Skechers USA, Inc. said sales for the second quarter ended June 30, 2009 were $299.0 million, down 15.7% from sales of $354.6 million a year ago. Net loss was $5.9 million compared to net earnings of $14.6 million in the second quarter of 2008. Second quarter loss per diluted share was 13 cents based on 46.3 million weighted average shares outstanding as compared to net earnings per diluted share of 31 cents based on 46.8 million weighted average shares outstanding in the second quarter of 2008.
“Our second quarter 2009 sales are in line with our recent expectations in light of todays soft retail environment,” said Fred Schneider. “Our revenues continue to be negatively impacted by the weakness in the global economy, yet we have reacted in a strategic and aggressive manner to these challenges by continuing to focus on managing our inventory and expenses, and further strengthening our product offering and balance sheet. While we continued to experience margin pressure in the early part of the quarter, margins improved in June and we believe our inventory is now clean. In addition, our expenses are in line with our current business. Importantly, we are maintaining our position in the global footwear market and we currently expect to be profitable in the second half of the year.”
For the six months ended June 30, 2009, net sales were $642.4 million compared to net sales of $739.5 million in the first six months of 2008. Net earnings were $2.3 million, compared to net earnings of $47.5 million in the first six months of 2008. Net earnings per diluted share in the first six months of 2009 were 5 cents per share on 46.4 million diluted shares outstanding versus net earnings of $1.02 per share on 46.7 million diluted shares outstanding for the same period last year. Included in diluted earnings per share for the first six months of 2009 is a $1.9 million reduction in income tax expense or 4 cents per share adjustment recorded in the first quarter that relates to the prior year.
Gross profit for the second quarter of 2009 was $122.6 million or 41.0 percent of net sales compared to $157.2 million or 44.3 percent of net sales in the second quarter of last year. Gross profit for the first six months of 2009 was $248.0 million or 38.6 percent of net sales versus $329.4 million or 44.5% of net sales in the first six months of 2008.
Robert Greenberg, Skechers CEO, commented: “We just completed three weeks of product review with our key accounts and are pleased with the reaction to our Spring 2010 collections for each of our brands. Though many of these accounts continue to feel the impact of the weak economy, we believe they are looking to Skechers to meet their immediate needs and for the coming Spring season due to the relevance of our styling and the value we offer consumers. We are continuing to develop fresh product and support our brands with targeted marketing, including new print campaigns and multiple commercials for Skechers Kids featuring our cast of characters; Skechers Men and Women; and several new spots for our fashion brands, including one with Vanessa Hudgens for Red by Marc Ecko. As we continue to look at opportunities to grow our business, we have selectively opened new Skechers stores in the United States, established a subsidiary operation in Chile, and introduced existing lines into many key countries, and we are expanding into new markets. As a well-recognized brand and a financially strong company trusted by consumers and our wholesale partners, we believe we are well-positioned for the current economic climate as well as for profitable growth when the global economy begins to improve.”
“The last year has been a difficult one for many companies, retailers and consumers around the globe. Like many others, we too have been adversely affected by the economic climate, and have adjusted our inventory levels and expenses to meet the lower demand,” stated David Weinberg, chief operating officer of Skechers. “We are beginning to see positive improvements in our domestic and international sales trends, and our new product offerings have been well received and are testing well. We believe our cash position of $257 million, which increased by $184 million during the second quarter in part due to the redemption of our auction rate securities, provides us ample liquidity to effectively operate in a difficult retail environment. With a new untapped credit facility of $250 million and a cash balance in excess of $5.50 per share, we believe we are in a great position to capitalize on opportunities as they arise and to further grow our business around the world.”
SKECHERS U.S.A., INC.
|CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS|
|(In thousands, except per share data)|
|Three Months Ended June 30,||Six Months Ended June 30,|
|Cost of sales||176,373||197,381||394,414||410,131|
|General and administrative||95,848||98,857||193,886||198,079|
|Other income (expense):|
|Earnings (loss) before income taxes||(7,812||)||21,306||(1,213||)||70,919|
|Income tax expense (benefit from)||(1,186||)||7,045||(1,939||)||23,814|
|Net income (loss)||(6,626||)||14,261||726||47,105|
|Less: Net income (loss) attributable to noncontrolling interest||(699||)||(380||)||(1,567||)||(380||)|
|Net earnings (loss) attributable to Skechers U.S.A., Inc.||$||(5,927||)||$||14,641||$||2,293||&|