Skeckers USA, Inc. reported that net sales for the first quarter of 2004 rose 6.2 percent to $221.5 million compared to $208.6 million in the first quarter of 2003. Net earnings for the quarter were $7.0 million versus net earnings of $8.5 million in the first quarter of the prior year.
Net earnings per diluted share were $0.18 on 42,448,000 shares outstanding, above First Call consensus of $0.14 per diluted share, compared to net earnings of $0.22 per diluted share on 41,480,000 diluted shares outstanding in the first quarter of 2003.
Gross profit for the first quarter of 2004 was $89.7 million compared to $90.3 million in the first quarter of last year. Gross margin was 40.5 percent compared to 43.3 percent in the first quarter of 2003. Selling, general and administrative expenses declined to 34.9 percent of sales in the first quarter compared to 35.8 percent of sales in the first quarter of prior year.
“We are pleased with our first quarter 2004 results,” began David Weinberg, chief financial officer of SKECHERS USA, Inc. “Compared to the same period last year, we increased sales, significantly reduced our inventory levels and ended with a cash balance in excess of $115 million dollars. We believe this improvement in our business, which began at the close of 2003, is a result of a growing demand for our product in the United States and in key international markets such as the United Kingdom and Germany. Our increased revenues are also the result of licensing royalties and additional retail stores – including the key locations of New Yorks Times Square and Las Vegas Fashion Show Mall.”
Mr. Weinberg continued: “We believe that the positive momentum across the majority of our business segments results from the many initiatives we undertook over the past year. We are encouraged by our Spring 2004 sales, the positive reaction to our back-to-school product, as well as the sell-throughs we are experiencing at our company-owned retail stores and our wholesale accounts. Based upon these indicators and our improved balance sheet, we believe that we will continue to see improved performance for the remainder of the year.”
Robert Greenberg, SKECHERS chief executive officer, said: “At this time last year and throughout 2003, our goal was to gain share of the global footwear market, increase sales and profitability, and reward stockholders over the long-term. We believe we are on track, having completed a great first quarter driven by exceptional product. We believe that this momentum will continue as many product and licensing initiatives implemented in 2003 reach the retail floor for back-to-school and fall 2004. Current plans include three new footwear lines – 310 Motoring, and Rhino Unlimited for men, and Rhino Red for women, the coordinating shoe lines for Ecko Unlimited and Ecko Red apparel.”
Mr. Greenberg continued: “We have built a relevant brand through the strength of our image, product and marketing, along with the efforts of our skilled management team. We will continue to concentrate on our key initiatives and key areas of business in an effort to positively impact sales and earnings.”
The Company now expects second quarter 2004 sales to be in the range of $230 million to $240 million and earnings per share in the range of $0.12 to $0.17 per share.
