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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April 22, 2015
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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 April 22, 2015, the Company issued a press release announcing its results of operations and financial condition for the three months ended March 31, 2015. 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 April 22, 2015.
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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April 22, 2015
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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 April 22, 2015.
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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 FIRST QUARTER 2015 FINANCIAL RESULTS
Record Quarterly Net Sales of $768.0 Million, an Increase of 40.5 Percent
Earnings from Operations of $88.2 Million
Diluted Earnings Per Share of $1.10
MANHATTAN BEACH, CA. April 22, 2015 SKECHERS USA, Inc. (NYSE:SKX), a global leader in footwear,
today announced financial results for the first quarter ended March 31, 2015.
First quarter 2015 net sales were $768.0 million compared to $546.5 million in the first quarter of
2014, an increase of 40.5 percent. Gross profit for the first quarter of 2015 was $332.5 million,
or 43.3 percent of net sales, compared to $240.4 million, or 44.0 percent of net sales in the first
quarter of 2014. Earnings from operations for the first quarter of 2015 were $88.2 million, or
11.5 percent of net sales, compared to net earnings from operations of $48.2 million, or 8.8
percent of net sales, for the first quarter of 2014.
Skechers first quarter net sales of $768.0 million mark the highest quarterly revenues in the
Companys history. The net sales growth of 40.5 percent, which was against a previous record first
quarter net sales in 2014, is attributable to the continued strong demand for our lifestyle,
performance and kids footwear from both our customers and consumers around the world, began David
Weinberg, chief operating officer and chief financial officer. The sales results are attributable
to double-digit increases in our domestic and international wholesale businesses, and our worldwide
Company-owned retail business, as well as single-digit increases in our ecommerce business.
Additionally, for the quarter, our total Company-owned retail store comps were up over nine percent
and our domestic wholesale business saw an average price per pair increase of $1.27 or 5.9
percent.
Weinberg continued: We achieved this growth despite significant headwinds, which included the
strengthening U.S. dollar, unseasonably cold weather in many markets, and the slowdown at the West
Coast ports. Further, our European Distribution Center was operating less efficiently than we had
originally anticipated due to the transition to a new automation system combined with stronger than
expected sales in the region. Additionally, to manage the increased demand and shipments, we are
expanding our European Distribution Center by over 500,000 square feet, increasing it to more than
one million square feet by the first quarter 2016.
Net earnings in the first quarter of 2015 were $56.1 million compared to net earnings of $31.0
million for the first quarter of 2014. Net earnings per diluted share in the first quarter 2015
were $1.10 based on 51.1 million weighted average shares outstanding compared to a diluted net
earnings per share of $0.61 based on 50.8 million weighted average shares outstanding for the same
period in the prior year.
Robert Greenberg, SKECHERS chief executive officer, commented: Having just achieved a new annual
sales record of $2.4 billion in 2014, we expected the momentum to continue into 2015. We attribute
this success to our constant development of fresh and innovative products that are appealing to a
widening audience around the world, the continued marketing support we provide for every key
product category, the diverse global distribution strategy, and, finally, our tremendous logistical
support and inventory management. Our expanding product line and marketing focus is broadening our
demographic reach, including Demi Lovato to tweens and teens as she supports our Skechers Sport
line, to avid golfers as Matt Kuchar plays in Skechers GO Golf, and to tech savvy kids with Game
Kicks, the shoe with a memory game built in. Along with marketing campaigns for these collections,
we ran a Relaxed Fit Footwear commercial starring Pete Rose during the Super Bowl, and introduced
many new commercials in support of our Spring collection, including Stretch Fit with Brooke
Burke-Charvet and Skechers Memory Foam with British actress and model Kelly Brook, who is now
appearing on the NBC comedy One Big Happy. Already this month, we debuted our new Ringo Starr
Relaxed Fit Footwear campaign and Meb, winner of the 2014 Boston Marathon, appeared in Skechers
GOmeb Speed 3 on the cover of Runners World. We are also airing many of our product and lifestyle
focused campaigns around the world, creating global synergy between product and marketing. Now,
more than ever, we are seeing many of the same products resonating across six continents, and
quickly leveraging the success we are experiencing in the United States to global markets. This
resulted in international sales growth of 59 percent in the first quarter, which comprised 37
percent of our total sales for the quarter, bringing us closer to our goal of international sales
representing 50 percent of our business. Our Skechers stores, at 1,063 at quarter-endincluding 610
international locations owned by distributors or franchisees, continue to be an important part of
our brand building and growth strategy, and we expect to grow the total Skechers store base to
approximately 1,250 by year-end 2015. With the demand for our key product initiatives in the United
States, Asia, Europe, the Middle East and South America remaining very high, we believe the growth
that we experienced in the first quarter will continue in 2015.
