by | Oct 22, 2008 | Press Release
Oct 22, 2008 • 4:00 pm EDT
— Record Third Quarter 2008 Net Sales of $403.2 Million; — Record Nine Month 2008 Net Sales of $1.143 Billion; — Third Quarter 2008 Net Earnings of $28.3 Million
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle footwear, today announced financial results for the quarter ended September 30, 2008.
Net sales for the third quarter of 2008 were $403.2 million compared to $395.0 million in the third quarter of 2007. Net earnings for the quarter were $28.3 million versus net earnings of $24.7 million in the third quarter of 2007. Net earnings per diluted share were $0.60 on 46.8 million diluted shares outstanding, versus diluted earnings per share of $0.53 on 46.7 million diluted shares outstanding for the third quarter of 2007. Earnings for the third quarter of 2008 reflects a tax benefit resulting from an advance pricing agreement reached with the Internal Revenue Service during the quarter, which will lower the Company’s ongoing effective annual tax rate from 34 percent to 27 percent.
“SKECHERS broke its quarterly sales record with its first $400 million-plus quarter, an achievement made during a soft retail environment,” stated Fred Schneider, chief financial officer of SKECHERS. “Although we achieved record revenues, we did not grow quite to the degree that we had expected in our domestic, international and retail businesses due to the economic climate. However, based on our high single-digit backlog increase and reports from our key retailers, we believe that our product is well-positioned in the marketplace and will withstand the current economic challenges.”
For the nine months ended September 30, 2008 net sales were $1.143 billion compared to net sales of $1.092 billion in the first nine months of 2007. Net earnings for the first nine months were $75.8 million compared to net earnings of $63.6 million in the first nine months of 2007. Net earnings per diluted share in the first nine months of 2008 were $1.62 per share on 46.8 million diluted shares outstanding, versus $1.37 per share on 46.8 million diluted shares outstanding for the same period last year.
Gross profit for the third quarter of 2008 was $171.5 million compared to $171.7 million in the third quarter of 2007. Gross margin was 42.5 percent for the third quarter of 2008 compared to 43.5 percent in the third quarter of 2007. Gross profit for the first nine months of 2008 reached $500.9 million or 43.8 percent of net sales versus $472.7 million or 43.3 percent of net sales in the first nine months of 2007.
Robert Greenberg, chief executive officer of SKECHERS, said: “Our first $400 million-plus sales quarter is a reflection of the strength of our back-to-school and fall collections supported by our advertising efforts. The incredible diversity of our product offerings and our affordable price points has allowed us to maintain our position in the market during this very difficult environment. Our core SKECHERS product lines remain solid, and our fashion lines have shown double-digit growth. The addition of Punkrose and Public Royalty has broadened our offering with a junior sneaker business for women and men. Our product is in place and we’re supporting it with a multi-level marketing campaign that also utilizes the power of American Idol winner David Cook for SKECHERS and High School Musical star Vanessa Hudgens for Red by Marc Ecko. We believe our image and product resonates with consumers globally, and we are continuing to experience growth in international markets around the world. We are particularly pleased with our position in Europe, as well as in Brazil where we launched last year, and in China and Hong Kong, both of which we are now joint ventures. We will continue to build great product that is relevant for the global footwear market, and believe that our current focused product offering and marketing will drive sales through this year and the coming year.”
David Weinberg, SKECHERS’ chief operating officer, stated: “Despite the challenging economic environment, SKECHERS has been able to maintain a strong position in the market and further improve its balance sheet. We remain financially solid with cash, cash equivalents and long-term investments of over $239 million, representing in excess of $5 per share, and are continuing plans for measured growth in the United States and abroad. We are cautious about the remainder of the year given the soft global economic environment, but we remain confident that the Company is well positioned for sustainable long-term profitability and to continue to increase its share of the global footwear market.”
