by | Jul 21, 2016 | Press Release
Jul 21, 2016 • 4:01 pm EDT
Record Second Quarter Net Sales of $877.8 Million
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX), a global leader in footwear, today announced financial results for the second quarter ended June 30, 2016.
Second quarter 2016 net sales were $877.8 million compared to $800.5 million for the second quarter of 2015. Gross profit for the second quarter of 2016 was $416.3 million, or 47.4 percent of net sales, compared to $374.6 million, or 46.8 percent of net sales, for the second quarter of last year. Earnings from operations for the second quarter of 2016 were $100.4 million, or 11.4 percent of net sales, compared to earnings from operations of $112.3 million, or 14.0 percent of net sales for the second quarter of 2015.
“Skechers achieved new record second quarter net sales of $877.8 million, which led to a $1.86 billion net sales record for the first six months of 2016,” began David Weinberg, chief operating officer and chief financial officer. “The growth in the quarter was primarily attributable to a 34.6 percent increase in our international subsidiary and joint venture businesses and a 40.5 percent increase in our international Company-owned Skechers retail stores. This resulted in our international wholesale and retail business comprising 41.9 percent of total sales for the second quarter and 45.0 percent for the first six months of 2016. Company-owned Skechers retail sales increased 15.4 percent for the quarter. As expected, in our domestic wholesale business, shipments were pulled forward from April into March, resulting in significantly reduced shipments in April and a sales decrease of 5.4 percent in the second quarter, but an increase of 3.2 percent for the first six-months. Our strong gross margins of 47.4 percent for the quarter were primarily the result of higher sales increases in our international subsidiary and joint venture businesses as well as our Company-owned retail stores.”
Net earnings in the second quarter of 2016 were $74.1 million compared to net earnings of $79.8 million for the second quarter of 2015. Diluted net earnings per share in the second quarter of 2016 were $0.48 based on 155.0 million weighted average shares outstanding compared to diluted net earnings per share of $0.52 based on 154.0 million weighted average shares outstanding for the same period last year. The Company’s diluted earnings per share for the second quarter of 2016 were negatively impacted by several factors including foreign currency translation and exchange losses of $8.3 million, or $0.05 per diluted share. In addition, the Company had G&A expenses for additional VAT taxes in Brazil of $2.7 million and a fire in its Malaysia warehouse, which resulted in a pre-tax loss of approximately $0.9 million. These factors reduced diluted earnings per share by $0.02. In addition, the Company’s annual effective tax rate for the second quarter was 12.7 percent, and 18.1 percent for the first six months, which increased its net earnings and diluted earnings per share. The Company’s annual effective tax rate is significantly lower than its previous guidance, primarily due to reduced projected domestic earnings combined with increased projected earnings from its China operations, which has a lower tax rate than its U.S. effective tax rate.
For the six months ended June 30, 2016, net sales were $1.86 billion compared to net sales of $1.57 billion in the first six months of 2015. Gross profit for the first six months of 2016 was $848.4 million, or 45.7 percent of net sales, compared to $707.1 million, or 45.1 percent of net sales, for the first six months of 2015. Earnings from operations for the first six months of 2016 were $238.9 million, or 12.9 percent of net sales, compared to earnings from operations of $200.5 million, or 12.8 percent of net sales, for the first six months of 2015.
Net earnings in the first six months of 2016 were $171.7 million compared to net earnings of $135.9 million in the same period last year. For the first six months of 2016, diluted net earnings per share were $1.11 based on 154.9 million weighted average common shares outstanding compared to diluted net earnings per share of $0.88 based on 153.8 million weighted average common shares outstanding for the first six months of 2015.
