SKX
$34.22
Skechers U.S.A.
($.33)
(.96%)
Earnings Details
2nd Quarter June 2020
Thursday, July 23, 2020 4:05:00 PM
Tweet Share Watch
Summary

Skechers U.S.A. Beats

Skechers U.S.A. (SKX) reported a 2nd Quarter June 2020 loss of $0.44 per share on revenue of $729.5 million. The consensus estimate was a loss of $0.67 per share on revenue of $816.2 million. The Earnings Whisper number was for a loss of $0.58 per share. Revenue fell 42.0% compared to the same quarter a year ago.

Skechers USA Inc designs and markets Skechers-branded lifestyle footwear for men, women and children, and performance footwear for men and women under the Skechers GO brand name.

Results
Reported Earnings
($0.44)
Earnings Whisper
($0.58)
Consensus Estimate
($0.67)
Reported Revenue
$729.5 Mil
Revenue Estimate
$816.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Skechers Announces Second Quarter 2020 Financial Results

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)--SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader, today announced financial results for the second quarter ended June 30, 2020.

Second Quarter Results

  • Sales of $729.5 million, a 42.0 percent decrease
  • Company-owned e-commerce sales grew 428.2 percent
  • China sales grew 11.5 percent
  • Diluted loss per share was $0.44
  • Cash, cash equivalents and investments were $1.56 billion

“Skechers, like most businesses around the world, has never faced a more challenging time than during the pandemic, which caused the closing of nearly every market worldwide,” stated Robert Greenberg, chief executive officer of Skechers. “COVID-19 continues to be a serious concern globally, and the health and welfare of our team, partners and customers remain our number one priority. In the face of this on-going challenge, I am extremely proud of our company. We are a resilient organization driven by a dedicated and flexible team determined to do what it takes to not only survive but position ourselves for a return to profitability. Now, with more than 90 percent of our Skechers stores safely re-opened and some markets in the early stages of recovery, we believe that we will remain a brand consumers and retailers trust to deliver comfort, quality, and style. We are hopeful that global economies will continue to improve, and as they do, we will continue to operate efficiently and judiciously during this pandemic.”

“The impact of COVID-19 to Skechers’ business was significant in the second quarter as we saw much of the world outside Asia shutter nearly all businesses,” began David Weinberg, chief operating officer of Skechers. “However, we remain optimistic about the early signs of recovery we witnessed during the quarter, including a return to growth in China, consistent improvement each month in some markets outside of China, and record shattering growth of over 400 percent in our Company-owned e-commerce business. While every country’s recovery has been unique, we began to see a similar recovery trend, first reflected in China and now extending into other markets globally including Australia, Germany, South Korea and Taiwan. We believe the positive sales trends in markets that have re-opened, as well as the efficiency with which we addressed the pandemic challenges, are strong indicators that when the global health crisis stabilizes, Skechers will remain a global footwear leader.”

Second Quarter 2020 Financial Results

(Dollars in millions, except per share data)

 

 

Three months ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

 

 

2020

 

 

2019

 

 

$

 

 

%

 

Sales

 

$

729.5

 

 

$

1,258.6

 

 

$

(529.1

)

 

 

-42.0

%

Gross Profit

 

 

368.6

 

 

 

609.8

 

 

 

(241.2

)

 

 

-39.6

%

Gross Margin

 

 

50.5

 

%

 

48.5

 

%

 

 

 

 

 

 

 

SG&A Expenses

 

 

432.1

 

 

 

505.1

 

 

 

(73.0

)

 

 

-14.5

%

As a % of Sales

 

 

59.2

 

%

 

40.1

 

%

 

 

 

 

 

 

 

Earnings / (loss) from Operations

 

 

(61.0

)

 

 

111.1

 

 

 

(172.1

)

 

 

-154.9

%

Operating Margin

 

 

(8.4

)

%

 

8.8

 

%

 

 

 

 

 

 

 

Net Earnings / (loss)

 

 

(68.1

)

 

 

75.2

 

 

 

(143.3

)

 

 

-190.6

%

Diluted Earnings / (loss) per Share

 

$

(0.44

)

 

$

0.49

 

 

$

(0.93

)

 

 

-189.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales decreased 42.0 percent as a result of a 37.8 percent decrease in its international business and a 47.3 percent decrease in the Company’s domestic business, reflecting the impact of the global pandemic. The Company’s international sales declines were partially offset by an 11.5 percent increase in China sales. The Company’s international wholesale business decreased 29.9 percent and its domestic wholesale business decreased 57.2 percent. With nearly all its Skechers stores closed at some point in the quarter, its direct-to-consumer business decreased 47.1 percent, which includes a 428.2 percent increase in its e-commerce business. Comparable same store sales in its direct-to-consumer business decreased 45.6 percent, including a decrease of 35.9 percent in the United States and 66.9 percent internationally.