The Company now expects net sales for the fourth quarter of 2008 to be in the range of $305 million to $320 million and net earnings per diluted share of $0.15 to $0.23.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company’s global network of distributors and subsidiaries in Canada, Brazil, and across Europe, as well as through a joint venture in China and Hong Kong. Please visit www.skechers.com or call the Company’s information line at 877-INFO-SKX.
This announcement may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or simply state future results, performance or achievements, and 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, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school and holiday selling seasons; the ability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for the products and the various market factors described above; the ability to maintain brand image; the ability to sustain, manage and forecast growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of any significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with political instability in China, the occurrence of a natural disaster or outbreak of a pandemic disease in China, or electrical shortages, labor shortages or work stoppages that may lead to higher production costs and/or production delays; changes in monetary controls and valuations of the Yuan by the Chinese government; increased costs of freight and transportation to meet delivery deadlines; violation of labor or other laws by independent contract manufacturers, suppliers or licensees; potential imposition of additional duties, tariffs or other trade restrictions; business disruptions resulting from natural disasters such as an earthquake due to the location of domestic warehouse, headquarters and a substantial number of retail stores in California; changes in business strategy or development plans; changes in economic conditions that could affect the ability to open retail stores in new markets and/or the sales performance of existing stores; the ability to attract and retain qualified personnel; the disruption, expense and potential liability associated with existing or unanticipated future litigation; and other factors referenced or incorporated by reference in the Company’s Form 10-K for the year ended December 31, 2007 and the Company’s Form 10-Q for the quarter ended June 30, 2008. The risks included here are not exhaustive. We operate 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 the 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September December
30, 31,
2008 2007
--------- --------
ASSETS
Current Assets:
Cash and cash equivalents $150,980 $199,516
Short-term investments - 104,500
Trade accounts receivable, net 212,533 167,406
Other receivables 7,849 10,520
--------- --------
Total receivables 220,382 177,926
--------- --------
Inventories 250,070 204,211
Prepaid expenses and other current assets 26,728 13,993
Deferred tax assets 8,594 8,594
--------- --------
Total current assets 656,754 708,740
--------- --------
Property and equipment, at cost less accumulated
depreciation and amortization 133,800 98,400
Intangible assets, less applicable amortization - 78
Deferred tax assets 15,981 13,983
Long-term investments 88,450 -
Other assets, at cost 19,265 6,776
--------- --------
TOTAL ASSETS $914,250 $827,977
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term borrowings $ 404 $ 437
Accounts payable 177,479 164,466
Accrued expenses 22,293 19,949
--------- --------
Total current liabilities 200,176 184,852
--------- --------
Long-term borrowings, excluding current
installments 16,180 16,462
Minority interest 2,865 -
Stockholders' equity 695,029 626,663
--------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $914,250 $827,977
========= ========
SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
--------- -------- ----------- ----------
Net sales $403,159 $395,033 $1,142,656 $1,092,140
Cost of sales 231,628 223,363 641,760 619,403
--------- -------- ----------- ----------
Gross profit 171,531 171,670 500,896 472,737
Royalty income 591 998 1,660 3,392
--------- -------- ----------- ----------
172,122 172,668 502,556 476,129
--------- -------- ----------- ----------
Operating expenses:
Selling 40,911 37,657 105,037 105,448
General and
administrative 106,462 98,431 304,540 274,888
--------- -------- ----------- ----------
147,373 136,088 409,577 380,336
--------- -------- ----------- ----------
Other income (expense):
Interest, net 354 1,710 2,295 3,843
Other, net (828) 298 (81) 129
--------- -------- ----------- ----------
(474) 2,008 2,214 3,972
--------- -------- ----------- ----------
Earnings before income taxes
and minority interest 24,275 38,588 95,193 99,765
Income tax expense (3,639) 13,844 20,175 36,173
Minority interest in loss
of consolidated
subsidiary (375) - (756) -
--------- -------- ----------- ----------
Net earnings $ 28,289 $ 24,744 $ 75,774 $ 63,592
========= ======== =========== ==========
Net earnings per share:
Basic $ 0.61 $ 0.54 $ 1.65 $ 1.41
========= ======== =========== ==========
Diluted $ 0.60 $ 0.53 $ 1.62 $ 1.37
========= ======== =========== ==========
Weighted average shares:
Basic 46,115 45,721 46,000 45,095
========= ======== =========== ==========
Diluted 46,835 46,654 46,770 46,769
========= ======== =========== ==========
by | Oct 15, 2008 | Press Release
Oct 15, 2008 • 6:30 pm EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE: SKX), a global leader in lifestyle footwear, today announced that the Company’s conference call to review fiscal year 2008 third quarter financial results will be broadcast live over the internet on Wednesday, October 22, 2008 at 4:30 pm Eastern Time.
