UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
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July 23, 2014
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SKECHERS U.S.A., INC.
__________________________________________
(Exact name of registrant as specified in its charter)
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Delaware
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001-14429
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95-4376145
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_____________________
(State or other jurisdiction
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_____________
(Commission
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______________
(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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228 Manhattan Beach Boulevard, Manhattan Beach, California
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90266
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_________________________________
(Address of principal executive offices)
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___________
(Zip Code)
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Registrants telephone number, including area code:
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(310) 318-3100
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Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On July 23, 2014, the Company issued a press release announcing its results of operations and financial condition for the three months and six months ended June 30, 2014. A copy of the press release is attached hereto as exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is furnished as part of this report:
99.1 Press Release dated July 23, 2014.
The information in this current report and the exhibit attached hereto is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The Information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. The furnishing of the Information in this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the Information this Current Report contains is material investor information that is not otherwise publicly available.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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SKECHERS U.S.A., INC.
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July 23, 2014
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By:
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/s/ David Weinberg
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Name: David Weinberg
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Title: Chief Operating Officer
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Exhibit Index
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Exhibit No.
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Description
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99.1
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Press Release dated July 23, 2014.
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For Immediate Release
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Company Contact:
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David Weinberg
Chief Operating Officer,
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100 |
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Investor Relations:
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Andrew Greenebaum
(310) 829-5400 |
SKECHERS ANNOUNCES SECOND QUARTER 2014 FINANCIAL RESULTS
Record Net Sales of $587.1 Million, an Increase of 37.1 Percent
Earnings from Operations of $53.8 Million
Diluted Earnings per Share of $0.68
MANHATTAN BEACH, CA. July 23, 2014 SKECHERS USA, Inc. (NYSE:SKX), a global leader in footwear,
today announced financial results for the second quarter ended June 30, 2014.
Second quarter 2014 net sales were $587.1 million compared to $428.2 million for the second quarter
of 2013. Gross profit for the second quarter of 2014 was $269.4 million or 45.9 percent of net
sales compared to $194.9 million or 45.5 percent of net sales for the second quarter of last year.
Earnings from operations for the second quarter of 2014 were $53.8 million compared to net earnings
from operations of $17.2 million for the second quarter of 2013. Due to Easter falling later in
Spring, the Company shifted a portion of its advertising expenses to the second quarter of 2014;
even with the shift, advertising expenses on a percentage basis were flat versus the second quarter
of 2013.
The strength of our new product combined with the power of our marketing and diverse distribution
resulted in a 37.1 percent sales increase over last years second quarter and the highest quarterly
revenues in the Companys 22-year history. These results followed a record first quarter, resulting
in a 28.8 percent net sales increase for the first six months of 2014, began David Weinberg, chief
operating officer and chief financial officer. The strong sales are attributable to fresh styles
across our lifestyle, performance and kids categories, and the demand for our product resulted in
a positive shift of our Back-to-School domestic wholesale and international subsidiary shipments
originally scheduled for July into June. We achieved double-digit increases in our domestic
wholesale business, which included a four percent increase in average price per pair; double-digit
increases in our international wholesale business, with some markets up triple digits; and
double-digit growth in our Company-owned retail stores, which achieved a 13.9 percent comparable
quarter net sales increase. We are pleased with our financial achievements in our businesses
worldwide as is evidenced by our operating margin of 9.2 percent for the second quarter.
Net earnings in the second quarter of 2014 were $34.8 million compared to net earnings of $7.1
million for the second quarter of 2013. Diluted net earnings per share in the second quarter of
2014 were $0.68 based on 50,914,000 weighted average shares outstanding compared to diluted net
earnings per share of $0.14 based on 50,497,000 weighted average shares outstanding for the same
period last year.
For the six months ended June 30, 2014, net sales were $1.134 billion compared to net sales of
$879.9 million in the first six months of 2013. Gross profit for the first six months of 2014 was
$509.8 million or 45.0 percent of net sales, compared to $387.6 million or 44.1 percent of net
sales for the first six months of 2013. Earnings from operations for the first six months of 2014
were $101.9 million, compared to net earnings from operations of $32.5 million for the same period
last year.
