Skechers USA reported sales for the fourth quarter of 2010
increased 17.0% to $454.6 million as compared to $388.6 million in the fourth
quarter of 2009. Due to lower gross margins, net earnings tumbled 88.5% to $3.2
million, or 7 cents a share, versus $27.9 million, or 58 cents, a year ago.
Earnings from operations in the fourth quarter of 2010 were
$1.4 million versus income from operations of $41.7 million in the fourth
quarter of 2009. Gross margin in the fourth quarter 2010 was 40.5% versus 48.7%
for the fourth quarter of 2009.
Fiscal year 2010 net sales were $2.006 billion as compared
to net sales of $1.436 billion in 2009. Earnings from operations for 2010 were
$196.7 million versus $72.6 million in 2009. Net earnings for 2010 were $136.1
million, or $2.78 a share, versus earnings of $54.7 million, or $1.16, in 2009.
Gross profit for 2010 was $911.9 million compared to $621.0 million in 2009.
Gross margin for 2010 was 45.4% versus 43.2% for 2009.
Robert Greenberg, Skechers chief executive officer,
commented: “2010 was truly an amazing year for Skechers and our many
product initiatives as we reached $2 billion in annual sales. Earlier this
month, we were named Company of the Year for 2010 by Footwear Plus, and we're
the No. 2 lifestyle footwear brand and the leading source for toning footwear
in the United States. In 2010, we broadened our product range with increased
kids offerings, fresh fitness styles, and a larger assortment of boots.
Consistent with our approach of supporting our product through advertising, our
kids' commercials featured our animated characters, and our toning products
incorporated a diverse collection of celebrities, including TV personality
Brooke Burke, football legend Joe Montana and former basketball star Karl
Malone. Our domestic business increased by 48.3%, our international wholesale
business increased by 32.9% and our company-owned retail sales increased by
27.6%, which reflects the combined power of our product and marketing efforts.
We continue to develop new and on target product, which we unveiled to our key
accounts during FFANY in December, as well as meetings at our new corporate
offices last month. We recently enlisted the power of reality star Kim
Kardashian, whose 5 million plus Twitter followers and constant media attention
helped drive her Shape-ups Super Bowl TV spot to headline news earlier this
month. We see numerous opportunities to continue to strategically grow our
business around the world, including through the addition of retail stores and
further expansion of our international business. We are energized by our record
sales, the enthusiasm for our product by both retailers and consumers, and the
many opportunities we see in the marketplace in 2011 and beyond.”
David Weinberg, Skechers chief operating officer and chief
financial officer, stated: “As we look forward, we are assessing all areas
of our business to position ourselves to profitably grow in the future.
Currently, we are carefully reviewing our expenses, which have increased in
part due to significant growth over the past year. Our inventory increased by
$175 million year-over-year, of which approximately $65 million is to support
the increases in our international and retail expansion, and $110 million is
related to our domestic wholesale business. As we aggressively work through our
inventory position, we anticipate our domestic wholesale revenues and margins
will be impacted in the first and second quarters, but we believe they will
improve in the second half of the year. And with a healthy double-digit backlog
in international as well, we believe our growth will continue to accelerate
around the world. Our stores saw positive comps of over 3% for the quarter and
over 15% for the year, and we are planning to open another 30 to 35
company-owned Skechers stores this year. We expect improvements to
profitability in the latter half of the year when we anticipate a return to
full-price selling with an improved margin profile from our new product
offering. We are confident that the demand for our brand remains very high
globally, and our momentum will continue in 2011.”
| |
||||||||||||||||
| SKECHERS U.S.A., INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
|
|
Three Months Ended | Twelve Months Ended | ||||||||||||||
|
|
|
December 31, |
|
December 31, | ||||||||||||
|
|
|
2010 | 2009 |
|
2010 | 2009 | ||||||||||
Net sales |
|
$ |
454,619 |
|
|
$ |
388,620 |
|
|
$ |
2,006,868 |
|
|
$ |
1,436,440 |
|
Cost of sales |
|
270,427 |
|
199,368 |
|
1,094,962 |
|
815,430 |
||||||||
Gross profit |
|
|
184,192 |
|
|
|
189,252 |
|
|
|
911,906 |
|
|
|
621,010 |
|
Royalty income |
|
1,420 |
|
633 |
|
4,568 |
|
1,655 |
||||||||
|
|
|
185,612 |
|
189,885 |
|
916,474 |
||||||||||
