Skechers USA, Inc. reported that fiscal year 2005 net sales increased 9.4% to $1.006 billion as compared to net sales of $920.3 million in 2004. Net earnings for 2005 were $44.7 million, or $1.06 per diluted share, versus net earnings of $23.6 million in 2004, 59 cents per diluted share, for the prior year.

Net sales for the fourth quarter of 2005 increased 8.2% to $223.5 million as compared to $206.5 million in the fourth quarter of 2004. Net earnings for the fourth quarter of 2005 were $5.9 million, or 14 cents per diluted share, versus net earnings of $2.1 million, or five cents per diluted share, in the fourth quarter of 2004.

“We are very pleased with our record fourth quarter and full-year sales. Our record fourth quarter, combined with our record first and second quarters and strong third quarter, resulted in the highest annual revenues in the Company's history,” began Fred Schneider, chief financial officer of Skechers.

Gross profit for 2005 was $420.5 million compared to $370.9 million in 2004. Gross margin for 2005 was 41.8% versus 40.3% for 2004. Gross profit for the fourth quarter of 2005 was $93.0 million compared to $82.0 million in the fourth quarter of 2004. Gross margin in the fourth quarter 2005 was 41.6% versus 39.7% for the fourth quarter of 2004.

“Our record sales and improved margins are the result of our dedicated efforts to consistently deliver trend-right styles, which has led to an increased demand for our in-season product and continued growth in our fashion and street lines,” stated David Weinberg, chief operating officer of Skechers. “With our footwear on target, we grew our domestic and international wholesale and Skechers-owned retail businesses with increased profitability through cost management on the expense and operational side of the business.”

Robert Greenberg, the Company's chief executive officer, stated: “For Skechers, 2005 was an incredibly successful year as we reached a billion dollars in net sales – today Skechers is a worldwide, multi-brand footwear company with more than 20 divisions. Our success is a testament to the strength and relevance of the Skechers brand and the impact our new brands on the marketplace. Throughout the year, we have consistently delivered strong selling styles in our now signature Skechers looks, as well as developed an array of new styles that have proven to be on the mark.”

Mr. Greenberg continued: “We are particularly pleased with the success of our growing fashion and street lines, as we've seen great improvements in the Michelle K, Mark Nason and Marc Ecko Footwear lines. We are equally excited about the introduction of Kitson footwear in the fourth quarter as well as the launch of the Game's signature sneaker, Hurricane by 310, which reached stores in late December and has enjoyed great sell-throughs at retail. We believe Kitson, combined with the power of its eponymous boutique, and 310 with the introduction of Best Actor Oscar nominee Terrence Howard as the new face of the brand both have tremendous potential. As we begin 2006 we are excited by our recent reception at WSA's The Shoe Show and the many opportunities for Skechers this coming year and as we look towards the future.”

Mr. Weinberg continued: “Our very strong finish to the year coupled with our key performance indicators, including the recent Shoe Show, gives us confidence that our momentum will continue in 2006. We believe that our consistent performance over the past two years and our new position as a leading billion dollar brand marks a new era for Skechers – one of increased profitability and renewed growth.”

SKX now expects first quarter 2006 net sales to be in the range of $270 million to $280 million and diluted EPS in the range of 29 cents to 34 cents per share.

                         SKECHERS U.S.A., INC.
                 (In thousands, except per share data)

                                Three Months Ended Twelve Months Ended
                                   December 31,       December 31,
                                  2005     2004       2005     2004

Net sales                       $223,494 $206,472 $1,006,477 $920,322
Cost of sales                    130,457  124,497    585,995  549,465
           Gross profit           93,037   81,975    420,482  370,857
Royalty income, net                1,556    2,675      6,628    7,060
                                  94,593   84,650    427,110  377,917
Operating expenses:
   Selling                        15,042   18,705     81,378   79,673
   General and administrative     68,984   64,102    269,436  248,999
                                  84,026   82,807    350,814  328,672
Earnings from operations          10,567    1,843     76,296   49,245

Other income (expense):
   Interest, net                    (677)  (1,678)    (4,786)  (7,973)
   Other, net                       (311)  (2,023)     1,287   (2,552)
                                    (988)  (3,701)    (3,499) (10,525)
Earnings before income taxes       9,579   (1,858)    72,797   38,720
Income tax expense (benefit)       3,678   (3,986)    28,080   15,167
          Net earnings            $5,901   $2,128    $44,717  $23,553

Net earnings per share:
   Basic                           $0.15    $0.05      $1.13    $0.61
   Diluted                         $0.14    $0.05      $1.06    $0.59