’s three segments. The Company expects its full-year effective tax rate to be between 17 and 20 percent.
Store Count
Number of
Store
Locations as
of March 31,
2019
Opened
Closed
Number of
Store
Locations as
of June 30,
2019
Store count
Company-owned domestic stores
474
4
(1)
477
Company-owned international stores
284
8
(1)
291
Joint-venture stores
227
87
(1)
(8)
306
Distributor, licensee and franchise stores
2,075
141
(118)
(1)
2,098
Total Skechers stores
3,060
240
(128)
3,172
(1) Includes the conversion of 75 distributor-owned stores in Mexico to joint venture-owned.
Second Quarter 2019 Conference Call
The Company will host a conference call today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to discuss its second quarter 2019 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 18, 2019, at 7:30 p.m. ET, through August 1, 2019, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13692115.
About SKECHERS USA, Inc.
Based in Manhattan Beach, California, Skechers designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 170 countries and territories worldwide via department and specialty stores, more than 3,170 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, and throughout Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, and Twitter.
Reference in this press release to “Sales” refers to Skechers’ net sales reported under generally accepted accounting principles in the United States. This announcement also contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 be,” “will continue,” “will result,” “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 international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, 2018, and its quarterly report on Form 10-Q for the three months ended March 31, 2019. 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 the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses 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)
(In thousands)
June 30,
December 31,
2019
2018
ASSETS
Current Assets:
Cash and cash equivalents
$
779,281
$
872,237
Short-term investments
104,271
100,029
Trade accounts receivable, net
641,431
501,913
Other receivables
44,768
55,683
Total receivables
686,199
557,596
Inventories
855,627
863,260
Prepaid expenses and other current assets
67,165
79,018
Total current assets
2,492,543
2,472,140
Property, plant and equipment, net
683,254
585,457
Operating lease right-of-use assets
996,774
–
Deferred tax assets
52,510
39,431
Long-term investments
89,486
93,745
Other assets
106,669
37,482
Total non-current assets
1,928,693
756,115
TOTAL ASSETS
$
4,421,236
$
3,228,255
LIABILITIES AND EQUITY
Current Liabilities:
Current installments of long-term borrowings
$
3,986
$
1,666
Accounts payable
640,170
679,553
Operating lease liabilities
170,899
–
Short-term borrowings
9,998
7,222
Accrued expenses
169,520
161,781
Total current liabilities
994,573
850,222
Long-term borrowings, net of current installments
100,024
88,119
Long-term operating lease liabilities
904,205
–
Deferred tax liabilities
442
451
Other long-term liabilities
98,319
100,188
Total non-current liabilities
1,102,990
188,758
Total liabilities
2,097,563
1,038,980
Stockholders’ equity:
Skechers U.S.A., Inc. equity
2,132,907
2,034,958
Noncontrolling interests
190,766
154,317
Total equity
2,323,673
2,189,275
TOTAL LIABILITIES AND EQUITY
$
4,421,236
$
3,228,255
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Net sales
$
1,258,565
$
1,134,797
$
2,535,321
$
2,384,875
Cost of sales
648,730
573,840
1,334,977
1,240,815
Gross profit
609,835
560,957
1,200,344
1,144,060
Royalty income
6,341
5,350
11,542
10,872
616,176
566,307
1,211,886
1,154,932
Operating expenses:
Selling
113,507
114,022
183,721
198,468
General and administrative
391,588
370,927
751,220
726,308
505,095
484,949
934,941
924,776
Earnings from operations
111,081
81,358
276,945
230,156
Other income (expense):
Interest, net
1,162
1,054
3,027
731
Other, net
553
(7,473
)
(4,433
)
(4,070
)
1,715
(6,419
)
(1,406
)
(3,339
)
Earnings before income tax expense
112,796
74,939
275,539
226,817
Income tax expense
20,798
14,080
52,521
28,700
Net earnings
91,998
60,859
223,018
198,117
Less: Net earnings attributable to
noncontrolling interests
16,818
15,575
39,079
35,181
Net earnings attributable to
Skechers U.S.A., Inc.
$
75,180
$
45,284
$
183,939
$
162,936
Net earnings per share attributable to
Skechers U.S.A., Inc.:
Basic
$
0.49
$
0.29
$
1.20
$
1.04
Diluted
$
0.49
$
0.29
$
1.19
$
1.04
Weighted average shares used in calculating
earnings per share attributable to
Skechers U.S.A., Inc.:
Basic
153,413
156,518
153,446
156,476
Diluted
153,912
157,091
154,051
157,366
SKECHERS U.S.A., INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES
(unaudited)
(In thousands, except per share data)
Constant Currency Sales
Three months ended June 30,
2019
2018
Change
Reported GAAP Measure
Constant Currency Adjustment (1)
Adjusted for Non GAAP Measure
Reported GAAP Measure
$
%
Net Sales
$1,258,565
$31,831
$1,290,396
$1,134,797
$155,599
13.7%
Constant Currency Sales
Six months ended June 30,
2019
2018
Change
Reported GAAP Measure
Constant Currency Adjustment (1)
Adjusted for Non GAAP Measure
Reported GAAP Measure
$
%
Net Sales
$2,535,321
$70,786
$2,606,107
$2,384,875
$221,232
9.3%
Certain Non-GAAP Measures
We use the non-GAAP financial measures discussed above to evaluate our results of operations, financial condition, liquidity and indebtedness. We believe that the presentation of these non-GAAP measures provides useful information to investors regarding financial and business trends related to our results of operations, cash flows and indebtedness and that when this non-GAAP financial information is viewed with our GAAP financial information, investors are provided with 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 operating performance and liquidity. In addition, these non-GAAP measures address questions the company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data the company has determined that it is appropriate to make this data available to all investors. None of the non-GAAP measures presented should be considered as an alternative to net income or loss, operating income, cash flows from operating activities, total indebtedness or any other measures of operating performance and financial condition, liquidity or indebtedness derived in accordance with GAAP. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
Constant Currency Adjustment (1)
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.
Company Contact:
David Weinberg
Chief Operating Officer
John Vandemore
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100
Investor Relations:
Andrew Greenebaum
Addo Investor Relations
(310) 829-540
Press:
Jennifer Clay
Vice President,
Corporate Communications
(310) 318-3100
Source: SKECHERS USA, Inc.