Gross margins increased by approximately 210 basis points as a result of a favorable mix of online and international sales.

SG&A expenses decreased $73.0 million, or 14.5 percent in the quarter. Selling expenses decreased by $53.3 million, or 46.9 percent, primarily due to lower advertising and marketing expenses globally. General and administrative expenses decreased by $19.7 million, or 5.0 percent, despite the inclusion of an incremental $10.2 million in bad debt expense, due predominately to the impact of COVID-19 on wholesale customers across the globe. The decrease was primarily the result of a reduction in compensation related expenses due to the temporary closure of its retail stores and the furlough of select corporate staff.

Earnings (loss) from operations decreased $172.1 million, or 154.9 percent, to a loss of $61.0 million.

Net loss was $68.1 million and diluted loss per share was $0.44.

In the second quarter, the Company’s effective income tax rate was 7.2 percent, resulting in a net tax benefit of $4.3 million.

“Despite the challenges of the second quarter, we are optimistic about the early-stage recovery we are seeing in much of our business, including a return to growth in China and the explosive growth of our e-commerce channel,” said John Vandemore, chief financial officer of Skechers. “We ended the second quarter in a position of significant financial strength, having grown our cash balances sequentially by more than $175 million through prudent inventory, working capital and operating expense management. We remain confident in our ability to manage through this crisis and are extremely optimistic about the long-term future of the Skechers brand.”

Six Months 2020 Financial Results

(Dollars in millions, except per share data)

 

 

Six Months ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

 

 

2020

 

 

2019

 

 

$

 

 

%

 

Sales

 

$

1,971.8

 

 

$

2,535.3

 

 

$

(563.5

)

 

 

-22.2

%

Gross Profit

 

 

916.2

 

 

 

1,200.3

 

 

 

(284.1

)

 

 

-23.7

%

Gross Margin

 

 

46.5

 

%

 

47.3

 

%

 

 

 

 

 

 

 

SG&A Expenses

 

 

940.2

 

 

 

934.9

 

 

 

5.3

 

 

 

0.6

%

As a % of Sales

 

 

47.7

 

%

 

36.9

 

%

 

 

 

 

 

 

 

Earnings / (loss) from Operations

 

 

(16.2

)

 

 

276.9

 

 

 

(293.1

)

 

 

-105.9

%

Operating Margin

 

 

(0.8

)

%

 

10.9

 

%

 

 

 

 

 

 

 

Net Earnings / (loss)

 

 

(19.0

)

 

 

183.9

 

 

 

(202.9

)

 

 

-110.3

%

Diluted Earnings / (loss) per Share

 

$

(0.12

)

 

$

1.19

 

 

$

(1.31

)

 

 

-110.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the first six months, sales decreased 22.2 percent, reflecting the impact of the global pandemic on our businesses worldwide.

Gross margins decreased slightly due to lower international gross margins, including the impact of a one-time, non-cash purchase price adjustment related to the acquisition of the Company’s interest in the Mexico joint venture in 2019 of $8.0 million.

For the first six months, SG&A expenses increased by 0.6 percent or $5.3 million. Selling expenses decreased by 26.9 percent or $49.4 million, primarily due to lower advertising and marketing expenses globally. General and administrative expenses increased by 7.3 percent or $54.7 million, reflecting the inclusion of Mexico operations and a net increase in new Company-owned Skechers stores.

Earnings (loss) from operations decreased $293.1 million, or 105.9 percent, to a loss of $16.2 million.

Net loss was $19.0 million and diluted loss per share was $0.12.

Balance Sheet

At quarter-end, cash, cash equivalents and investments totaled $1.56 billion, an increase of $524.5 million, or 50.9 percent from December 31, 2019, and an increase of $583.0 million, or 59.9 percent, over June 30, 2019. The increase primarily reflects the drawdown of $490 million from the Company’s senior unsecured credit facility in the first quarter.