This call is being webcast by CCBN and can be accessed at SKECHERS website at www.skx.com. The call will be archived for two weeks.
The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.companyboardroom.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (www.streetevents.com).
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as 10 uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company’s global network of distributors and Canadian and European subsidiaries. Please visit www.skechers.com or call the Company’s information line at 877-INFO-SKX.
by | Sep 2, 2008 | Press Release
Sep 2, 2008 • 8:58 am EDT
Global Footwear Company Continues Expansion in Asia; First SKECHERS Concept Store Opens in Hong Kong
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE:SKX), a global leader in the lifestyle footwear industry, today announced that it has expanded its operations in Hong Kong and Macau through a joint venture (known as SKECHERS Hong Kong Limited) with the Onwel Group, a leading fashion company in the region. The new joint venture in Hong Kong follows on the heels of SKECHERS China Limited, a joint venture with Luen Thai Enterprises established earlier this year.
SKECHERS Hong Kong has already started to deliver a full-range of men’s, women’s and children’s SKECHERS footwear by establishing its own retail stores. It will also deliver SKECHERS products through a vast network of wholesale accounts starting from the Spring 2009 season. SKECHERS Hong Kong expects to improve its wholesale distribution with 200 new doors in the next two years and plans to triple its sales within three years.
“There is a tremendous opportunity for SKECHERS to grow in Hong Kong,” stated Michael Leung, CEO of SKECHERS Hong Kong. “SKECHERS is a fantastic, strong, global brand and this market is filled with brand-loving consumers who are ready for more of the stylish lifestyle footwear SKECHERS has to offer. We expect SKECHERS to experience new success in Hong Kong thanks to the full line of styles now available.”
“We’re excited to be managing our operations and selling directly in Hong Kong thanks to this new joint venture and the dedicated and experienced team Michael Leung and his son Vincent have in place,” began Michael Greenberg, president of SKECHERS. “We had a foothold in the region through a distribution partner, and now we have an opportunity to take our business in the Hong Kong region to the next level. A densely populated territory of approximately seven million, Hong Kong offers many opportunities for SKECHERS given its educated and savvy consumers, and growing open and dynamic economy.”
The first SKECHERS concept store in Hong Kong opened in Olympian City 2, West Kowloon, and a celebrity attended grand opening was held on August 16, 2008. This is the first of eight retail stores scheduled to open in 2008. Another 20 SKECHERS retail store locations are planned to open in the next two years. As in the United States and around the world, the retail stores in Hong Kong should be profitable marketing vehicles. Stepping into a SKECHERS store in Hong Kong, consumers will be enveloped by the SKECHERS lifestyle – from images to a complete picture of SKECHERS’ diverse products, making it a living catalog.
“The people of Hong Kong are avid, brand-conscious consumers,” began Vincent Leung, Senior Vice President of SKECHERS Hong Kong Limited. “The economy is thriving and given the opportunity to buy a great brand, Hong Kong people will take it. We experienced this enthusiasm with the opening of our first retail store in Olympian City 2 shopping mall last month. Our expectation for sales was modest given this was a soft opening; but from opening day, sales have been exceptional — an outstanding achievement especially given SKECHERS men’s footwear was not available in Hong Kong until now. We believe this is a testament to the power of the global brand and the perceptive Hong Kong consumer.”
