Skechers USA reported sales for the third quarter were $554.6 million, compared to $405.4 million in the third quarter of 2009, an increase of 36.8%. Net earnings jumped 48.6% to $36.4 million, or 74 cents a share, from $24.5 million, or 52 cents, a year ago.
Income from operations was $55.6 million, compared to $32.4 million in the third quarter of 2009, an increase of 71.3%.
“Our third quarter net sales of over $550 million represent a new quarterly record and come on the heels of record sales for the first and second quarters. The continued demand for our diverse product offering resulted in growth across our domestic and international wholesale and retail channels,” began David Weinberg, chief operating officer and chief financial officer. “While the demand for our product remains high and we continue to experience growth in many categories, including toning, several accounts over-booked for back to school and canceled orders, resulting in more inventory than initially planned. We expect to strategically work through this newer inventory at reasonable margins over the next six months or so.”
Weinberg added: “We continued to see strong results in operating income, net earnings and earnings per diluted share for the quarter, and our combined net sales over the first nine months exceeded total net sales for 2009, which is a result of our continued dedication to developing and growing new footwear categories, and then delivering innovative and fresh products, which are supported by comprehensive marketing campaigns worldwide.”
Gross profit for the third quarter of 2010 was $252.7 million, compared to $183.7 million in the third quarter of 2009. Gross margin was 45.6% for the third quarter of 2010, compared to 45.3% in the third quarter of 2009. Gross profit for the first nine months of 2010 was $727.7 million, or 46.9% of net sales, versus $431.8 million, or 41.2% of net sales, in the first nine months of 2009.
For the nine months ended September 30, 2010, net sales were $1.552 billion compared to net sales of $1.048 billion in the first nine months of 2009. Net earnings for the first nine months of 2010 were $132.9 million, compared to net earnings of $26.8 million in the first nine months of 2009. Net earnings per diluted share in the first nine months of 2010 were $2.71 per share on 49.0 million diluted shares outstanding, versus $0.57 per share on 46.6 million diluted shares outstanding for the same period last year.
Robert Greenberg, SKECHERS chief executive officer, commented: “We just finished our biggest sales quarter in the company's 18-year history, and our best back-to-school season. Our kids' business continued to grow strongly, supported by commercials featuring our well-known cast of animated characters, and we continued to dominate the toning category with a 55 percent share of the U.S. market, according to SportsOneSource in September. The growth we experienced in the toning category also came at a time when sales in this segment are not as robust as they are during other times of the year. The enthusiasm for our recently launched lines has spread around the world, where we experienced double digit improvements in many key countries, which we believe are still poised for growth. We are supporting our product and growth with more print, outdoor and TV, including campaigns featuring football legend Joe Montana, basketball great Karl Malone, fitness celebrity Denise Austin, and 'Dancing with the Stars' co-host Brooke Burke. Our marketing has never been more exciting, and we have so much more coming down the line. In addition, we continue to make significant strides in product development for men, women and kids, and are excited about the delivery of fresh styles and our new lines for Holiday 2010 and Spring 2011. We are in a very strong position in the market with a steady buzz from consumers, the media and our retail partners. We have had accounts in our showrooms over the past week and a half and are pleased with their reaction to our new offerings. It has been a record first nine months this year, and we look forward to a great year-end for 2010 and new challenges and records in 2011.”
“SKECHERS' sales continue to be strong and consistent across our wholesale and retail businesses in the United States and overseas with margins in line with our business model and our product offering the best it has ever been,” Weinberg added. “We are now evaluating our expense structure to ensure our expenditures will be in line with the current sales trend. Based on our double-digit backlogs, strong sell-throughs and positive comps in our retail stores, along with a cash position of approximately $248 million, we believe our momentum will continue.”
