Skechers Profits Soar as Q1 Revenues Catapult 44%

Net earnings for the first quarter of 2010 were $56.3 million, or $1.15 a share, from $8.2 million, or 15 cents, a year ago. The first quarter 2010 earnings are based on a higher tax rate of 31.5%; we currently expect our annual effective tax rate to be approximately 32% for 2010.

“Our first quarter net sales of nearly $500 million and earnings per share of $1.15 mark the highest quarterly sales and EPS in our nearly 18-year history, and continue the strong momentum we experienced in the second half of 2009,” began David Weinberg, chief operating officer and chief financial officer. “The significant revenue growth in our domestic and international wholesale and retail channels, increased profitability and much improved margins are evidence that we continue to grow market share in the global footwear market. We believe our momentum is the result of our strong product offering, backed by targeted marketing efforts, strong execution, and increased brand awareness globally.”

Gross profit for the first quarter of 2010 was $237.4 million or 48.2% of net sales compared to $125.4 million or 36.5% of net sales in the first quarter of last year.

Robert Greenberg, SKECHERS chief executive officer, commented: “Achieving record quarterly revenues is an incredible way to start both a new year and a new decade. We are extremely pleased with our growth �€“ and what it means for us, the SKECHERS brand and our position in the world market. We believe challenging times, such as the past couple of years, present opportunities. We believe that our decisive actions in 2009, including the continued development of new product and consistent marketing efforts, resulted in our accelerated growth, improved profitability, and a growing buzz about SKECHERS in the first quarter. We see this momentum continuing for us and many of our retail partners as we remain dedicated to delivering fresh men�€�s, women�€�s and kids�€� product and developing new marketing campaigns to support these efforts, including our latest with Hall of Fame quarterback Joe Montana. The strong growth we are experiencing is primarily the result of the positive reaction of consumers in the United States to our product offering. We believe this enthusiasm and acceptance is beginning to spread around the world as these new styles are just reaching South America, Europe, Asia, and beyond. It is an exciting place to be, the Number 2 athletic brand in the United States, and we are eager for continued growth in 2010 and throughout this decade.”

“With strong April sales in our wholesale and international business, double digit retail store comps, accelerating backlog, and the addition of 20 to 25 more retail stores in the United States and in new markets in Europe this year, we believe our momentum will continue throughout the year. More new relevant men�€�s, women�€�s and kids�€� product will also be delivering for back to school in June and July, which can result in a shift in revenue between the second and third quarters,” Weinberg added. “We are well-positioned for growth in 2010 and beyond with clean inventory, a cash position of $326 million at quarter end, and a new, more efficient, 1.8 million-square-foot distribution center in Rancho Belago, California in development.”