Similar to SKECHERS corporate marketing methodology, SKECHERS Hong Kong will launch a complete marketing campaign to support its expanding business. This will cross multiple mediums, with the first objective of educating the Hong Kong consumers on SKECHERS lifestyle and its products.
SKECHERS Hong Kong is supporting its expansion plans by opening an office and showroom modeled after the recently completed offices in Guangzhou, China. This dual-function facility, which also includes warehouse space, will provide SKECHERS Hong Kong with a home base that centralizes and streamlines operations, marketing, sales and support needs for the joint venture.
ABOUT SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the company’s global network of distributors and subsidiaries in Canada, Brazil, Asia, and across Europe. Please visit www.skechers.com or call the company’s information line at 877-INFO-SKX.
About Onwel
Onwel Sales Limited is the retail arm of Onwel Group of Companies (“Onwel Group”). Onwel Group was formed in 1981 as a reorganization to streamline finance, administration and control of a diverse group of associate and affiliate companies owned and/or controlled by Mr Michael K H Leung and his family since 1969. Onwel Group now consists of 20 subsidiaries and associated companies in China, Hong Kong, Saipan, Thailand and the United States of America. The core businesses of Onwel Group are garment manufacturing, trading and retailing, telecommunications, logistics and investments in restaurants and properties.
This announcement may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or simply state future results, performance or achievements, and 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, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school and holiday selling seasons; the ability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for the products and the various market factors described above; the ability to maintain brand image; the ability to sustain, manage and forecast growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of any significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with political instability in China, the occurrence of a natural disaster or outbreak of a pandemic disease in China, or electrical shortages, labor shortages or work stoppages that may lead to higher production costs and/or production delays; changes in monetary controls and valuations of the Yuan by the Chinese government; increased costs of freight and transportation to meet delivery deadlines; violation of labor or other laws by independent contract manufacturers, suppliers or licensees; potential imposition of additional duties, tariffs or other trade restrictions; business disruptions resulting from natural disasters such as an earthquake due to the location of domestic warehouse, headquarters and a substantial number of retail stores in California; changes in business strategy or development plans; changes in economic conditions that could affect the ability to open retail stores in new markets and/or the sales performance of existing stores; the ability to attract and retain qualified personnel; the disruption, expense and potential liability associated with existing or unanticipated future litigation; and other factors referenced or incorporated by reference in the SKECHERS’ Form 10-K for the year ended December 31, 2007 and SKECHERS’ Form 10-Q for the quarter ended June 30, 2008. The risks included here are not exhaustive. We operate 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 the 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.
by | Aug 21, 2008 | Press Release
Aug 21, 2008 • 8:00 am EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
Skechers USA Inc. (NYSE: SKX), the California-based specialty footwear retailer, today issued the following statement in response to Heelys’ public announcement rejecting Skechers’ proposal to enter into discussions regarding a business combination.
Robert Greenberg, Chairman and CEO of Skechers commented, “We are disappointed in Heelys’ response to our proposal. We continue to believe our offer provides a full and fair value to Heelys’ stockholders and such a transaction would be in their best interests. We are particularly disappointed that, after repeated contacts over several months, Heelys will not agree even to discussions or provide us with an opportunity to conduct due diligence. We do not believe that such a refusal is in the best interests of Heelys’ stockholders. We are very interested in continuing our dialogue and, as discussed in Skechers’ letter of August 13, we may also be prepared to refine our proposal if additional value can be identified during the due diligence. The Company’s interest remains genuine and along with our advisors, we will continue to explore all of our options.”
