- Fourth Quarter 2013 Net Sales
Increased 13.9 Percent to $450.7 Million
- Fourth Quarter 2013 Net Earnings of
$14.2 Million
- Fourth Quarter 2013 Diluted Earnings
Per Share of $0.28
- Fiscal Year 2013 Net Sales Increased
18.3 Percent to $1.846 Billion
SKECHERS USA, Inc. (NYSE:SKX) today announced financial results
for the fourth quarter and fiscal year ended December 31, 2013.
Net sales for the fourth quarter of 2013 were $450.7 million
compared to $395.6 million in the fourth quarter of 2012. Gross
profit for the fourth quarter of 2013 was $200.6 million or 44.5
percent of net sales compared to $168.5 million or 42.6 percent of
net sales in the fourth quarter of 2012. Earnings from operations
in the fourth quarter of 2013 were $17.1 million compared to
earnings from operations of $8.0 million in the fourth quarter of
2012. The Company’s effective tax rate for the year-ended December
31, 2013, was 26.0 percent, which was down from the forecasted rate
of 31.9 percent at the close of the third quarter 2013. This was
due to increased international and slightly decreased domestic
profitability. The Company expects improved international sales and
profitability to continue to have a positive impact on its 2014
effective tax rate, which is expected to be between 25 percent and
30 percent.
“The momentum we experienced in the first nine months of 2013
continued in the fourth quarter, which resulted in the second
highest fourth quarter sales in the Company’s history and a 13.9
percent net sales increase for the period on top of last year’s
fourth quarter net sales gain of 39.7 percent,” began David
Weinberg, SKECHERS chief operating officer and chief financial
officer. “The growth is related to the strong product successes we
are experiencing across our men’s, women’s, and kids’ categories,
which resulted in double-digit increases in our Company-owned
retail and domestic wholesale businesses, and single-digit
increases in our international and e-commerce businesses. Further
indication of the strength of our product is the 12.8 percent comp
store sales increases in our worldwide Company-owned retail stores
during the fourth quarter.”
Net earnings for the fourth quarter of 2013 were $14.2 million
compared to net earnings of $4.0 million in the fourth quarter of
2012. Net earnings per diluted share in the fourth quarter of 2013
were $0.28 based on 50.7 million weighted average shares
outstanding compared to $0.08 based on 50.3 million weighted
average shares outstanding in the fourth quarter of 2012.
Fiscal year 2013 net sales were $1.846 billion compared to net
sales of $1.560 billion in 2012. Gross profit for 2013 was $818.8
million or 44.4 percent of net sales compared to $683.3 million or
43.8 percent of net sales in 2012. Earnings from operations for
2013 were $93.6 million compared to $22.3 million in 2012.
Net earnings for 2013 were $54.8 million compared to $9.5
million in 2012. Net earnings per diluted share for fiscal year
2013 were $1.08 based on 50.6 million weighted average shares
outstanding versus $0.19 based on 49.9 million weighted average
shares outstanding in the prior year.
Robert Greenberg, SKECHERS chief executive officer, commented:
“Skechers has always been a product focused company, but in 2013,
we challenged ourselves to deliver key styles from every one of our
divisions. This more diversified product approach resulted in
strong sales across our distribution channels. With our broad
assortment of products, we weathered the unseasonably cold winter
in the Midwest and Northeast thanks to one of our strongest boot
collections, and the unseasonably warm weather in the West thanks
to one of our strongest Sport collections. We were also honored as
Brand of the Year for Skechers GO from Footwear News, and received
the 2013 Excellence in Design Awards for Running and Kids footwear
from Footwear Plus—two significant recognitions from leading trade
magazines. The momentum we have been experiencing in the United
States reached multiple markets around the world, resulting in
sales improvements in Europe, Asia, the Middle East, Australia and
South America. We supported our many divisions with a multi-level
marketing campaign centered around television advertising. In the
fourth quarter, these included campaigns with Brooke Burke-Charvet
for both Relaxed Fit from Skechers and Bobs from Skechers
campaigns, and two spots featuring sports icons Joe Montana and
Mark Cuban for our men’s Relaxed Fit by Skechers footwear. This
quarter, we launched a new commercial for Skechers GOrun Ride 3
featuring elite runner and Olympic medalist Meb, who won the
Houston Half Marathon last month. Our focus is to continue to
deliver innovative, in-demand footwear that consumers around the
globe will seek out, and support our product with impactful
marketing. We are confident we can achieve this efficiently and
continue to profitably grow our business through 2014.”
David Weinberg continued: “We believe 2013, with our second
highest annual net sales ever, was the beginning of a growth trend
for SKECHERS that we see continuing through 2014. Key performance
indicators of this momentum are the approximately 30 percent
increase in our combined worldwide backlogs at year-end, and our
healthy January 2014 sales, including mid-single-digit comp store
sales increases in our worldwide retail stores—in spite of the
weather impacting a large portion of the United States. We are
committed to maintaining this positive trend through product
development, growth in our emerging and established international
markets, deeper penetration in key domestic accounts, and the
planned opening of 60 to 70 new Company-owned stores this year.
With $372.0 million in cash as of year-end, in-line inventory and
strong double-digit backlogs, we believe the momentum we
experienced since the end of 2012 will continue through 2014, and
we are comfortable with the consensus numbers currently reported
for the first quarter and full year.”
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California,
designs, develops and markets a diverse range of lifestyle footwear
for men, women and children, as well as performance footwear for
men and women. SKECHERS footwear is available in the United States
via department and specialty stores, Company-owned SKECHERS retail
stores and its e-commerce website, and in over 100 countries and
territories through the Company’s international network of
subsidiaries in Canada, Brazil, Chile, Japan, and across Europe, as
well as through joint ventures in Asia and distributors around the
world. For more information, please visit www.skechers.com, and
follow us on Facebook (www.facebook.com/SKECHERS) and Twitter
(twitter.com/SKECHERSUSA).
