SKX
$45.78
Skechers U.S.A.
$.11
.24%
Earnings Details
2nd Quarter June 2021
Thursday, July 22, 2021 4:05:00 PM
Tweet Share Watch
Summary

Skechers U.S.A. Beats

Skechers U.S.A. (SKX) reported 2nd Quarter June 2021 earnings of $0.88 per share on revenue of $1.7 billion. The consensus earnings estimate was $0.52 per share on revenue of $1.5 billion. The Earnings Whisper number was $0.56 per share. Revenue grew 127.3% on a year-over-year basis.

The company said it expects third quarter earnings of $0.70 to $0.75 per share on revenue of $1.60 billion to $1.65 billion. The current consensus earnings estimate is $0.61 per share on revenue of $1.51 billion for the quarter ending September 30, 2021. The company also said it now expects 2021 earnings of $2.55 to $2.65 per share on revenue of $6.15 billion to $6.25 billion. The company's previous guidance was earnings of $1.80 to $2.00 per share on revenue of $5.80 billion to $5.90 billion and the current consensus earnings estimate is $2.09 per share on revenue of $5.92 billion for the year ending December 31, 2021.

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
$0.88
Earnings Whisper
$0.56
Consensus Estimate
$0.52
Reported Revenue
$1.66 Bil
Revenue Estimate
$1.48 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Skechers Announces Record Second Quarter 2021 Sales of $1.66 Billion and Diluted Earnings Per Share Of $0.88

LOS ANGELES--(BUSINESS WIRE)--SKECHERS U.S.A., Inc. (“Skechers” or the “Company”) (NYSE:SKX), The Comfort Technology Company and a global footwear leader, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter Highlights

  • Record quarterly sales of $1.66 billion, an increase of 127.3% year-over-year, and 31.7% over the second quarter of 2019
  • Domestic Wholesale sales grew 205.7%
  • Direct-to-Consumer sales grew 137.8%
  • Record quarterly diluted earnings per share of $0.88
  • Fully repaid $452.5 million revolving credit facility

“Skechers second quarter financial results exceeded expectations as we achieved record quarterly sales of over $1.6 billion, a 127.3% increase over the same period in 2020, and 31.7% increase over 2019,” stated David Weinberg, Chief Operating Officer of Skechers. “This growth, along with both record gross margin of 51.2% and record quarterly diluted earnings per share of $0.88, was the result of triple-digit improvements in both our domestic and international businesses compared to second quarter 2020, and over 30% as compared to the second quarter of 2019. We accomplished these financial results even as we continued to face COVID-19 related challenges including delayed shipments and port constraints as well as temporary store closures in some key markets, including India, Canada, and parts of Europe and South America. With a higher average selling price and significantly more units sold, we saw sales increases of 205.7% in Domestic Wholesale, 137.8% in Direct-to-Consumer, and 94.8% in International Wholesale over the second quarter of 2020. As consumers began returning to a more normal lifestyle in many markets, demand increased for our comfort technology products, including in North America, across Europe, and in China, which achieved double-digit gains over both 2020 and 2019. Looking to the remainder of the year and into the next year, we remain confident in the strength of our brand and the relevance of our distinct product offering.”

“Innovation and developing footwear technology has been a significant part of Skechers’ DNA for much of our history – from our durable occupational footwear made to last, to the lightweight cushioning and performance materials for our first generation Skechers GO RUN and Skechers GO WALK lines, to features that deliver comfort in every pair. Other features and products like our Skechers Air-Cooled Memory Foam Technology and more recently our growing recycled collection called Our Planet Matters exemplify this,” began Robert Greenberg, Chief Executive Officer of Skechers. “Our core product philosophy of comfort, style, innovation and quality at the right price has resonated with consumers during the pandemic, and as we emerge from it. Consumers are embracing a more relaxed lifestyle and want to incorporate comfort into their work and weekend wear. To communicate that Skechers is The Comfort Technology Company, we delivered new campaigns for men, women and kids that highlighted this key message. In the second quarter, our multi-platform approach included traditional television, outdoor, print and online in global markets. Our strategic approach to marketing created awareness, drove sales and resulted in our record revenues. Our intention is to continue innovating and improving our comfort technologies to deliver fresh new product in the coming seasons.”

Second Quarter 2021 Financial Results

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

(in millions, except per share data)

 

2021

 

 

2020

 

 

$

 

 

%

 

Sales

 

$

1,657.8

 

 

$

729.5

 

 

$

928.3

 

 

 

127.3

 

 

Gross profit

 

 

849.5

 

 

 

368.6

 

 

 

480.9

 

 

 

130.5

 

 

Gross margin

 

 

51.2

%

 

 

50.5

%

 

 

 

 

 

 

72

 

bps

SG&A expenses

 

 

652.4

 

 

 

432.1

 

 

 

220.3

 

 

 

51.0

 

 

As a % of sales

 

39.4

%

 

 

59.2

%

 

 

 

 

 

 

(1,988

)

bps

Earnings (loss) from operations

 