On August 13, 2008, Skechers announced a proposal to acquire all the outstanding shares of Heelys Inc.’s common stock for $5.25 per share, or an aggregate of $142.8 million, representing an 8.2% premium to the closing price of its common shares on August 12, 2008 and a 31.0% premium to the closing price of its common shares, net of the cash and cash equivalents that the Company reported as of June 30, 2008. This proposal follows a proposal made by Skechers to Heelys on May 28, 2008.
ABOUT SKECHERS USA Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company’s global network of distributors and subsidiaries in Canada, Brazil, and across Europe, as well as through a joint venture in China. Please visit www.skechers.com or call the Company’s information line at 877-INFO-SKX.
Disclosure Regarding Forward-Looking Statements
This announcement may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or simply state future results, performance or achievements of the Company, and 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 the Company’s actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include international, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school and holiday selling seasons; the ability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for our products and the various market factors described above; the ability of the Company to maintain its brand image; the ability to sustain, manage and forecast the Company’s growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of any significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with political instability in China, increases in labor or raw material costs, the occurrence of prolonged adverse weather conditions, a natural disaster or outbreak of a pandemic disease in China, or electrical shortages, labor shortages or work stoppages that may lead to higher production costs, production delays and/or transportation delays; changes in monetary controls and valuations of the Yuan by the Chinese government; increased costs of freight and transportation to meet delivery deadlines; violation of labor or other laws by our independent contract manufacturers, suppliers or licensees; potential imposition of additional duties, tariffs or other trade restrictions; business disruptions resulting from natural disasters such as an earthquake due to the location of the Company’s domestic warehouse, headquarters and a substantial number of retail stores in California; changes in business strategy or development plans; changes in economic conditions that could affect the Company’s ability to open retail stores in new markets and/or the sales performance of the Company’s existing stores; the ability to attract and retain qualified personnel; the disruption, expense and potential liability associated with existing or unanticipated future litigation; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2007 and in its quarterly report on Form 10-Q for the quarter ended June 30, 2008. The risks included here are not exhaustive. We operate 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 the Company’s future performance.
by | Jul 23, 2008 | Press Release
Jul 23, 2008 • 4:00 pm EDT
— Record Second Quarter 2008 Net Sales of $354.6 Million; — Record Six Month 2008 Net Sales of $739.5 Million
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle footwear, today announced financial results for the quarter ended June 30, 2008.
Net sales for the second quarter of 2008 were $354.6 million compared to $352.2 million in the second quarter of 2007. Net earnings for the quarter were $14.6 million versus net earnings of $14.9 million in the second quarter of 2007. Net earnings per diluted share were $0.31 on 46.8 million diluted shares outstanding versus diluted earnings per share of $0.32 on 46.8 million diluted shares outstanding for the second quarter of 2007.
“Our record second quarter revenues of $354 million are in line with our expectations and the guidance we gave a few months ago,” stated Fred Schneider, chief financial officer of SKECHERS. “We are especially pleased with our continued strong international sales, and believe that we will continue to see growth in key areas around the world. While we did not experience domestic wholesale growth in the quarter, SKECHERS wholesale sales in the U.S. were slightly better than anticipated, which we feel is meaningful given the very soft retail environment. Our company-owned retail business has also been impacted by the weak domestic economy, with sales essentially flat on an increased store base. Our profitability is also in line with our expectations, and our balance sheet remains extremely strong, allowing us to continue to execute our growth plans both domestically and internationally.”
For the six months ended June 30, 2008, net sales increased 6.1 percent to $739.5 million compared to net sales of $697.1 million in the first six months of 2007. Net earnings were $47.5 million, compared to net earnings of $38.8 million in the first six months of 2007. Net earnings per diluted share in the first six months of 2008 were $1.02 per share on 46.7 million diluted shares outstanding versus $0.84 per share on 46.8 million diluted shares outstanding for the same period last year.
