- Record Annual Sales of $3.147
Billion
- Record Fourth Quarter 2015 Net Sales
of $722.7 Million, an Increase of 26.8 Percent
- Fourth Quarter 2015 Earnings from
Operations of $54.7 Million, an Increase of 65.7 Percent
- Fourth Quarter 2015 Net Earnings of
$29.4 Million
- Fourth Quarter 2015 Diluted Earnings
Per Share of $0.19
SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader and the
second largest athletic footwear brand in the United States, today
announced financial results for the fourth quarter and year ended
December 31, 2015. All share and per share information has been
retroactively adjusted for the three-for-one stock split that was
effective on October 15, 2015.
Net sales for the fourth quarter of 2015 were $722.7 million
compared to $569.7 million in the fourth quarter of 2014. Gross
profit for the fourth quarter of 2015 was $329.9 million or 45.6
percent of net sales compared to $257.6 million or 45.2 percent of
net sales in the fourth quarter of 2014.
“Skechers achieved record fourth quarter sales of more than $722
million in 2015. This resulted in earnings from operations of $54.7
million in the fourth quarter, which is an increase of 65.7 percent
from the same prior year period, and record annual revenues of
$3.147 billion for 2015, an increase of 32.4 percent compared to
2014,” began David Weinberg, SKECHERS chief operating officer and
chief financial officer. “The fourth quarter growth was across our
key product lines for men, women and kids, which led to high
single-digit gains in our domestic wholesale business, and
double-digit increases in our international wholesale and
Company-owned retail stores businesses. Also in the fourth quarter,
our international business grew to 41 percent of our total sales,
bringing it closer to our goal of 50 percent within the next two to
three years.”
Net earnings for the fourth quarter of 2015 were $29.4 million
compared to net earnings of $21.9 million in the fourth quarter of
2014. Net earnings per diluted share in the fourth quarter of 2015
were $0.19 based on 154.6 million weighted average shares
outstanding compared to $0.14 based on 154.1 million weighted
average shares outstanding in the fourth quarter of 2014. Our
annual effective tax rate for 2015 increased slightly to 21.7
percent from 21.3 percent as of September 30, 2015, which increased
our fourth quarter 2015 effective tax rate to 23.9 percent and
reduced our earnings per share by $0.01. In addition, the
Company’s gross margins were negatively impacted by approximately
$8.1 million due to negative foreign currency translations and an
additional $2.0 million in other expenses related to foreign
currency transaction losses during the fourth quarter of 2015.
Fiscal year 2015 net sales were a record $3.147 billion compared
to net sales of $2.378 billion in 2014. Gross profit for 2015 was
$1.424 billion or 45.2 percent of net sales compared to $1.072
billion or 45.1 percent of net sales in 2014. Earnings from
operations for 2015 were $350.8 million compared to $209.1 million
in 2014.
Net earnings for 2015 were $231.9 million compared to $138.8
million in 2014. Net earnings per diluted share for fiscal year
2015 were $1.50 based on 154.2 million weighted average shares
outstanding compared to $0.91 based on 153.1 million weighted
average shares outstanding in the prior year.
Robert Greenberg, SKECHERS chief executive officer, commented:
“Surpassing $3 billion in annual sales is a remarkable
accomplishment and to achieve this growth across both our domestic
and international businesses speaks to the global strength of the
Skechers brand. In the United States, we are the number two
footwear brand and the number one walking and work brand, and we
were named the 2015 Company of the Year and received the Athleisure
Design Excellence award by Footwear Plus magazine. Our accelerated
international growth is an indicator of the global acceptance of
our product and marketing, which now includes icons Ringo Starr and
Sugar Ray Leonard as well as pop superstars Demi Lovato and Meghan
Trainor. While we continue to take increased shelf space within our
existing accounts worldwide, the Skechers retail store count has
also grown to more than 1,300 Company-owned and third-party owned
locations at year-end. Pivotal to this growth has been continued
product innovation and expansion into more categories enabling us
to appeal to an even broader demographic. As the title sponsor of
the Skechers Performance Los Angeles Marathon and the official
running sponsor of the European Ironman, we are reaching elite
athletes and running enthusiasts like never before. With Demi
Lovato’s social media posts about Skechers, we are also resonating
with hundreds of thousands of savvy teenagers around the world. Our
cast of characters remains a focus for our kids advertising, while
also capturing the tweens with takedowns of our popular adult sport
styles. As we continue to focus on comfort, style and quality in
every shoe design, we are expanding our business within both
existing doors and into new accounts and countries as well. With an
additional 330 to 340 Skechers retail stores opening worldwide this
year, we estimate there will be more than 1,650 Skechers stores by
the end of 2016, of which approximately 575 stores will be
Company-owned. Looking at 2016, we plan to continue to grow
worldwide and believe we will see strong double-digit and, in some
cases, triple-digit gains in countries around the world.”
Mr. Weinberg added: “The record net sales growth we achieved for
2015—both the gains of 22 percent in our domestic wholesale channel
and 59 percent in our international distributor and subsidiary
business channel over 2014—is very significant given the sluggish
domestic retail environment in the back half of 2015, as well as
declining currencies in several key countries. The improvements in
our wholesale and Skechers retail businesses were due to the
continued strong demand for our fresh product and our impactful
marketing.”