Robert Greenberg, SKECHERS chief executive officer, commented: “In an environment that included economic and political uncertainty in both the United States and abroad, as well as challenges in the domestic retail space resulting in a promotional sales environment, Skechers was a brand that customers and consumers could count on—for delivering comfort, style and quality, as well as supporting it with marketing. In the second quarter, we focused on designing great new product, marketing our spring collections, previewing upcoming seasons with our global accounts, and preparing for back to school 2016. In the United States and in many markets around the world, we continued to air our celebrity campaigns for the Spring selling season—including Demi Lovato in Skechers Burst, Meghan Trainor in Skechers Originals, Sugar Ray Leonard in Skechers Sport, and Meb in Skechers GORun Ride 5, along with many other commercials, including those for our growing kids business. Already with multiple Skechers Kids commercials on air in the United States, we are looking forward to the back-to-school selling season, and the launch of our men’s and women’s campaigns in a couple weeks along with new styles including GOwalk 4. International is a key focus for Skechers as we expand our reach and deliver more product into more channels of distribution—including the expansion of our retail arm of the Company with our first Skechers stores in Belgium, Norway and Finland; another 42 Skechers stores in China—bringing the total Skechers store count to 233 in that country; and double-digit sales growth in many countries—from Germany to Canada and Scandinavia to Russia. Together with our international partners, we opened a net 133 Skechers stores in the second quarter, bringing the total number of Skechers retail stores to 1,548, of which 1,144 are outside the United States. We expect to have more than 1,600 Skechers stores by year-end, including our first retail stores in Uruguay, Paraguay, Botswana and Sri Lanka, as well as the opening next month of our store at One World Trade Center in New York. We believe that even with the political and economic challenges some countries are facing—including the challenging retail environment in the United States, Skechers remains relevant, reliable and top-of-mind with consumers. We are looking forward to maintaining our position as a brand leader in the United States, and growing our market share around the world.”
Mr. Weinberg added: “As previously mentioned, over the first half of 2016 we saw a shift in shipments between quarters in comparison to the prior year period. Last year’s second quarter was extremely strong as shipments were pushed from the first quarter into the second quarter of 2015, while this year shipments were pulled from the second quarter into the first quarter of 2016. Looking at the first six months of 2016 together, net sales increased 18.4 percent, a significant achievement over a previous record period. In June 2016, we experienced our biggest shipping month in our history from our North American Distribution Center, and our European Distribution Center also exceeded its planned shipping for June, which was the biggest month in the quarter. Based on our June shipments as well as the strong start to July, we believe this positive momentum will continue into the third quarter. The shifting of shipments and changes in how our accounts are ordering is also affecting our backlog, which is down low single digits worldwide, excluding China. Total inventories decreased $29.5 million or 4.8 percent from December 31, 2015, and increased $120.1 million or 25.5 percent from June 30, 2015, and are in line with our growth and higher Company-owned store count. Our financial position is strong with $628.8 million in cash and cash equivalents. As international becomes a larger piece of our total business, we believe there is upside opportunity for the third quarter of 2016, with net sales estimated between $950 million and $975 million.”
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, 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 160 countries and territories worldwide via department and specialty stores, more than 1,545 SKECHERS Company-owned and third-party retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
