Skechers Sees 30% Hike in Q4 Sales

Income from operations in the fourth quarter of 2009 was $41.7 million, versus an operating loss of $35.1 million in the fourth quarter of 2008.

Gross profit for the fourth quarter of 2009 was $189.3 million compared to $95.0 million in the fourth quarter of 2008. Gross margin in the fourth quarter 2009 was 48.7% versus 31.9% for the fourth quarter of 2008.

“We ended 2009 with a record fourth quarter – a 30 percent sales increase over the fourth quarter 2008, a significant achievement in a difficult economic environment,” began David Weinberg, chief operating officer and chief financial officer. “Our strong margins are a result of our ability to manage our expenses, the strength of our SKECHERS retail business, more in-line goods selling through and less close-out product, which was primarily liquidated in the first half of the year.”

Fiscal year 2009 net sales were $1.436 billion as compared to net sales of $1.441 billion in 2008. Income from operations for 2009 was $72.6 million versus $57.9 million in 2008. Net earnings for 2009 were $54.7 million, or $1.16 a share, versus net earnings of $55.4 million, or $1.19, a year earlier.

Gross profit for 2009 was $621.0 million compared to $595.9 million in 2008. Gross margin for 2009 was 43.2% versus 41.4% for 2008.

Weinberg continued: “We also believe that achieving a 25 percent increase in annual operating profit on essentially flat sales is a meaningful accomplishment. While the economy remains a factor, SKECHERS experienced strong momentum in the second half of the year, and saw strong sales and gross margin improvement in the United States and in select countries around the world, with double digit growth in many markets.”

Robert Greenberg, Skechers chief executive officer, commented: “We are all aware of the global economic challenges in 2009, but for SKECHERS, the year was a particularly exciting one as we successfully took advantage of new opportunities to grow our business with fresh styles and product lines that brought our brand into new stores and increased our shelf space in many others. We believe our record third and fourth quarters in such difficult economic times is a true testament to the strength of our brand and our product. Consumers embraced our 2009 product offering, and retailers are energized about our Spring and Fall 2010 collections. We continue to develop more unique and compelling product, and support our brands with our integrated approach to marketing. We are keenly focused on growing our international business, and believe our newly added international subsidiaries in South America and distributors in Mexico and India have strong potential as we have only scratched the surface in these countries. We will also build on our meaningful retail base with more new stores in the United States and markets in Europe, and we are taking a proactive approach to our e-commerce business through redesign and an increased presence on social media sites. We believe we are in a strong position from a product, marketing, distribution and financial standpoint as we begin the new year, and we are confident that we will continue to grow in 2010.”

“For SKECHERS, all indicators are pointing to growth in 2010,” stated Weinberg. “Our backlog is up 40 percent as of December 31, 2009 over the prior year; combined domestic and international store comps increased 17.4 percent for the fourth quarter; and we are just completing five weeks of pre-lines with key accounts, which reacted very positively to our new product. Our infrastructure is already in place in Europe to support our continued growth, and we will be breaking ground for our new 1.8 million square foot distribution center in Rancho Belago, California, in the first or second quarter of 2010 – creating a much more efficient distribution operation. With a cash and short-term investment position of $296 million, clean inventory, strong product that is checking well at retail and marketing to support it, we believe we are especially well-positioned to grow in 2010.”