FOR IMMEDIATE RELEASE

         
          Company Contact:  
David Weinberg
Chief Operating Officer,
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100
          Investor Relations:  
Andrew Greenebaum
(310) 829-5400

SKECHERS ANNOUNCES FIRST BILLION-DOLLAR-PLUS QUARTER
Company’s First Quarter 2017 Financial Results
Set Quarterly Net Sales Record

MANHATTAN BEACH, CA. – April 20, 2017 – SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader, today announced financial results for the first quarter 2017.

First Quarter Highlights

Record net sales of $1.073 billion, an increase of 9.6 percent
Diluted earnings per share of $0.60

“First quarter 2017 net sales represent a new quarterly record and the first time we exceeded $1 billion in quarterly sales. We are particularly proud of the growth in the quarter considering the tough comparison to 2016, which included the benefit of an additional day in February and Easter falling in March,” began David Weinberg, chief operating officer and chief financial officer. “The growth was the result of double-digit increases in both our international distributor and subsidiary/joint venture businesses, as well as in our global Company-owned Skechers retail business. Further, in our domestic wholesale business, we shipped 4.5 percent more pairs than in the first quarter of 2016 but average price per pair decreased by 4.8 percent primarily due to stronger sales in our lower-priced lines including BOBS from Skechers and our sandal business.”

First Quarter Financial Results
Quarterly net sales increased 9.6 percent to $1.073 billion compared to first quarter 2016. The growth was the result of a 16.8 percent increase in the Company’s international wholesale business and a 12.8 percent increase in its Company-owned global retail business which included comparable same store sales increases of 2.9 percent. Additionally, the negative currency translation impact on its gross margins in its international wholesale and international Company-owned retail businesses for the first quarter was $6.1 million. The Company’s domestic wholesale net sales were relatively flat compared to the first quarter of last year.

Gross profit for the first quarter was $476.5 million, or 44.4 percent of net sales, compared to $432.2 million, or 44.2 percent of net sales, for the first quarter of last year.

First quarter selling expenses increased $19.9 million to $73.8 million, or 6.9 percent of sales, compared to $53.9 million, or 5.5 percent of sales, in the first quarter of the prior year. The increase was primarily due to increased international advertising and selling expenses.

General and administrative expenses for the first quarter increased $40.1 million to $282.5 million, or 26.3 percent of sales, compared to $242.3 million, or 24.8 percent of sales, in the prior year. The year-over-year quarterly increase was primarily due to Skechers’ focus on long-term global growth, including $13.2 million associated with the Company’s 59 additional domestic and international retail stores, and $18.3 million to support its international growth, of which $9.3 million was due to increased costs in China, $3.4 million for the transition of its South Korean distributor to a joint venture, $1.7 million in support of its new Latin America subsidiary, and $3.4 million in Japan. Domestic wholesale general and administrative expenses in the first quarter increased $8.6 million year-over-year primarily due to increased headcount in the United States to support its brand worldwide.  

“Skechers’ international business, including retail, grew to 51.3 percent of our total sales in the first quarter due to the strength of our brand in numerous markets,” added Mr. Weinberg. “While we see opportunities in the United States to increase our business, we believe international markets continue to present the strongest opportunity for growth. To meet this growth in our international business, we continue to invest in our infrastructure and marketing to support the current and planned global expansion.

Earnings from operations were $124.4 million, a decrease of 10.2 percent over the first quarter of 2016.

Net earnings decreased 3.7 percent to $94.0 million, and diluted net earnings per share were $0.60. The Company’s quarterly effective tax rate in the first quarter was 14.0 percent compared to 21.8 percent over the first quarter of 2016. The Company expects its effective tax rate to be between 14 percent and 19 percent in 2017. In addition, the Company’s gross margins were negatively impacted by approximately $6.1 million due to negative foreign currency translations and approximately $900,000 in pre-tax expenses related to foreign currency transaction losses during the first quarter of 2017. The Company’s operations in the United Kingdom were significantly impacted by currency headwinds as its wholesale sales were up 6.1 percent for the first quarter in local currency but down 8.2 percent in U.S. dollars.

Robert Greenberg, SKECHERS chief executive officer, commented: “In 2005, we surpassed $1 billion in annual sales, and now less than 12 years later, we had our first $1 billion plus in quarterly sales. The key to our success then and now is the drive, dedication and talent of the many people behind this great brand. We look very good from a product standpoint—with innovative, comfortable and beautiful footwear and now apparel—and in our marketing as well—with lifestyle campaigns featuring Rob Lowe, Meghan Trainor, Joe Montana, Howie Long, Sugar Ray Leonard, Brooke Burke-Charvet and Kelly Brook. Our success in performance footwear can be seen in our title sponsorship of the Skechers Performance Los Angeles Marathon, in the Pan-European Ironman where we are the footwear sponsor, and in our many pro golfers, including American medalist Matt Kucher, Canadian Brooke Henderson, Scotland’s Russell Knox, Spaniard Belen Mozo, and American Wesley Bryan, who just earned his first PGA Tour victory.”

Mr. Greenberg continued: “Our global footprint continues to grow with our ongoing success in Canada, Chile and China as well as in India, Australia and Turkey, and many other markets. This success is in part due to the expansion of Skechers retail stores around the world. At quarter end, there were 2,055 Skechers retail stores, including 1,471 third-party-owned locations, of which 551 are in China alone. We’ve come a long way since our first billion dollar year, and our first retail store in Manhattan Beach, but we plan to accomplish much more in product design, marketing and distribution. In the United States, we are the No. 1 Casual, Work, and Walking brand and the No. 2 All Footwear for Women*, and we believe we can reach these coveted positions in numerous other countries around the world. As we’ve begun showing our Spring 2018 lines to accounts this week, I’m looking forward to delivering our back-to-school product in June and July, and continuing to profitably grow Skechers this year and in the coming years.”

