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Skechers Q2 revenue rises 69 percent

July 29, 2010 6:42 AM

Press Release:

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)--SKECHERS USA, Inc. (NYSE:SKX - News), a global leader in lifestyle footwear, today announced financial results for the second quarter ended June 30, 2010.

Second quarter 2010 net sales increased 68.9 percent to $504.9 million compared to $299.0 million in the second quarter of 2009. Earnings from operations for the second quarter of 2010 were $58.8 million compared to a loss from operations of $7.7 million in the second quarter of 2009. Net earnings for the second quarter of 2010 were $40.2 million versus a net loss of $5.9 million in the second quarter of 2009. Second quarter diluted earnings per share were $0.82 based on 49,130,000 weighted average common shares outstanding as compared to a net loss per diluted share of $0.13 based on 46,282,000 weighted average common shares outstanding.

"Our second quarter net sales of over $500 million are a first in our 18-year history. In addition, we achieved record second quarter operating income, net earnings and earnings per diluted share on the heels of a record first quarter," began David Weinberg, chief operating officer and chief financial officer. "The significant revenue growth is attributable to strong operational execution and product development and delivery across our domestic and international wholesale and retail channels, as well as via our e-commerce platform. We believe our momentum is being meaningfully supported and enhanced by our continued marketing efforts globally."

For the six months ended June 30, 2010, net sales were $997.6 million compared to net sales of $642.4 million in the first six months of 2009. Earnings from operations for the first six months were $139.8 million compared to a loss from operations of $1.6 million in the same period of 2009. Net earnings were $96.5 million, compared to net earnings of $2.3 million in the first six months of 2009. Net earnings per diluted share in the first six months of 2010 were $1.97 per share on 48,955,000 million diluted shares outstanding versus net earnings of $0.05 per share on 46,424,000 million diluted shares outstanding for the same period last year.

Gross profit for the second quarter of 2010 was $237.6 million or 47.1 percent of net sales compared to $122.6 million or 41.0 percent of net sales in the second quarter of last year. Gross profit for the first six months of 2010 was $475.1 million or 47.6 percent of net sales versus $248.0 million or 38.6 percent of net sales in the first six months of 2009.

Robert Greenberg, SKECHERS chief executive officer, commented: "We reached a new revenue milestone with our first ever quarterly net sales of over $500 million and nearly $1 billion for the first six months of 2010. This growth is a significant achievement given that the U.S. retail market has only slightly improved from last year. The combination of our strong position and product momentum has resulted in continued penetration in the footwear market and increasing demand for our SKECHERS brand both in the United States and around the world. We remain dedicated to delivering innovative men’s, women’s and kids’ product and developing new marketing campaigns to support our efforts. We are looking forward to the back-to-school season, which we believe will be our strongest yet. The product success we achieved in the United States over the past six months is beginning to spread to markets around the world, and we believe our growth will accelerate in many of these countries. We continue to develop exciting new product and had a very positive reaction to our new lines with key accounts earlier this month, giving us a glimpse of what we expect will be a strong finish to the year. We are in a very strong position in the market with a buzz that is growing from consumers and the media. We believe that 2010 marks a new phase in SKECHERS' development, and that we will continue to strategically grow -- becoming one of the most sought after performance and lifestyle brands in the world."

"SKECHERS' top-line growth, significantly increased profitability and much improved margins are the result of our consistent efforts to deliver fresh, innovative product supported by relevant marketing around the world," Mr. Weinberg added. "Our product is in high demand, inventory is clean, and our balance sheet continues to strengthen. At quarter end, our cash position was over $273 million, even though we accelerated factory payments of $64 million and made a capital contribution of $30 million to our distribution center joint venture. We broke ground during the second quarter on this new, more efficient, 1.8 million-square-foot facility in Rancho Belago, California. With a triple digit increase in backlogs and double digit retail store comps, we believe our momentum will continue."

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, Chile, and across Europe, as well as through joint ventures in Asia. For more information, please visit www.skechers.com.



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