Mr. Weinberg added: Our record 2015 first quarter and a strong start to April in terms of revenues
and backlogs, including double-digit domestic and international retail comps, leads us to believe
that our accelerated growth trend will continue through the second quarter and into the back half
of 2015. We believe we are well positioned to maintain this growth with the combination of $396.7
million in cash, in-line inventory levels, and the expectation of an additional 155 to 175 SKECHERS
distributor-, joint venture-, franchisee- and Company-owned stores opening later this year in
addition to the 39 opened in the first quarter. We are looking forward to what we believe will be
record sales for a second quarter, delivering our back-to-school product, and a new annual sales
record. We are comfortable with analysts estimates for the second quarter, and we see upside
opportunity in the third quarter.
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 and over 120 countries and
territories worldwide via department and specialty stores, more than 1,050 SKECHERS retail stores,
and the Companys e-commerce website. The Company manages its international business through a
network of global distributors, joint venture partners in Asia, and 12 wholly-owned subsidiaries in
Brazil, Canada, Chile, Japan and throughout Europe. For more information, please visit
skechers.com and follow us on Facebook (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 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
international economic, political and market conditions including the uncertainty of sustained
recovery in Europe; 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, 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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March 31, |
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December 31, |
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2015 |
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2014 |
ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
396,710 |
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$ |
466,685 |
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Trade accounts receivable, net |
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442,688 |
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272,103 |
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Other receivables |
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13,440 |
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16,510 |
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Total receivables |
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456,128 |
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288,613 |
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Inventories |
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392,192 |
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453,837 |
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Prepaid expenses and other current assets |
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51,401 |
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57,015 |
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Deferred tax assets |
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18,864 |
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18,864 |
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Total current assets |
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1,315,295 |
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1,285,014 |
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Property, plant and equipment, net |
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375,586 |
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373,183 |
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Other assets |
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22,702 |
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16,721 |
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Total non-current assets |
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398,288 |
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389,904 |
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TOTAL ASSETS |
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$ |
1,713,583 |
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$ |
1,674,918 |
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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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$ |
99,762 |
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$ |
101,407 |
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Accounts payable |
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321,034 |
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352,815 |
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Short-term borrowings |
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87 |
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1,810 |
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Accrued expenses |
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61,467 |
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49,705 |
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Total current liabilities |
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482,350 |
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505,737 |
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Long-term borrowings, excluding current installments |
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13,660 |
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15,081 |
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Other long-term liabilities |
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21,040 |
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19,993 |
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Total non-current liabilities |
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34,700 |
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35,074 |
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Total liabilities |
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517,050 |
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540,811 |
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Stockholders Equity: |
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Skechers U.S.A., Inc. equity |
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1,133,480 |
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1,075,249 |
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Noncontrolling interests |
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63,053 |
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58,858 |
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Total equity |
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1,196,533 |
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1,134,107 |
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TOTAL LIABILITIES AND EQUITY |
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$ |
1,713,583 |
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$ |
1,674,918 |
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2
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
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Three Months Ended March 31, |
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2015 |
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2014 |
Net sales |
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$ |
767,997 |
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$ |
546,518 |
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Cost of sales |
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435,457 |
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306,115 |
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Gross profit |
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332,540 |
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240,403 |
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Royalty income |
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1,882 |
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3,022 |
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334,422 |
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243,425 |
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Operating expenses: |
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Selling |
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49,092 |
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36,742 |
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General and administrative |
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197,141 |
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158,523 |
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246,233 |
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195,265 |
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Earnings from operations |
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88,189 |
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48,160 |
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Other income (expense): |
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Interest, net |
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(2,650 |
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(2,593 |
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Other, net |
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(4,761 |
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(1,082 |
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(7,411 |
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(3,675 |
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Earnings before income tax expense |
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80,778 |
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44,485 |
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Income tax expense |
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19,120 |
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11,437 |
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Net earnings |
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61,658 |
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33,048 |
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Less: Net earnings attributable to noncontrolling interests |
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5,578 |
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2,083 |
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Net earnings attributable to Skechers U.S.A., Inc. |
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$ |
56,080 |
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$ |
30,965 |
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Net earnings per share attributable to Skechers U.S.A., Inc.: |
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Basic |
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$ |
1.10 |
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$ |
0.61 |
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Diluted |
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$ |
1.10 |
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$ |
0.61 |
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Weighted average shares used in calculating earnings per
share attributable to Skechers U.S.A., Inc.: |
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Basic |
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50,804 |
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50,558 |
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Diluted |
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51,143 |
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50,844 |
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3
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