Balance Sheet
At year end, cash and cash equivalents was $607.8 million, an increase of $164.0 million, or 37.0 percent over March 31, 2016.

Total inventory, including inventory in transit, was $585.8 million, an increase of $84.0 million or 16.7 percent over March 31, 2016, and a decrease of $114.7 million or 16.4 percent over December 31, 2016. The increase over last year is primarily due to international and is in line with the Company’s backlogs, and growing retail and international wholesale business.

Working capital was $1.32 billion at March 31, 2017 versus $1.07 billion at March 31, 2016.

Mr. Weinberg continued: “We ended the first quarter with low double-digit increases in backlog on a worldwide basis, with all of our business units up a minimum of mid-single digits. Already in April, we’ve achieved high-single digit comps in our Company-owned retail stores, which benefited from Easter falling in April, and successfully launched YOU by Skechers in our stores and on skechers.com.”

Outlook

Based on these key indicators, the Company believes it will achieve net sales in the second quarter in the range of $950 million to $975 million, which would be a second quarter sales record, and earnings per share of $0.42 to $0.47. This projection includes flat to slightly positive sales increases in the Company’s domestic wholesale business, and increases in its international business and Company-owned retail stores.

The Company expects its ongoing capital expenditures for 2017 to be approximately $40 million to $45 million, which includes corporate office upgrades and an additional 50 to 75 Company-owned retail store openings and several store remodels, as well as an additional $25 million for infrastructure primarily in its China joint venture.

First Quarter 2017 Conference Call
The Company will host a conference call today at 1:30 p.m. PT / 4:30 p.m. Eastern Time to discuss its first quarter 2017 financial results. The call can be accessed on the Investor Relations section of the Company’s the website at www.skx.com. For those unable to participate during the live broadcast, a replay will be available beginning April 20, 2017, at 7:30 p.m. ET, through May 4, 2017, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13658499.

*SportsOneSource, April 1, 2017

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 2,055 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 and the Middle East, and wholly-owned subsidiaries in Canada, Japan, throughout Europe and Latin America. 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, 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 uncertainty of sustained recovery in Europe; 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 the Company’s annual report on Form 10-K for the year ended December 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.

###

1

SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
(In thousands)

                 
    March 31, 2017   December 31,
            2016
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 607,813   $ 718,536
Trade accounts receivable, net
  551,598   326,844
Other receivables
  20,504   19,191
 
               
Total receivables
  572,102   346,035
Inventories
  585,814   700,515
Prepaid expenses and other current assets
  60,568   62,680
 
               
Total current assets
  1,826,297   1,827,766
Property, plant and equipment, net
  502,658   494,473
Deferred tax assets
  26,059   26,043
Other assets
  50,697   45,388
 
               
Total non-current assets
  579,414   565,904
 
               
TOTAL ASSETS
  $ 2,405,711   $ 2,393,670
 
               
LIABILITIES AND EQUITY
               
Current Liabilities:
               
Current installments of long-term borrowings
  $ 1,788   $ 1,783
Accounts payable
  423,902   520,437
Short-term borrowings
  6,303   6,086
Accrued expenses
  81,590   93,424
 
               
Total current liabilities
  513,583   621,730
Long-term borrowings, net of current installments
  68,775   67,159
Deferred tax liabilities
  431   412
Other long-term liabilities
  20,408   18,855
 
               
Total non-current liabilities
  89,614   86,426
Total liabilities
  603,197   708,156
Stockholders’ equity:
               
Skechers U.S.A., Inc. equity
  1,707,156   1,603,633
Noncontrolling interests
  95,358   81,881
 
               
Total equity
  1,802,514   1,685,514
 
               
TOTAL LIABILITIES AND EQUITY
  $ 2,405,711   $ 2,393,670
 
               

2

SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
(In thousands, except per share data)

                 
    Three Months Ended March 31,
    2017   2016
Net sales
  $ 1,072,808   $ 978,794
Cost of sales
  596,310   546,642
 
               
Gross profit
  476,498   432,152
Royalty income
  4,230   2,625
 
               
 
  480,728   434,777
 
               
Operating expenses:
               
Selling
  73,809   53,878
General and administrative
  282,496   242,349
 
  356,305   296,227
 
               
Earnings from operations
  124,423   138,550
Other expense:
               
Interest, net
  (1,077 )   (1,122 )
Other, net
  696   2,779
 
               
 
  (381 )   1,657
 
               
Earnings before income tax expense
  124,042   140,207
Income tax expense
  17,407   30,568
 
               
Net earnings
  106,635   109,639
Less: Net earnings attributable to noncontrolling interests
  12,640   12,027
 
               
Net earnings attributable to Skechers U.S.A., Inc.
  $ 93,995   $ 97,612
 
               
Net earnings per share attributable to Skechers U.S.A., Inc.:
               
Basic
  $ 0.61   $ 0.63
 
               
Diluted
  $ 0.60   $ 0.63
 
               
Weighted average shares used in calculating earnings per share attributable to Skechers U.S.A., Inc.:
               
Basic
  155,097   153,745
 
               
Diluted
  155,927   154,818
 
               

3


The following information was filed by Skechers Usa Inc (SKX) on Thursday, April 20, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Skechers Usa Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Skechers Usa Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account