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, the Company’s 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 and opening of new stores, the completion of the expansion and upgrade of the Company’s European distribution center, 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 uncertainty of sustained recovery in Europe; entry into the highly competitive performance footwear market; 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; 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 the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its quarterly report on Form 10-Q for the quarter ended March 31, 2016. The risks included here are not exhaustive. The Company 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,
2016
|
|
December 31,
2015
|
| ASSETS |
|
|
|
|
| Current Assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
628,827 |
|
$ |
507,991 |
| Trade accounts receivable, net |
|
|
468,572 |
|
|
343,930 |
| Other receivables |
|
|
20,545 |
|
|
18,661 |
| Total receivables |
|
|
489,117 |
|
|
362,591 |
| Inventories |
|
|
590,711 |
|
|
620,247 |
| Prepaid expenses and other current assets |
|
|
57,283 |
|
|
57,363 |
| Total current assets |
|
|
1,765,938 |
|
|
1,548,192 |
| Property, plant and equipment, net |
|
|
464,403 |
|
|
435,907 |
| Deferred tax assets |
|
|
17,680 |
|
|
17,825 |
| Other assets |
|
|
43,411 |
|
|
37,954 |
| Total non-current assets |
|
|
525,494 |
|
|
491,686 |
| TOTAL ASSETS |
|
$ |
2,291,432 |
|
$ |
2,039,878 |
| LIABILITIES AND EQUITY |
|
|
|
|
| Current Liabilities: |
|
|
|
|
| Current installments of long-term borrowings |
|
$ |
1,775 |
|
$ |
15,653 |
| Accounts payable |
|
|
534,180 |
|
|
473,983 |
| Short-term borrowings |
|
|
3,274 |
|
|
59 |
| Accrued expenses |
|
|
71,661 |
|
|
87,318 |
| Total current liabilities |
|
|
610,890 |
|
|
577,013 |
| Long-term borrowings, net of current installments |
|
|
68,053 |
|
|
68,942 |
| Deferred tax liabilities |
|
|
9,058 |
|
|
8,507 |
| Other long-term liabilities |
|
|
11,740 |
|
|
9,682 |
| Total non-current liabilities |
|
|
88,851 |
|
|
87,131 |
| Total liabilities |
|
|
699,741 |
|
|
664,144 |
| Stockholders’ equity: |
|
|
|
|
| Skechers U.S.A., Inc. equity |
|
|
1,524,481 |
|
|
1,327,556 |
| Noncontrolling interests |
|
|
67,210 |
|
|
48,178 |
| Total equity |
|
|
1,591,691 |
|
|
1,375,734 |
| TOTAL LIABILITIES AND EQUITY |
|
$ |
2,291,432 |
|
$ |
2,039,878 |
|
|
|
|
|
|
|
| |
| SKECHERS U.S.A., INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
| (Unaudited) |
| (In thousands, except per share data) |
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
| Net sales |
|
$ |
877,810 |
|
|
$ |
800,464 |
|
|
|
$ |
1,856,604 |
|
|
$ |
1,568,461 |
|
| Cost of sales |
|
|
461,556 |
|
|
|
425,856 |
|
|
|
|
1,008,198 |
|
|
|
861,313 |
|
| Gross profit |
|
|
416,254 |
|
|
|
374,608 |
|
|
|
|
848,406 |
|
|
|
707,148 |
|
| Royalty income |
|
|
3,307 |
|
|
|
3,630 |
|
|
|
|
5,932 |
|
|
|
5,512 |
|
|
|
|
419,561 |
|
|
|
378,238 |
|
|
|
|
854,338 |
|
|
|
712,660 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
| Selling |
|
|
75,966 |
|
|
|
64,875 |
|
|
|
|
129,844 |
|
|
|
113,967 |
|
| General and administrative |
|
|
243,240 |
|
|
|
201,021 |
|
|
|
|
485,589 |
|
|
|
398,162 |
|
|
|
|
319,206 |
|
|
|
265,896 |
|
|
|
|
615,433 |
|
|
|
512,129 |
|
| Earnings from operations |
|
|
100,355 |
|
|
|
112,342 |
|
|
|
|
238,905 |
|
|
|
200,531 |
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
| Interest, net |
|
|
(1,542 |
) |
|
|
(2,884 |
) |
|
|
|
(2,664 |
) |
|
|
(5,534 |
) |
| Other, net |
|
|
(2,604 |
) |
|
|
2,990 |
|
|
|
|
175 |
|
|
|
(1,771 |
) |
|
|
|
(4,146 |
) |
|
|
106 |
|
|
|
|
(2,489 |
) |
|
|
(7,305 |
) |
| Earnings before income tax expense |
|
|
96,209 |
|
|
|
112,448 |
|
|
|
|
236,416 |
|
|
|
193,226 |
|
| Income tax expense |
|
|
12,200 |
|
|
|
25,383 |
|
|
|
|
42,768 |
|
|
|
44,503 |
|
| Net earnings |
|
|
84,009 |
|
|
|
87,065 |
|
|
|
|
193,648 |
|
|
|
148,723 |
|
| Less: Net earnings attributable to noncontrolling interests |
|
|
9,902 |
|
|
|
7,283 |
|
|
|
|
21,929 |
|
|
|
12,861 |
|
| Net earnings attributable to Skechers U.S.A., Inc. |
|
$ |
74,107 |
|
|
$ |
79,782 |
|
|
|
$ |
171,719 |
|
|
$ |
135,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
0.48 |
|
|
$ |
0.52 |
|
|
|
$ |
1.12 |
|
|
$ |
0.89 |
|
| Diluted |
|
$ |
0.48 |
|
|
$ |
0.52 |
|
|
|
$ |
1.11 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares used in calculating earnings per share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
154,049 |
|
|
|
152,712 |
|
|
|
|
153,901 |
|
|
|
152,565 |
|
| Diluted |
|
|
155,023 |
|
|
|
154,027 |
|
|
|
|
154,912 |
|
|
|
153,778 |
|
Company Contact:
SKECHERS USA, Inc.