Mr. Weinberg continued: “As we look at the coming year, we
believe our Company-owned retail stores are on target with mid- to
high-single digit retail comps in January and we are continuing to
gain market share. We have had a very strong start to the first
quarter with January sales up approximately 35 percent compared to
January 2015 as well as a strong first week of February. Our
backlogs are up 9.5 percent at December 31, 2015, which were
impacted by some distributors pulling forward orders from January
to December. During the fourth quarter, our distributor sales
increased 91.6 percent as compared to the same period last year.
Additionally, our incoming order rate in January was also very
strong with both our domestic wholesale and European subsidiary
businesses ordering closer to season, which is resulting in
increasingly improved backlogs for the first quarter. It is
important to note that our backlog does not include Company-owned
Skechers retail stores—of which we have 68 more stores than in the
prior year, as well as our joint ventures in Asia, including China,
which we expect will have very strong double-digit growth in 2016.
Our inventories are up approximately 36.7 percent from the prior
year end with fourth quarter 2015 net sales that increased 27
percent, and our financial position is strong with $508.0 million
in cash and cash equivalents. To further position the Company for
continued growth, we have improved efficiencies in our distribution
centers, which allowed for us to ship more than 2.3 million pairs
from our European distribution center in January 2016, an
improvement of more than 100 percent from the same period last
year. With the anticipated completion of the final expansion phase
of our European distribution center in May, we will have more than
a million square feet of space. With the strong start to the first
quarter and the broad acceptance of our brand worldwide, we see
significant potential to continue to grow our international
business in 2016 by investing in our product, marketing and
infrastructure. We remain comfortable with the majority of the
analysts’ current consensus range of $885 million to $920 million
in net sales and $0.50 to $0.55 in earnings per share for the first
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 1,340 SKECHERS Company-owned and
third-party retail stores, and the Company’s e-commerce website.
The Company manages its international business through a network of
global distributors, joint venture partners in Asia, and 13
wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin
America 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 Company’s future
domestic and international growth, financial results and operations
including expected net sales and earnings, its development of new
products, future demand for its products, its planned domestic and
international expansion and opening of new stores, the completion
of the Company’s European distribution center, and 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 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 Company’s annual report on Form
10-K for the year ended December 31, 2014 and its quarterly report
on Form 10-Q for the quarter ended September 30, 2015. 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, December
31, 2015 2014 ASSETS Current
Assets: Cash and cash equivalents $ 507,991 $ 466,685 Trade
accounts receivable, net 343,930 272,103 Other receivables
18,661 16,510 Total receivables 362,591 288,613
Inventories 620,247 453,837 Prepaid expenses and other current
assets 57,363 57,015 Deferred tax assets 22,275
18,864 Total current assets 1,570,467 1,285,014 Property,
plant and equipment, net 435,907 373,183 Other assets 41,034
16,721 Total non-current assets 476,941
389,904 TOTAL ASSETS
$ 2,047,408
$ 1,674,918 LIABILITIES
AND EQUITY Current Liabilities: Current installments of
long-term borrowings $ 15,653 $ 101,407 Accounts payable 473,983
352,815 Short-term borrowings 59 1,810 Accrued expenses
87,318 49,705 Total current liabilities 577,013
505,737 Long-term borrowings, net of current installments 68,942
15,081 Other long-term liabilities 25,719
19,993 Total non-current liabilities 94,661
35,074 Total liabilities 671,674 540,811 Stockholders’ equity:
Skechers U.S.A., Inc. equity 1,327,556 1,075,249 Noncontrolling
interests 48,178 58,858 Total equity
1,375,734 1,134,107 TOTAL LIABILITIES AND EQUITY
$ 2,047,408 $
1,674,918 SKECHERS U.S.A., INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (Unaudited) (In thousands, except per share
data) Three Months Ended December 31,
Twelve Months Ended December 31,
2015
2014
2015
2014
Net sales $ 722,683 $ 569,722 $ 3,147,323 $ 2,377,561 Cost of sales
392,829 312,093
1,723,315 1,305,656 Gross profit
329,854 257,629 1,424,008 1,071,905 Royalty income 3,921
2,179 11,745
9,107 333,775
259,808 1,435,753
1,081,012 Operating expenses: Selling 57,934 40,198 235,586
181,018 General and administrative 221,133
186,598 849,343
690,923 279,067 226,796
1,084,929 871,941
Earnings from operations 54,708 33,012 350,824 209,071 Other income
(expense): Interest, net (1,969 ) (3,093 ) (10,006 ) (11,629 )
Other, net (2,141 ) (1,230 )
(7,321 ) (6,062 ) (4,110 )
(4,323 ) (17,327 ) (17,691 ) Earnings
before income tax expense 50,598 28,689 333,497 191,380 Income tax
expense 12,108 2,833
72,450 39,184 Net earnings
38,490 25,856 261,047 152,196 Less: Net earnings attributable to
noncontrolling interests 9,042 3,935
29,135 13,385 Net
earnings attributable to Skechers U.S.A., Inc. $ 29,448
$ 21,921 $ 231,912 $ 138,811
Net earnings per share attributable to
Skechers U.S.A., Inc.: Basic $ 0.19 $ 0.14
$ 1.52 $ 0.91 Diluted $ 0.19
$ 0.14 $ 1.50 $ 0.91
Weighted average shares used in calculating earnings per
share attributable to Skechers U.S.A., Inc.: Basic 153,346
152,092 152,847
151,839 Diluted 154,570
154,066 154,200
153,079
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version on businesswire.com: http://www.businesswire.com/news/home/20160210006356/en/
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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