This announcement contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, without limitation, the Company’s future
growth, financial results and operations, its development of new
products, future demand for its products and growth opportunities,
and its planned opening of new stores, advertising and marketing
initiatives. Forward-looking statements can be identified by the
use of forward looking language such as “believe,” “anticipate,”
“expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will
continue,” “will result,” “could,” “may,” “might,” or any
variations of such words with similar meanings. Any such statements
are subject to risks and uncertainties that could cause actual
results to differ materially from those projected in
forward-looking statements. Factors that might cause or contribute
to such differences include the resignation of the Company’s former
independent registered public accounting firm, and its withdrawal
of its audit reports with respect to certain of the Company’s
historical financial statements; international, national and local
general economic, political and market conditions including the
ongoing global economic slowdown and market instability; entry into
the highly competitive performance footwear market; sustaining,
managing and forecasting costs and proper inventory levels; losing
any significant customers, decreased demand by industry retailers
and cancellation of order commitments due to the lack of popularity
of particular designs and/or categories of products; maintaining
brand image and intense competition among sellers of footwear for
consumers; anticipating, identifying, interpreting or forecasting
changes in fashion trends, consumer demand for the products and the
various market factors described above; sales levels during the
spring, back-to-school and holiday selling seasons; and other
factors referenced or incorporated by reference in the Company’s
annual report, as amended, on Forms 10-K and Form 10-K/A for the
year ended December 31, 2012 and its quarterly report on Form 10-Q
for the three months and nine months ended September 30, 2013. The
risks included here are not exhaustive. The Company operates in a
very competitive and rapidly changing environment. New risks emerge
from time to time and the companies cannot predict all such risk
factors, nor can the companies assess the impact of all such risk
factors on their respective businesses or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, you should not
place undue reliance on forward-looking statements as a prediction
of actual results. Moreover, reported results should not be
considered an indication of future performance.
SKECHERS U.S.A., INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands)
December 31,
2013
December 31,
2012
ASSETS Current Assets: Cash and cash equivalents $ 372,011 $
325,826 Trade accounts receivable, net 225,941 213,697 Other
receivables 10,599
7,491 Total receivables 236,540
221,188 Inventories 358,168 339,012 Prepaid expenses and other
current assets 26,094 27,755 Deferred tax assets 22,115
26,531 Total current assets 1,014,928 940,312
Property, plant and equipment, at cost, less accumulated
depreciation and amortization
361,755
362,446
Goodwill and other intangible assets, less applicable amortization
2,377 3,242 Deferred tax assets 9,950 16,387 Other assets, at cost
19,560
17,833 Total non-current assets
393,642
399,908 TOTAL ASSETS
$
1,408,570
$ 1,340,220
LIABILITIES AND EQUITY Current Liabilities: Current
installments of long-term borrowings $ 12,028 $ 11,668 Short-term
borrowings 87 2,425 Accounts payable 258,183 241,525 Accrued
expenses 40,124
36,923 Total current liabilities
310,422 292,541 Long-term borrowings, excluding current
installments 116,488 128,517 Other long-term liabilities
1,740
73 Total non-current liabilities
118,228
128,590 Total liabilities 428,650 421,131
Stockholders’ equity: Skechers U.S.A., Inc. equity 930,322 875,969
Noncontrolling interests 49,598
43,120 Total
equity 979,920
919,089 TOTAL LIABILITIES AND
EQUITY
$ 1,408,570
$
1,340,220
SKECHERS U.S.A., INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except per share
data)
Three Months Ended December 31, Twelve Months
Ended December 31, 2013
2012
2013
2012 Net sales $ 450,737 $
395,617 $ 1,846,361 $ 1,560,321 Cost of sales
250,092 227,153
1,027,569
876,995 Gross profit 200,645 168,464 818,792 683,326
Royalty income 2,890
2,601 7,734
7,104 203,535
171,065 826,526
690,430 Operating
expenses: Selling 33,496 31,086 153,491 134,920 General and
administrative 151,699 132,142 577,214 532,373 Legal settlements
(recoveries) 1,278 (123 )
2,212
818 186,473
163,105 732,917
668,111 Income from operations 17,062
7,960 93,609 22,319 Other income (expense): Interest, net (2,696 )
(3,450 ) (11,049 ) (12,765 ) Gain (loss) on disposal of assets 602
(14 ) 447 (216 ) Other, net 1,509
2,138 (792 )
1,135 (585 )
(1,326 ) (11,394 )
(11,846 ) Earnings before income taxes
16,477 6,634 82,215 10,473 Income tax expense (benefit) 376
2,968
21,347 (39 ) Net
earnings 16,101 3,666 60,868 10,512 Less: Net earnings (loss)
attributable to noncontrolling interest 1,936
(290 ) 6,080
1,000 Net earnings
attributable to Skechers U.S.A., Inc. $ 14,165
$ 3,956 $ 54,788
$ 9,512 Net earnings per share
attributable to Skechers U.S.A., Inc.: Basic $ 0.28
$ 0.08 $ 1.09
$ 0.19 Diluted $ 0.28
$ 0.08 $ 1.08
$ 0.19 Weighted average shares
used in calculating earnings per share attributable to Skechers
U.S.A., Inc.: Basic 50,463
49,980 50,363
49,495 Diluted 50,653
50,271
50,563 49,942
Company Contact:SKECHERS USA, Inc.David WeinbergChief
Operating Officer,Chief Financial Officer(310)
318-3100orInvestor Relations:Addo CommunicationsAndrew
Greenebaum(310) 829-5400
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