Gross profit for the second quarter of 2008 was $157.2 million compared to $152.0 million in the second quarter of 2007. Gross margin was 44.3 percent for the second quarter of 2008 compared to 43.2 percent in the second quarter of 2007. Gross profit for the first six months of 2008 reached $329.4 million or 44.5 percent of net sales versus $301.1 million or 43.2 percent of net sales in the first six months of 2007.
Robert Greenberg, chief executive officer of SKECHERS, said: “At just 16 years old, we are young compared to many other global footwear companies, yet we are a top brand in both market share and awareness, and we are continuing to grow. In fact, a recent NPD poll tracked the top footwear brands by sales in 10 major categories, and SKECHERS appeared in 6 of these categories, more than any other brand, including the No. 1 position in Juniors’ Men, Juniors’ Women and Low Performance Footwear. This is an important indication of the strength of the SKECHERS brand in the United States. We believe consumers remain committed to a brand that delivers both style and comfort, and our accounts remain committed to a brand they know will deliver the right footwear at a good price and provide marketing support for their product. We are launching new print and television campaigns for our brands, including a multiple medium campaign featuring American Idol winner David Cook in SKECHERS and a new print and TV campaign featuring High School Musical star Vanessa Hudgens. We believe our fashionable and diverse product offering, which now includes the very fresh junior sneaker brands Punkrose for women and Public Royalty for men, resonates with consumers in markets around the world. Our goal is to continue to profitably grow our brand internationally as well as in the United States by continuing to create desirable brands sought after by consumers of all ages. We remain confident that there are still areas to penetrate in the United States, and the opportunities for growth internationally are numerous.”
“We are pleased with our sales in the second quarter and for the first six months of the year. Achieving record revenues and still growing when the U.S. retail sector is very soft is clearly not easy for any business,” stated David Weinberg, SKECHERS’ chief operating officer. “We believe our growth is due to the reputation of our brand, our diversified product offering, and our global business model.”
Weinberg continued: “While we are satisfied with our performance for the quarter, we are cautiously optimistic about the second half of the year. We believe the third quarter will be stronger than this past quarter, as discussed when we gave second quarter guidance a few months ago. This expectation is based on orders received during the second quarter, resulting in double digit backlogs internationally and mid-single digits domestically. In addition, we just completed several weeks of pre-lines and received very positive feedback from our key domestic and Canadian accounts, and our international business is growing in nearly every market across the globe. While we are cautious in our domestic plans given the U.S. economy, our key indicators give us confidence that we will be able to profitably grow our market share. We are continuing to further lay the foundation for our planned world-wide growth by enhancing our distribution capabilities, building our international business, and looking for new opportunities to grow domestically.”
The Company now expects net sales for the third quarter of 2008 to be in the range of $425 million to $440 million and net earnings per diluted share of $0.57 to $0.65.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company’s global network of distributors and subsidiaries in Canada, Brazil, and across Europe, as well as through a joint venture in China. Please visit www.skechers.com or call the Company’s information line at 877-INFO-SKX.
This announcement may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or simply state future results, performance or achievements of the Company, and 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 the Company’s actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include international, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school and holiday selling seasons; the ability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for our products and the various market factors described above; the ability of the Company to maintain its brand image; the ability to sustain, manage and forecast the Company’s growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of any significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with political instability in China, increases in labor or raw material costs, the occurrence of prolonged adverse weather conditions, a natural disaster or outbreak of a pandemic disease in China, or electrical shortages, labor shortages or work stoppages that may lead to higher production costs, production delays and/or transportation delays; changes in monetary controls and valuations of the Yuan by the Chinese government; increased costs of freight and transportation to meet delivery deadlines; violation of labor or other laws by our independent contract manufacturers, suppliers or licensees; potential imposition of additional duties, tariffs or other trade restrictions; business disruptions resulting from natural disasters such as an earthquake due to the location of the Company’s domestic warehouse, headquarters and a substantial number of retail stores in California; changes in business strategy or development plans; changes in economic conditions that could affect the Company’s ability to open retail stores in new markets and/or the sales performance of the Company’s existing stores; the ability to attract and retain qualified personnel; the disruption, expense and potential liability associated with existing or unanticipated future litigation; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2007 and in its quarterly report on Form 10-Q for the quarter ended March 31, 2008. The risks included here are not exhaustive. We operate 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 the Company’s future performance.
SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, December 31,
2008 2007
-------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $145,622 $199,516
Short-term investments - 104,500
Trade accounts receivable, net 232,853 167,406
Other receivables 9,063 10,520
-------- ------------
Total receivables 241,916 177,926
-------- ------------
Inventories 234,152 204,211
Prepaid expenses and other current assets 20,865 13,993
Deferred tax assets 8,594 8,594
-------- ------------
Total current assets 651,149 708,740
-------- ------------
Property and equipment, at cost less accumulated
depreciation and amortization 126,932 98,400
Intangible assets, less applicable amortization - 78
Deferred tax assets 15,977 13,983
Long-term investments 94,075 -
Other assets, at cost 23,271 6,776
-------- ------------
TOTAL ASSETS $911,404 $827,977
======== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term borrowings $ 206 $ 437
Accounts payable 185,154 164,466
Accrued expenses 31,005 19,949
-------- ------------
Total current liabilities 216,365 184,852
-------- ------------
Long-term borrowings, excluding current
installments 16,287 16,462
Minority interest 2,620 -
Stockholders' equity 676,132 626,663
-------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $911,404 $827,977
======== ============
SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
--------- --------- --------- ---------
Net sales $354,574 $352,211 $739,496 $697,107
Cost of sales 197,381 200,183 410,131 396,040
--------- --------- --------- ---------
Gross profit 157,193 152,028 329,365 301,067
Royalty income 230 1,193 1,070 2,394
--------- --------- --------- ---------
157,423 153,221 330,435 303,461
--------- --------- --------- ---------
Operating expenses:
Selling 38,592 40,950 64,126 67,791
General and administrative 98,857 90,473 198,079 176,457
--------- --------- --------- ---------
137,449 131,423 262,205 244,248
--------- --------- --------- ---------
Other income (expense):
Interest, net 488 1,286 1,941 2,133
Other, net 844 (147) 748 (169)
--------- --------- --------- ---------
1,332 1,139 2,689 1,964
--------- --------- --------- ---------
Earnings before income taxes
and minority interest 21,306 22,937 70,919 61,177
Income tax expense 7,045 7,989 23,814 22,329
Minority interest in loss
of consolidated subsidiary (380) - (380) -
--------- --------- --------- ---------
Net earnings $ 14,641 $ 14,948 $ 47,485 $ 38,848
========= ========= ========= =========
Net earnings per share:
Basic $ 0.32 $ 0.33 $ 1.03 $ 0.87
========= ========= ========= =========
Diluted $ 0.31 $ 0.32 $ 1.02 $ 0.84
========= ========= ========= =========
Weighted average shares:
Basic 46,000 45,576 45,941 44,777
========= ========= ========= =========
Diluted 46,810 46,808 46,737 46,809
========= ========= ========= =========
by | Jul 18, 2008 | Press Release
Jul 18, 2008 • 9:00 am EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–
SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle footwear, today announced that the Company’s conference call to review fiscal year 2008 second quarter financial results will be broadcast live over the internet on Wednesday, July 23, 2008 at 4:30 pm Eastern Time.
This call is being webcast by CCBN and can be accessed at SKECHERS website at www.skx.com. The call will be archived for two weeks.
The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.companyboardroom.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (www.streetevents.com).
About SKECHERS USA, Inc.
Celebrating its 16th year in business, SKECHERS USA, Inc., designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the company’s global network of distributors and subsidiaries in Canada, Brazil, Asia, and across Europe, as well as through a joint venture in China and in Hong Kong. The company is based in Manhattan Beach, California. Please visit www.skechers.com or call the company’s information line at 877-INFO-SKX.