Net earnings in the first six months of 2014 were $65.8 million compared to net earnings of $13.8
million in the same period last year. Diluted net earnings per share were $1.29 based on 50,879,000
weighted average common shares outstanding compared to diluted net earnings per share of $0.27
based on 50,494,000 weighted average common shares outstanding for the first six months of 2013.
Robert Greenberg, SKECHERS chief executive officer, commented: For the months of both April and
June, the Princeton Retail Analysis called Skechers the hottest major footwear brand, noting our
overall sales growth in several categories including casual and walking shoes. Many of our key
accounts visiting our corporate offices this month and our international distribution partners who
spent four days reviewing our collections last month are echoing the same sentiment due to our
multiple new product initiatives for men, women and kids. The innovations with our Spring 2014
product resulted in successes from every division, including triple digit growth in some
categories. As always, we supported our extensive product offering with targeted animated,
lifestyle and celebrity focused television campaigns, including a new commercial starring Joe
Montana, and the continuation of our Meb spot supporting the Olympians incredible win at the
Boston Marathon. We have expanded our team of Skechers ambassadors with the addition of sports
legends Pete Rose and Joe Namath for our Relaxed Fit from Skechers line, professional golfer Matt
Kuchar and Olympic runner Kara Goucher for our Skechers Performance Division, and we recently
signed superstar singer and actress Demi Lovato and one of Britains top models Kelly Brook for our
womens linesall of whom will appear in marketing campaigns this year and next. Looking for unique
marketing opportunities, we capitalized on the fame of California Chrome by sponsoring the horse
racing triple-crown hopeful, resulting in a windfall of press. We believe our marketing and
footwear is resonating with consumers globally. We ended 2013 with our second highest annual sales
ever, started the year with record first quarter sales, and have just achieved a new record sales
quarter with growth across all our distribution channels. In addition, in the second quarter we
received Best Lifestyle Brand of the Year from the Sports Trade Awards in the UK, and two product
awards from Competitor magazine. Given the broad product acceptance we achieved through the first
half of 2014, we believe the momentum will continue through the second half of 2014. We are looking
forward to delivering the remainder of our Back-to-School footwear, and continuing to introduce new
innovative product.
Mr. Weinberg continued: From a product, marketing and distribution stand point, the Company has
never been better positioned. The record first half of 2014 along with continued increased backlogs
at the end of June, incoming order rate and revenues in July leads us to believe that our record
quarterly sales trend will continue for the balance of the year. Further evidence is our position
in the market as reported by SportScanInfo: for the week of July 12, Skechers held the number two
position in Womens Sport footwear sold in the United States. We believe the demand for our product
is universal based on our sales growth across a number of continents. With $414.8 million in cash,
40 to 50 Company-owned Skechers stores planned to open later this year, in addition to the 16 that
opened in the second quarter and the two that have already opened this month, and another 60 to 65
Skechers stores planned to open through our distributors and franchise partners, as well as the
expansion and automation plans for our European Distribution Center, we believe we are in a great
position for continued growth. We remain comfortable with the analysts current consensus estimates
for the third quarter even though we are up against a tougher comparison and there was a pull
forward of domestic and international wholesale volume from the third quarter to the second quarter
of 2014.
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 Companys 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 Companys future growth, financial results and
operations, its development of new products, future demand for its products and growth
opportunities, its planned opening of new stores, advertising and marketing initiatives, and the
expansion and automation plans for the Companys European Distribution Center. 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 Companys former independent
registered public accounting firm, and its withdrawal of its audit reports with respect to certain
of the Companys 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 Companys annual report on Form 10-K
for the year ended December 31, 2013, and its Form 10-Q for the quarter ended March 31, 2014. 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.