Total inventory, including inventory in transit, was $1.03 billion, a decrease of $42.1 million or 3.9 percent from December 31, 2019, and an increase of $172.1 million or 20.1 percent over June 30, 2019. The higher year-over-year inventory levels reflect lower wholesale shipping and decreased retail activity associated with the global pandemic.

Outlook

The Company is not providing further financial guidance at this time given the ongoing business disruption and substantial uncertainty surrounding the impact of the pandemic on its business globally.

Store Count

 

 

Number of Store Locations as of

 

 

 

 

 

 

 

 

 

Number of Store Locations as of

 

 

 

March 31, 2020

 

 

Opened

 

 

Closed(1)

 

June 30, 2020

 

Company-owned domestic stores

 

 

508

 

 

 

3

 

 

 

(1

)

 

 

510

 

Company-owned international stores

 

 

304

 

 

 

4

 

 

 

-

 

 

 

308

 

Joint-venture stores

 

 

377

 

 

 

21

 

 

 

(8

)

 

 

390

 

Distributor, licensee and franchise stores

 

 

2,386

 

 

 

81

 

 

 

(60

)

 

 

2,407

 

Total Skechers stores

 

 

3,575

 

 

 

109

 

 

 

(69

)

 

 

3,615

 

(1) Does not reflect temporary closures due to the COVID-19 pandemic.

Second Quarter 2020 Conference Call

The Company will host a conference call today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to discuss its second quarter 2020 financial results. The call can be accessed on the Investor Relations section of the Company’s website at investors.skechers.com. For those unable to participate during the live broadcast, a replay will be available beginning July 23, 2020 at 7:30 p.m. ET, through August 6, 2020, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13706218.

About SKECHERS USA, Inc.

Based in Manhattan Beach, California, Skechers designs, develops and markets a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. The Company’s collections are available in the United States and over 170 countries and territories via department and specialty stores, and direct to consumers through 3,615 Company- and third-party-owned retail stores and e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia, Israel and Mexico, and wholly-owned subsidiaries in Canada, Japan, India, Europe and Latin America. For more information, please visit about.skechers.com and follow us on Facebook, Instagram, Twitter, and TikTok.

Reference in this press release to “Sales” refers to Skechers’ net sales reported under generally accepted accounting principles in the United States. This announcement also contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, Skechers’ 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, opening of new stores and additional expenditures, 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 the disruption of business and operations due to the COVID-19 pandemic; international economic, political and market conditions including the challenging consumer retail markets in the United States; 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, especially in the highly competitive performance footwear market; 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 Skechers’ annual report on Form 10-K for the year ended December 31, 2019, and its quarterly report on Form 10-Q for the three-months ended March 31, 2020. More specifically, the COVID-19 pandemic has had and is currently having a significant impact on Skechers’ business, financial conditions, cash flow and results of operations. Forward-looking statements with respect to the COVID-19 pandemic include, without limitation, Skechers’ plans in response to this pandemic. At this time, there is significant uncertainty about the COVID-19 pandemic, including without limitation, (i) the duration and extent of the impact of the pandemic, (ii) governmental responses to the pandemic, including how such responses could impact Skechers’ business and operations, as well as the operations of its contract manufacturers and other business partners, (iii) the effectiveness of Skechers’ actions taken in response to these risks, and (iv) Skechers’ ability to effectively and timely adjust its plans in response to the rapidly changing retail and economic environment. Taking these and other risk factors associated with COVID-19 into consideration, the dynamic nature of these circumstances means that what is stated in this press release could change at any time, and as a result, actual results could differ materially from those contemplated by such forward-looking statements. The risks included here are not exhaustive. Skechers operates in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business 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, dollars in thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,352,120

 

 

$

824,876

 

Short-term investments

 

 

105,677

 

 

 

112,037

 

Trade accounts receivable, net

 

 

478,011

 

 

 

645,303

 

Other receivables

 

 

68,104

 

 

 

53,932

 

Total receivables

 

 

546,115

 

 

 

699,235

 

Inventories

 

 

1,027,735

 

 

 

1,069,863

 

Prepaid expenses and other current assets

 

 

105,141

 

 

 

113,580

 

Total current assets

 

 

3,136,788

 

 

 

2,819,591

 

Property, plant and equipment, net

 

 

833,103

 

 

 

738,925

 

Operating lease right-of-use assets

 

 

1,102,885

 

 

 

1,073,660

 

Deferred tax assets

 