David Weinberg
Chief Operating Officer,
Chief Financial Officer
310-318-3100
or
Investor Relations:
Addo Communications
Andrew Greenebaum
310-829-5400
by | Jul 14, 2016 | Press Release
Jul 14, 2016 • 2:03 pm EDT
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE: SKX), a global leader in footwear, today announced that it will release its second quarter 2016 financial results after market close on Thursday, July 21, 2016. A conference call will be held the same day at 1:30 p.m. PT / 4:30 p.m. ET. Participating on the call will be David Weinberg, Chief Operating Officer and Chief Financial Officer.
The call can be accessed on the Investor Relations section of the Company’s website at www.skx.com. For those unable to participate during the live broadcast, a replay will be available beginning July 21, 2016, at 7:30 p.m. ET, through August 4, 2016, at 11:59 p.m. ET. To access the replay, dial 877-870-5176 (U.S.) or 858-384-5517 (International) and use passcode: 13641178.
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, 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 160 countries and territories worldwide via department and specialty stores, more than 1,410 SKECHERS retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
Investor Relations:
Addo Communications
Andrew Greenebaum
310-829-5400
[email protected]
by | Jul 12, 2016 | Press Release
Jul 12, 2016 • 12:33 pm EDT
LONDON–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX) today announced that the Company won the Campaign of The Year Award at the Drapers Footwear Awards for its Spring 2016 Kelly Brook Skechers Memory Foam campaign. This achievement follows a year when SKECHERS has won multiple top industry awards in the United Kingdom, including Footwear Brand of the Year and Ladies Brand of the Yearat the Footwear Industry Awards in February 2016.
“We have loved sharing Kelly’s amazing campaign and her obvious passion for the brand with consumers, and are incredibly honored to receive Drapers’ recognition,” said Peter Youell, managing director of SKECHERS UK Ltd. “These awards are a testament to the strength of the SKECHERS brand in the UK and Ireland, and the ongoing support from our retail partners who reaffirm and elevate SKECHERS as a desired brand in lifestyle and fashion footwear.”
Added SKECHERS chief operating officer and chief financial officer David Weinberg: “Since SKECHERS’ start, our core philosophy has been ‘unseen, untold unsold’ – and we’ve had great success growing our brand worldwide with campaigns that pair compelling product with amazing celebrity ambassadors and aggressively advertising through TV, print, stores and social media. We believe this strategy has helped SKECHERS achieve one of our largest year-over-year dollar gains in the UK, and we look forward to launching many more campaigns for men, women and kids as we expand our reach to more consumers.”
The Drapers Footwear Awards recognize and celebrate outstanding performance, innovation and creativity among retailers, brands and individuals in this fast-paced sector, and SKECHERS won over a strong competitive field that included Jimmy Choo, Sophia Webster, Love Brands and Butterfly Twist.
The prestigious annual awards event was held on Thursday, July 1st at the London Hilton in Park Lane, supported by the British Footwear Association (BFA) and charity partner Footwear Friends.
SKECHERS offers two distinct footwear categories: a lifestyle division which offers comfort-focused trend-right product for men, women and kids including Relaxed Fit, Skechers Memory Foam footwear and the philanthropic line BOBS from SKECHERS, and the Skechers Performance Division which includes Skechers GOrun and Skechers GOwalk footwear.