 

201.2

 

 

 

(61.0

)

 

 

262.2

 

 

 

429.8

 

 

Operating margin

 

 

12.1

%

 

 

(8.4

)%

 

 

 

 

 

 

2,050

 

bps

Net earnings (loss)

 

 

137.4

 

 

 

(68.1

)

 

 

205.5

 

 

 

301.8

 

 

Diluted earnings (loss) per share

 

$

0.88

 

 

$

(0.44

)

 

$

1.32

 

 

 

300.0

 

 

Second quarter sales increased 127.3% as a result of a 147.3% increase in domestic sales and a 113.7% increase in international sales. Domestic and international growth was driven by increases in both wholesale and direct-to-consumer, as COVID-19 restrictions eased over the prior year. On a constant currency basis, the Company’s total sales increased 117.5%.

Sales grew across all segments with increases to Domestic Wholesale of 205.7%, International Wholesale of 94.8%, and Direct-to-Consumer of 137.8%. Improvements in Domestic Wholesale were the result of higher unit sales volume. International Wholesale increases were driven by 150.2% growth in our European subsidiaries, led by the United Kingdom and Germany, 50.9% growth in China, and 122.3% growth in Distributor sales. Improvements in Direct-to-Consumer sales resulted from growth across both domestic and international retail stores, slightly offset by declines in domestic e-commerce sales. Direct-to-Consumer comparable same store sales increased 109.2%, driven by an increase of 95.6% domestically and 165.2% internationally.

Gross margin increased 72 basis points to 51.2% primarily driven by increased Direct-to-Consumer gross margins, resulting from higher average selling prices and reduced promotional activity. Higher average selling prices were partially offset by the unfavorable channel mix impact from lower domestic e-commerce sales and higher Domestic Wholesale sales.

SG&A increased $220.3 million, or 51.0%. Selling expenses increased by $72.2 million, or 119.9%, due to higher global advertising costs. General and administrative increased by $148.0 million, or 39.8%. The increase was primarily the result of higher incentive compensation and labor costs as well as higher global warehouse and distribution expenses.

Earnings from operations increased $262.2 million to $201.2 million.

Net earnings were $137.4 million and diluted earnings per share were $0.88.

In the second quarter, the Company’s effective income tax rate was 20.4%.

“Our record second quarter results reflect the outstanding execution of our long-term growth strategy. Led by our comfort technology products and resonant brand, we continued to expand globally and further our direct-to-consumer presence,” stated John Vandemore, Chief Financial Officer of Skechers. “The result was evident in growth across our segments and record profitability and is a testament to the prudence of the infrastructure investments we have made and are continuing to make to support our brand and our strategy. These factors coupled with the strength of our balance sheet, give us abundant confidence that Skechers remains poised to continue growing long into the future.”

Six Month 2021 Financial Results

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

(in millions, except per share data)

 

2021

 

 

2020

 

 

$

 

 

%

 

Sales

 

$

3,086.2

 

 

$

1,971.8

 

 

$

1,114.4

 

 

 

56.5

 

 

Gross profit

 

 

1,529.1

 

 

 

916.2

 

 

 

612.9

 

 

 

66.9

 

 

Gross margin

 

 

49.5

%

 

 

46.5

%

 

 

 

 

 

 

308

 

bps

SG&A expenses

 

 

1,180.4

 

 

 

940.2

 

 

 

240.2

 

 

 

25.5

 

 

As a % of sales

 

 

38.2

%

 

 

47.7

%

 

 

 

 

 

 

(943

)

bps

Earnings (loss) from operations

 

 

358.9

 

 

 

(16.2

)

 

 

375.1

 

 

 

2,315.4

 

 

Operating margin

 

 

11.6

%

 

 

(0.8

)%

 

 

 

 

 

 

1,245

 

bps

Net earnings (loss)

 

 

235.9

 

 

 

(19.0

)

 

 

254.9

 

 

 

1,341.6

 

 

Diluted earnings (loss) per share

 

$

1.51

 

 

$

(0.12

)

 

$

1.63

 

 

 

1,358.3

 

 

Year to date sales increased 56.5%. Year to date domestic and international sales each grew 56.5% with the largest contribution derived from International Wholesale growth. On a constant currency basis, the Company’s total sales increased 50.9%.

Sales grew across all segments with increases to Domestic Wholesale of 52.2%, International Wholesale of 52.3%, and Direct-to-Consumer of 69.0%. Improvements in Domestic Wholesale were the result of higher unit sales volume. Improvements in International Wholesale were the result of growth in China of 88.4% and Europe of 32.9%. Direct-to-Consumer comparable same store sales increased 54.8%, driven by an increase of 59.4% domestically and 40.8% internationally.

Gross margin increased 308 basis points to 49.5% primarily driven by increased gross margins in the Direct-to-Consumer segment, which was the result of increased average selling prices and reduced promotional activity.