 

49,198

 

 

 

49,088

 

Long-term investments

 

 

98,236

 

 

 

94,589

 

Goodwill

 

 

93,497

 

 

 

71,412

 

Other assets, net

 

 

94,339

 

 

 

45,678

 

Total non-current assets

 

 

2,271,258

 

 

 

2,073,352

 

TOTAL ASSETS

 

$

5,408,046

 

 

$

4,892,943

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current installments of long-term borrowings

 

$

69,359

 

 

$

66,234

 

Short-term borrowings

 

 

13,870

 

 

 

5,789

 

Accounts payable

 

 

621,142

 

 

 

764,844

 

Operating lease liabilities

 

 

194,508

 

 

 

191,129

 

Accrued expenses

 

 

177,907

 

 

 

210,235

 

Total current liabilities

 

 

1,076,786

 

 

 

1,238,231

 

Long-term borrowings, excluding current installments

 

 

680,109

 

 

 

49,183

 

Long-term operating lease liabilities

 

 

1,099,798

 

 

 

966,011

 

Deferred tax liabilities

 

 

12,435

 

 

 

322

 

Other long-term liabilities

 

 

101,774

 

 

 

103,089

 

Total non-current liabilities

 

 

1,894,116

 

 

 

1,118,605

 

Total liabilities

 

 

2,970,902

 

 

 

2,356,836

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Skechers U.S.A., Inc. equity

 

 

2,224,715

 

 

 

2,314,665

 

Non-controlling interests

 

 

212,429

 

 

 

221,442

 

Total stockholders' equity

 

 

2,437,144

 

 

 

2,536,107

 

TOTAL LIABILITIES AND EQUITY

 

$

5,408,046

 

 

$

4,892,943

 

SKECHERS U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited, dollars in thousands except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2020

 

2019

 

 

2020

 

2019

Sales

 

$

729,472

 

 

$

1,258,565

 

 

$

1,971,817

 

 

$

2,535,321

 

Cost of sales

 

 

360,906

 

 

 

648,730

 

 

 

1,055,583

 

 

 

1,334,977

 

Gross profit

 

 

368,566

 

 

 

609,835

 

 

 

916,234

 

 

 

1,200,344

 

Royalty income

 

 

2,596

 

 

 

6,341

 

 

 

7,844

 

 

 

11,542

 

 

 

 

371,162

 

 

 

616,176

 

 

 

924,078

 

 

 

1,211,886

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling

 

 

60,240

 

 

 

113,507

 

 

 

134,295

 

 

 

183,721

 

General and administrative

 

 

371,893

 

 

 

391,588

 

 

 

805,944

 

 

 

751,220

 

 

 

 

432,133

 

 

 

505,095

 

 

 

940,239

 

 

 

934,941

 

Earnings / (loss) from operations

 

 

(60,971

)

 

 

111,081

 

 

 

(16,161

)

 

 

276,945

 

Other income / (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,547

 

 

 

3,067

 

 

 

3,854

 

 

 

6,209

 

Interest expense

 

 

(4,804

)

 

 

(1,905

)

 

 

(6,785

)

 

 

(3,182

)

Other, net

 

 

4,704

 

 

 

553

 

 

 

8,157

 

 

 

(4,433

)

Total other income / (expense)

 

 

1,447

 

 

 

1,715

 

 

 

5,226

 

 

 

(1,406

)

Earnings (loss) before income tax expense

 

 

(59,524

)

 

 

112,796

 

 

 

(10,935

)

 

 

275,539

 

Income tax expense / (benefit)

 

 

(4,307

)

 

 

20,798

 

 

 

3,122

 

 

 

52,522

 

Net earnings / (loss)

 

 

(55,217

)

 

 

91,998

 

 

 

(14,057

)

 

 

223,017

 

Less: Net earnings attributable to non-controlling interests

 

 

12,880

 

 

 

16,818

 

 

 

4,939

 

 

 

39,079

 

Net earnings / (loss) attributable to Skechers U.S.A., Inc.