Celebrity product endorsees for SKECHERS’ collections include multi-platinum recording artists Demi Lovato and Meghan Trainor, actress and model Kelly Brook, TV presenter and runner Charlie Webster, and boxing great Sugar Ray Leonard. In addition, elite marathon champion and Boston Marathon winner Meb Keflezighi, elite runner Kara Goucher, and pro golfers Colin Montgomerie, Russell Knox, Matt Kuchar, Belén Mozo, Billy Andrade and Ashlan Ramsey represent the Skechers Performance Division.
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, 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 160 countries and territories worldwide via department and specialty stores, more than 1,410 SKECHERS retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
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, the Company’s 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 and opening of new stores, the completion of the expansion and upgrade of the Company’s European distribution center, 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 uncertainty of sustained recovery in Europe; entry into the highly competitive performance footwear market; 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; 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 the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its quarterly report on Form 10-Q for the quarter ended March 31, 2016. The risks included here are not exhaustive. The Company 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 UK/Ireland
Nicola Zachariades, 01707655955
[email protected]
by | Jul 11, 2016 | Press Release
Jul 11, 2016 • 3:00 am EDT
98,500m2facility to support increased sales across Europe
LIÈGE, Belgium–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX), a global lifestyle and performance footwear company, announces the completion of the 4th phase of an expansion to its European Distribution Center (EDC) in Belgium by an additional 26,500 m2 to a total size of approximately 98,500 m2—making it the largest company-operated DC in southern Belgium.
SKECHERS European Distribution Center in Liege, Belgium (Photo: Business Wire)
“To meet the increased demand, we are investing in our infrastructure, including improved efficiencies in our European Distribution Center, which allowed us to achieve a record 3 million pairs shipped in a month during February and 8.1 million pairs for the first quarter of 2016,” began David Weinberg, chief operating officer and chief financial officer of SKECHERS. “With the completion of our European Distribution Center expansion and with the automation to be fully completed later this year, we expect to be even more efficient in our largest market outside of the United States and prepared for continued growth in Europe.”
In April, SKECHERS reported its highest first quarter net sales in the Company’s history of $978.8 million which was primarily the result of a 47.1 percent increase in our international wholesale business over the first quarter 2015. Demand for the SKECHERS brand is at an all-time high across nearly every region where the Company distributes its product and Europe in particular has seen strong business with double digit net sales increases in the first quarter for every subsidiary with a comparable period. Highlights include Spain among the top three globally with gains on a percentage basis and the United Kingdom and Germany having the largest dollar gains.
“After outgrowing our storage capacity, we had to manage overflow beyond our facility and this new building will allow us to consolidate storage into the EDC and stabilize our logistics to meet growing needs of the European market over the longer term,” began Sophie Houtmeyers, SKECHERS EDC Vice President of Distribution Operations. “This added storage capacity also opens up space in one of our adjoining buildings for the installation of new automation technologies that have improved efficiency elsewhere in our facility. We expect these upgrades to be online by November of this year and when combined with the expansion will prepare us for the future.”
The SKECHERS EDC was opened in 2002 over a surface area of 22,500 m2. Continued growth of SKECHERS in the European market resulted in an extension of the building in 2009 with 23,000 m2 of additional space. In 2013, the volume of goods was four times higher than in 2002. The facility expanded again in 2014 to 72,000 m2 and currently employs 250 full-time equivalent workers. Prior automation technologies installed in Q1 2015 have increased efficiency and additional automation upgrades will be operating by the end of 2016. Over time it is expected that today’s announced expansion to 98,500 m2 will lead to additional hires in both white collar and blue collar positions as new capacity is utilized.
The EDC distributes product to SKECHERS’ subsidiary-managed businesses throughout Europe including wholesale accounts, more than 160 SKECHERS retail stores, e-commerce in the United Kingdom and Germany, and to a lesser extent to the Company’s distribution partners in the region.
SKECHERS also operates a 170,000 m2 LEED-Gold certified distribution center in Rancho Belago, California that serves North and South America, as well as additional smaller distribution centers around the world.
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, 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 160 countries and territories worldwide via department and specialty stores, more than 1,410 SKECHERS retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
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, the Company’s 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 and opening of new stores, the completion of the expansion and upgrade of the Company’s European distribution center, 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 uncertainty of sustained recovery in Europe; entry into the highly competitive performance footwear market; 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; 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 the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its quarterly report on Form 10-Q for the quarter ended March 31, 2016. The risks included here are not exhaustive. The Company 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 USA, Inc.