###
1
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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June 30, |
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December 31, |
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2014 |
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2013 |
ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
414,808 |
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$ |
372,011 |
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Trade accounts receivable, net |
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318,460 |
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225,941 |
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Other receivables |
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10,667 |
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10,599 |
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Total receivables |
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329,127 |
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236,540 |
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Inventories |
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360,491 |
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358,168 |
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Prepaid expenses and other current assets |
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37,094 |
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26,094 |
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Deferred tax assets |
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22,115 |
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22,115 |
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Total current assets |
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1,163,635 |
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1,014,928 |
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Property, plant and equipment, at cost, less accumulated
depreciation and amortization |
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364,746 |
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361,755 |
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Goodwill and other intangible assets, less applicable amortization |
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1,910 |
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2,377 |
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Deferred tax assets |
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1,624 |
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9,950 |
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Other assets, at cost |
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19,420 |
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19,560 |
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Total non-current assets |
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387,700 |
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393,642 |
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TOTAL ASSETS |
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$ |
1,551,335 |
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$ |
1,408,570 |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Current installments of long-term borrowings |
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$ |
12,218 |
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$ |
12,028 |
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Short-term borrowings |
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184 |
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87 |
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Accounts payable |
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314,196 |
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258,183 |
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Accrued expenses |
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44,283 |
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40,124 |
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Total current liabilities |
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370,881 |
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310,422 |
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Long-term borrowings, excluding current installments |
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110,331 |
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116,488 |
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Other long-term liabilities |
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15,081 |
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1,740 |
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Total non-current liabilities |
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125,412 |
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118,228 |
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Total liabilities |
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496,293 |
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428,650 |
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Stockholders equity: |
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Skechers U.S.A., Inc. equity |
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1,001,817 |
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930,322 |
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Noncontrolling interests |
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53,225 |
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49,598 |
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Total equity |
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1,055,042 |
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979,920 |
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TOTAL LIABILITIES AND EQUITY |
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$ |
1,551,335 |
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$ |
1,408,570 |
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2
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2014 |
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2013 |
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2014 |
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2013 |
Net sales |
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$ |
587,051 |
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$ |
428,247 |
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$ |
1,133,569 |
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$ |
879,868 |
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Cost of sales |
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317,676 |
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233,353 |
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623,791 |
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492,242 |
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Gross profit |
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269,375 |
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194,894 |
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509,778 |
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387,626 |
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Royalty income |
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1,836 |
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|
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1,424 |
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4,858 |
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|
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3,194 |
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|
|
|
|
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|
|
|
|
|
|
|
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271,211 |
|
|
|
196,318 |
|
|
|
514,636 |
|
|
|
390,820 |
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Operating expenses: |
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Selling |
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53,839 |
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42,088 |
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|
|
90,581 |
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|
|
79,784 |
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General and administrative |
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163,616 |
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137,066 |
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322,139 |
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278,534 |
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|
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217,455 |
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|
|
179,154 |
|
|
|
412,720 |
|
|
|
358,318 |
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|
|
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Income from operations |
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53,756 |
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|
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17,164 |
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|
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101,916 |
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|
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32,502 |
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Other income (expense): |
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Interest, net |
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(3,459 |
) |
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(2,991 |
) |
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(6,052 |
) |
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(5,540 |
) |
Other, net |
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|
148 |
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(695 |
) |
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(934 |
) |
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(3,618 |
) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(3,311 |
) |
|
|
(3,686 |
) |
|
|
(6,986 |
) |
|
|
(9,158 |
) |
|
|
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|
|
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|
|
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|
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|
|
|
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|
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Earnings before income taxes |
|
|
50,445 |
|
|
|
13,478 |
|
|
|
94,930 |
|
|
|
23,344 |
|
Income tax expense |
|
|
12,232 |
|
|
|
4,632 |
|
|
|
23,669 |
|
|
|
6,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net earnings |
|
|
38,213 |
|
|
|
8,846 |
|
|
|
71,261 |
|
|
|
16,434 |
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Less: Net earnings attributable to noncontrolling interests |
|
|
3,411 |
|
|
|
1,752 |
|
|
|
5,494 |
|
|
|
2,660 |
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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Net earnings attributable to Skechers U.S.A., Inc. |
|
$ |
34,802 |
|
|
$ |
7,094 |
|
|
$ |
65,767 |
|
|
$ |
13,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic |
|
$ |
0.69 |
|
|
$ |
0.14 |
|
|
$ |
1.30 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.68 |
|
|
$ |
0.14 |
|
|
$ |
1.29 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in calculating earnings per
share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
50,565 |
|
|
|
50,298 |
|
|
|
50,562 |
|
|
|
50,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
50,914 |
|
|
|
50,497 |
|
|
|
50,879 |
|
|
|
50,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
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