 

$

(68,097

)

 

$

75,180

 

 

$

(18,996

)

 

$

183,938

 

Net earnings / (loss) per share attributable to Skechers U.S.A., Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.44

)

 

$

0.49

 

 

$

(0.12

)

 

$

1.20

 

Diluted

 

$

(0.44

)

 

$

0.49

 

 

$

(0.12

)

 

$

1.19

 

Weighted average shares used in calculating net earnings / (loss) per share attributable to Skechers U.S.A, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

154,138

 

 

 

153,413

 

 

 

153,849

 

 

 

153,446

 

Diluted

 

 

154,138

 

 

 

153,912

 

 

 

153,849

 

 

 

154,051

 

SKECHERS U.S.A., INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited, dollars in thousands)

 

 

 

Three Months ended

 

 

 

 

 

 

 

June 30,

 

Change

 

 

2020

 

2019

 

$

 

%

Sales:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

$

130,738

 

$

305,307

 

$

(174,569)

 

-57.2%

International wholesale

 

 

385,181

 

 

549,551

 

 

(164,370)

 

-29.9%

Direct-to-consumer

 

 

213,553

 

 

403,707

 

 

(190,154)

 

-47.1%

Total

 

$

729,472

 

$

1,258,565

 

$

(529,093)

 

-42.0%

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

$

50,426

 

$

116,643

 

$

(66,217)

 

-56.8%

International wholesale

 

 

180,449

 

 

249,939

 

 

(69,490)

 

-27.8%

Direct-to-consumer

 

 

137,691

 

 

243,253

 

 

(105,562)

 

-43.4%

Total

 

$

368,566

 

$

609,835

 

$

(241,269)

 

-39.6%

Gross margin percentage:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

38.6%

 

38.2%

 

 

 

 

 

International wholesale

 

46.8%

 

45.5%

 

 

 

 

 

Direct-to-consumer

 

64.5%

 

60.3%

 

 

 

 

 

Total gross margin percentage

 

50.5%

 

48.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended

 

 

 

 

 

 

 

June 30,

 

Change

 

 

2020

 

2019

 

$

 

%

Sales:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

$

508,700

 

$

652,001

 

$

(143,301)

 

-22.0%

International wholesale

 

 

960,380

 

 

1,177,619

 

 

(217,239)

 

-18.4%

Direct-to-consumer

 

 

502,737

 

 

705,701

 

 

(202,964)

 

-28.8%

Total

 

$

1,971,817

 

$

2,535,321

 

$

(563,504)

 

-22.2%

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

$

195,703

 

$

243,094

 

$

(47,391)

 

-19.5%

International wholesale

 

 

420,924

 

 

538,668

 

 

(117,744)

 

-21.9%

Direct-to-consumer

 

 

299,607

 

 

418,582

 

 

(118,975)

 

-28.4%

Total

 

$

916,234

 

$

1,200,344

 

$

(284,110)

 

-23.7%

Gross margin percentage:

 

 

 

 

 

 

 

 

 

 

 

Domestic wholesale

 

38.5%

 

37.3%

 

 

 

 

 

International wholesale

 

43.8%

 

45.7%

 

 

 

 

 

Direct-to-consumer

 

59.6%

 

59.3%

 

 

 

 

 

Total gross margin percentage

 

46.5%

 

47.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING

NON-GAAP FINANCIAL MEASURES

(Unaudited, dollars in thousands except per share data)

 

 

 

Three months ended June 30,

 

 

2020

 

2019

 

 

Change

 

 

Reported GAAP Measure

 

Constant Currency

Adjustment(1)

 

Adjusted for Non-GAAP Measure

 

Reported GAAP Measure

 

 

$

 

%

Sales

 

$

729,472

 

 

$

12,904

 

 

$

742,376

 

 

$

1,258,565

 

 

$

(516,189

)

 

 

-41.0%

Cost of sales

 

 

360,906

 

 

 

7,395

 

 

 

368,301

 

 

 

648,730

 

 

 

(280,429

)

 

 

-43.2%

Gross profit

 

$

368,566

 

 

$

5,509

 

 

$

374,075

 

 

$

609,835

 

 

$

(235,760

)

 

 

-38.7%

Royalty income

 

 

2,596

 

 

 

145

 

 

 

2,741

 

 

 

6,341

 

 

 

(3,600

)

 

 

-56.8%

SG&A expenses

 

 

432,133

 

 

 

6,652

 

 

 

438,785

 

 

 

505,095

 

 

 

(66,310

)

 

 

-13.1%

Earnings / (loss) from operations

 

$

(60,971

)

 

$

(998

)

 

$

(61,969

)

 

$

111,081

 

 

$

(173,050

)

 

 

-155.8%

Other income / (expense)

 

 

1,447

 

 

 

