SKECHERS USA, Inc. net sales for the second quarter of 2006 rose 10.7% to $292.2 million compared to $263.9 million in the second quarter of 2005. Net earnings for the quarter were $17.6 million versus net earnings of $15.9 million in the second quarter of 2005. Net earnings per diluted share were 40 cents on 46,146,000 diluted shares outstanding versus diluted earnings per share of 38 cents on 44,120,000 weighted average shares outstanding for the second quarter of 2005.

“We are extremely pleased with our business at the close of the second quarter. This was our highest sales for any quarter in our 14 year history – even with the shift of revenues from late June into July,” stated David Weinberg, chief operating officer of SKECHERS.

“This shift resulted in slightly lower sales than we projected for the quarter, but we believe we will more than make up for this in the third quarter. Strong early indicators for the third quarter of 2006 include double-digit comp store sales, strong sell-throughs, and an increase in year-over-year backlog from 19 percent as of March 31, 2006 to 34 percent as of June 30, 2006. These trends point to the continued acceleration of our brand in the marketplace. The growth in our backlog from the first quarter to the second quarter gives us further evidence as to the strength of our brands as well as the shift of some revenues into the third quarter.”

Mr. Weinberg continued: “Our record second quarter net sales were the result of growth in key SKECHERS men’s and women’s lines, as well as strong double-digit growth across our fashion brands, including 310 Motoring, Unltd. by Marc Ecko, Rhino Red, Mark Nason, Michelle K and the children’s division of these brands. This broad-based strength was reflected in domestic wholesale and retail sales, as well as our international wholesale and retail businesses.”

For the six months ended June 30, 2006, net sales were $569.7 million compared to net sales of $510.1 million in the first six months of 2005. Net earnings were $34.2 million, compared to net earnings of $26.2 million in the first six months of 2005. Net earnings per diluted share in the first six months of 2006 were $0.77 versus net earnings per share of $0.62 for the same period last year.

Gross profit for the second quarter of 2006 was $130.7 million compared to $111.5 million in the second quarter of 2005. Gross margin was 44.7 percent compared to 42.3 percent in the second quarter of 2005. Gross profit for the first six months of 2006 reached $249.1 million, or 43.7 percent of net sales versus $212.0 million, or 41.6 percent of net sales in the first six months of 2005.

Robert Greenberg, chief executive officer of SKECHERS, said: “2006 is shaping up to be our best year ever – in sales, in product and in marketing. We are entering our fifteenth year of business with an amazing line up of globally recognized brands and new divisions – including the action sports/skate brand Zoo York and SoHo Lab. Recent prelines with key accounts validated our belief that our product is on target.

“In addition, we are launching a pervasive marketing campaign that will showcase our brands on television, in malls, in magazines, and at busy shopping and travel destinations throughout the fall. Our marketing breadth is stronger than ever – and we have a growing roster of talented celebrities as the spokespeople for our brands: actor Terrence Howard for 310, hip hop recording artist The Game, and chart-topping singer Carrie Underwood. New to the SKECHERS family is multi-platinum recording artist and star Ashlee Simpson, who will be the new face of SKECHERS around the world through 2007.

“We are looking forward to what we believe is going to be a stellar back-to-school and fall, and are eager for next week’s WSA trade show and the coming seasons. We believe our product is on target and in demand, and our company is operating better than ever. We believe this will result in more record quarters and continued year-over-year improvements.”

“Our record second quarter results of more than $292 million combined with record first quarter 2006 sales has resulted in a great first half of the year and a great follow up to last year’s $1.0 billion dollars in sales,” began Fred Schneider, chief financial officer of SKECHERS. “This continued sales growth and strong margins are a testament to the momentum and strength of SKECHERS and the growing relevance of our fashion brands. With backlogs significantly higher than a year ago, a growing retail base, and our fashion brands taking hold, we believe this positive trend will continue.”

The Company now expects net sales for the third quarter of to be in the range of $310 million to $320 million and net earnings per diluted share of 37 cents to 42 cents.


                         SKECHERS U.S.A., INC.
             CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                              (Unaudited)
                 (In thousands, except per share data)

                               Three Months Ended   Six Months Ended
                                     June 30,            June 30,
                                   2006      2005      2006      2005
                               --------- --------- --------- ---------

Net sales                      $292,183  $263,928  $569,748  $510,147
Cost of sales                   161,448   152,392   320,638   298,175
                               --------- --------- --------- ---------
           Gross profit         130,735   111,536   249,110   211,972
Royalty income, net                 559     1,990     1,553     3,074
                               --------- --------- --------- ---------
                                131,294   113,526   250,663   215,046
                               --------- --------- --------- ---------
Operating expenses:
   Selling                       31,061    20,973    51,248    39,146
   General and administrative    72,803    65,282   144,736   131,612
                               --------- --------- --------- ---------
                                103,864    86,255   195,984   170,758
                               --------- --------- --------- ---------
Earnings from operations         27,430    27,271    54,679    44,288
                               --------- --------- --------- ---------

Other income (expense):
   Interest, net                    (85)   (1,627)     (544)   (3,197)
   Other, net                        53      (204)      259     1,347
                               --------- --------- --------- ---------
                                    (32)   (1,831)     (285)   (1,850)
                               --------- --------- --------- ---------
Earnings before income taxes     27,398    25,440    54,394    42,438
Income tax expense                9,782     9,523    20,180    16,254
                               --------- --------- --------- ---------
          Net earnings          $17,616   $15,917   $34,214   $26,184
                               ========= ========= ========= =========


Net earnings per share:
   Basic                          $0.43     $0.40     $0.84     $0.66
                               ========= ========= ========= =========
   Diluted                        $0.40     $0.38     $0.77     $0.62
                               ========= ========= ========= =========

Weighted average shares:
   Basic                         41,077    39,580    40,687    39,484
                               ========= ========= ========= =========
   Diluted                       46,146    44,120    45,802    44,256
                               ========= ========= ========= =========