Jennifer Clay
VP of Corporate Communications
310-937-1326
[email protected]
by | Jun 27, 2016 | Press Release
Jun 27, 2016 • 9:00 am EDT
- ITC Invalidates Converse’s Registered and Common Law Trademarks in the Chuck Taylor Midsole Design
- ITC Finds Skechers’ Twinkle Toes and Bobs Shoes Would Not Infringe in Any Event
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader and the second largest athletic footwear brand in the United States, today announced that the International Trade Commission (“ITC”) has found that Converse’s registered and common law trademarks in the Chuck Taylor midsole design are invalid; that Skechers’ Twinkle Toes and BOBS shoes would not infringe Converse’s claimed trademarks, even if the trademarks were valid; and that Skechers can continue importing and selling its Twinkle Toes and BOBS shoes in the United States.
In October 2014, Converse sued Skechers in federal district court and in the ITC alleging that the Company’s well-known Twinkle Toes and BOBS product lines infringed Converse’s registered and common law trademarks in the Chuck Taylor midsole design. The case went to trial before the ITC in August 2015.
In a November 17, 2015 opinion, the Chief Administrative Law Judge of the ITC, the Honorable Charles E. Bullock, ruled that Skechers’ Twinkle Toes and BOBS product lines do not infringe Converse’s trademarks for the Chuck Taylor midsole. In so ruling, the Judge noted that both of the Skechers product lines feature prominent branding and that the Twinkle Toes line contains design features that “create enough differences that the shoes bearing them cannot be said to be similar to [the Chuck Taylor].” The Judge also stated that the survey evidence concluded that there was no likelihood that consumers would confuse the Skechers Twinkle Toes and BOBS designs with those of Converse’s Chuck Taylor designs. In addition, the Judge ruled that Converse has no common law trademark rights in the Chuck Taylor midsole because the design is not distinctive, not famous, and has failed to acquire secondary meaning. These portions of the Judge’s opinion were affirmed by the ITC.
The Judge also ruled that Converse’s registered trademark for the Chuck Taylor design is valid. However, this portion of the Judge’s opinion was reversed by the ITC, which invalidated Converse’s registered trademark along with Converse’s common law trademark.
The ITC thus concluded that there was no violation by Skechers of Converse’s asserted midsole trademarks and the ITC did not issue an exclusion order against Skechers or any of Skechers’ products.
“We are pleased that the ITC invalidated Converse’s claimed trademarks in the Chuck Taylor midsole design,” stated Michael Greenberg, president of Skechers. “Countless companies, including Skechers, have used the same midsole design in canvas court-style sneakers for decades.” “We are also pleased that the ITC affirmed Judge Bullock’s conclusion that the Twinkles Toes and BOBS designs are distinctively different from the Chuck Taylor, and that there is no likelihood that consumers would ever confuse either Twinkle Toes or BOBS products with the Chuck Taylor. The decision further recognizes that Skechers investment in our distinctive designs and brand identity has helped build Twinkle Toes into a number one shoe line for young girls, and both Twinkle Toes and BOBS into household names synonymous with Skechers – not with Converse or any other brand.”
Skechers is represented in the matter by Morgan Chu, Samuel Lu, Jane Wald, Melissa Rabbani, and Grace Chen of Irell & Manella; Jeffrey Barker of O’Melveny & Myers; and Barbara Murphy of Foster, Murphy, Altman & Nickel.
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, 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 160 countries and territories worldwide via department and specialty stores, more than 1,410 SKECHERS retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
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, the Company’s 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 and opening of new stores, the completion of the expansion and upgrade of the Company’s European distribution center, 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 uncertainty of sustained recovery in Europe; entry into the highly competitive performance footwear market; 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; 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 the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its quarterly report on Form 10-Q for the quarter ended March 31, 2016. The risks included here are not exhaustive. The Company 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 USA, Inc.
Jennifer Clay
VP of Corporate Communications
310-937-1326