(5,208

)

 

 

(3,761

)

 

 

1,715

 

 

 

(5,476

)

 

 

-319.3%

Income tax expense / (benefit)

 

 

(4,307

)

 

 

71

 

 

 

(4,236

)

 

 

20,798

 

 

 

(25,034

)

 

 

-120.4%

Less: Non-controlling interests

 

 

12,880

 

 

 

127

 

 

 

13,007

 

 

 

16,818

 

 

 

(3,811

)

 

 

-22.7%

Net earnings / (loss)

 

$

(68,097

)

 

$

(6,404

)

 

$

(74,501

)

 

$

75,180

 

 

$

(149,681

)

 

 

-199.1%

Diluted earnings / (loss) per share

 

$

(0.44

)

 

$

(0.04

)

 

$

(0.48

)

 

$

0.49

 

 

$

(0.97

)

 

 

-198.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30,

 

 

2020

 

2019

 

 

Change

 

 

Reported GAAP Measure

 

Constant Currency

Adjustment(1)

 

Adjusted for Non-GAAP Measure

 

Reported GAAP Measure

 

 

$

 

%

Sales

 

$

1,971,817

 

 

$

32,428

 

 

$

2,004,245

 

 

$

2,535,321

 

 

$

(531,076

)

 

 

-20.9%

Cost of sales

 

 

1,055,583

 

 

 

20,201

 

 

 

1,075,784

 

 

 

1,334,977

 

 

 

(259,193

)

 

 

-19.4%

Gross profit

 

$

916,234

 

 

$

12,227

 

 

$

928,461

 

 

$

1,200,344

 

 

$

(271,883

)

 

 

-22.7%

Royalty income

 

 

7,844

 

 

 

(150

)

 

 

7,694

 

 

 

11,542

 

 

 

(3,848

)

 

 

-33.3%

SG&A expenses

 

 

940,239

 

 

 

14,504

 

 

 

954,743

 

 

 

934,941

 

 

 

19,802

 

 

 

2.1%

Earnings / (loss) from operations

 

$

(16,161

)

 

$

(2,427

)

 

$

(18,588

)

 

$

276,945

 

 

$

(295,533

)

 

 

-106.7%

Other income / (expense)

 

 

5,226

 

 

 

4,796

 

 

 

10,022

 

 

 

(1,406

)

 

 

11,428

 

 

 

-812.8%

Income tax expense

 

 

3,122

 

 

 

298

 

 

 

3,420

 

 

 

52,522

 

 

 

(49,102

)

 

 

-93.5%

Less: Non-controlling interests

 

 

4,939

 

 

 

(411

)

 

 

4,528

 

 

 

39,079

 

 

 

(34,551

)

 

 

-88.4%

Net earnings / (loss)

 

$

(18,996

)

 

$

2,482

 

 

$

(16,514

)

 

$

183,938

 

 

$

(200,452

)

 

 

-109.0%

Diluted earnings / (loss) per share

 

$

(0.12

)

 

$

0.02

 

 

$

(0.10

)

 

$

1.19

 

 

$

(1.29

)

 

 

-108.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant Currency Adjustment and Acquisition Related Charges (1)

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of period-over-period fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the company’s performance. We calculate constant currency percentages by converting our current period local currency financial results using the prior-period exchange rates and comparing these adjusted amounts to our prior period reported results.

Certain Non-GAAP Measures

We use the non-GAAP financial measures presented above to evaluate our results of operations, financial condition, liquidity and indebtedness. We believe that these non-GAAP measures provides useful information to investors regarding financial and business trends related to our results of operations, cash flows and indebtedness and that when this non-GAAP financial information is viewed with our GAAP financial information, investors are provided with valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the company’s operating performance and liquidity. In addition, these non-GAAP measures address questions the company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data the company has determined that it is appropriate to make this data available to all investors. None of the non-GAAP measures presented should be considered as an alternative to net income or loss, operating income, cash flows from operating activities, total indebtedness or any other measures of operating performance and financial condition, liquidity or indebtedness derived in accordance with GAAP. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Company Contact:

David Weinberg
Chief Operating Officer
John Vandemore
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100

Investor Relations:

Andrew Greenebaum
Addo Investor Relations
(310) 829-5400

Press:

Jennifer Clay
Vice President,
Corporate Communications
SKECHERS USA, Inc.
(310) 318-3100

Source: SKECHERS USA, Inc.