SG&A increased by $240.2 million or 25.5%. Selling expenses increased by $83.4 million or 62.1%, primarily due to higher global advertising costs. General and administrative increased by $156.7 million or 19.4%, primarily due to higher incentive compensation and labor costs as well as higher global warehouse and distribution expenses.

Earnings from operations were $358.9 million, an increase of $375.1 million compared to a loss of $16.2 million in the prior-year period.

Net earnings were $235.9 million and diluted earnings per share were $1.51.

The Company’s effective income tax rate was 20.3%.

Balance Sheet

Cash, cash equivalents and investments totaled $1.32 billion, a decrease of $258.5 million, or 16.4% from December 31, 2020. The Company repaid $452.5 million on its revolving credit facility in the second quarter.

Total inventory was $1.06 billion, an increase of $40.5 million or 4.0% from December 31, 2020. Increased inventory levels primarily reflect growth in the International Wholesale segment.

Outlook

For the fiscal year 2021, the Company believes it will achieve sales between $6.15 billion and $6.25 billion and diluted earnings per share of between $2.55 and $2.65. Further, the Company believes that for the third quarter of 2021, it will achieve sales between $1.60 billion and $1.65 billion and diluted earnings per share of between $0.70 and $0.75.

Store Count

 

 

Number of Store Locations as of

 

 

 

 

 

 

 

 

 

Number of Store Locations as of

 

 

 

December 31, 2020

 

 

Opened

 

 

Closed(1)

 

June 30, 2021

 

Domestic stores

 

 

523

 

 

 

12

 

 

 

(23

)

 

 

512

 

International stores

 

 

331

 

 

 

13

 

 

 

(5

)

 

 

339

 

Joint venture stores

 

 

467

 

 

 

67

 

 

 

(52

)

 

 

482

 

Distributor, licensee and franchise stores

 

 

2,570

 

 

 

260

 

 

 

(106

)

 

 

2,724

 

Total Skechers stores

 

 

3,891

 

 

 

352

 

 

 

(186

)

 

 

4,057

 

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

Certain Non-GAAP Measures

To supplement our unaudited condensed consolidated financial statements presented under generally accepted accounting principles in the United States (“GAAP”), we use the non-GAAP financial measures presented to evaluate our results of operations, financial condition, liquidity and indebtedness. We believe that these non-GAAP measures provide 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 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. Reconciliations of these non-GAAP financial measures to the most nearly comparable GAAP financial measures are presented below.

Second Quarter 2021 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 2021 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 22, 2021 at 7:30 p.m. ET, through August 5, 2021, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13721146.

About SKECHERS U.S.A., Inc.

Skechers, The Comfort Technology Company based in Southern California, 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 4,057 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 GAAP. This announcement 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 may 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, 2020 and its quarterly report on Form 10-Q for the three months ended March 31, 2021. More specifically, the COVID-19 pandemic has had and may continue to have 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 factories 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 the COVID-19 pandemic 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)

 

 

 

As of June 30,

 

 

As of December 31,

 

(in thousands)

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,091,355

 

 

$

1,370,826

 

Short-term investments

 

 

107,626

 

 

 

100,767

 

Trade accounts receivable, net

 

 

778,216

 

 

 

619,800

 

Other receivables

 

 

66,298

 

 

 

69,222

 

Total receivables

 

 

844,514

 

 

 

689,022

 

Inventory

 

 

1,057,284

 

 

 

1,016,774

 

Prepaid expenses and other current assets

 

 

145,256

 

 

 

166,962

 

Total current assets

 

 

3,246,035

 

 

 

3,344,351

 

Property, plant and equipment, net

 

 

1,026,777

 

 

 

935,441

 

Operating lease right-of-use assets

 

 

1,134,145

 

 

 

1,171,521

 

Deferred tax assets

 

 

61,276

 

 

 

63,884

 

Long-term investments

 

 

122,542

 

 

 

108,412

 

Goodwill

 

 

93,497

 

 

 

93,497

 

Other assets, net

 

 

80,459

 

 

 

95,263

 

Total non-current assets

 

 

2,518,696

 

 

 

2,468,018

 

TOTAL ASSETS

 

$

5,764,731

 

 

$

5,812,369

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

831,910

 

 

$

744,077

 

Operating lease liabilities

 

 

214,271

 

 

 

204,370

 

Accrued expenses

 

 

248,996

 

 

 

208,712

 

Current installments of long-term borrowings

 

 

42,547

 

 

 

52,250

 

Short-term borrowings

 

 

575

 

 

 

3,297

 

Total current liabilities

 

 

1,338,299

 

 

 

1,212,706

 

Long-term borrowings, excluding current installments

 

 

268,913

 

 

 

679,415

 

Long-term operating lease liabilities

 

 

1,015,754

 

 

 

1,065,069

 

Deferred tax liabilities

 

 

10,421

 

 

 

11,439

 

Other long-term liabilities

 

 

117,240

 

 

 

118,077

 

Total non-current liabilities

 

 

1,412,328

 

 

 

1,874,000

 

Total liabilities

 

 

2,750,627

 

 

 

3,086,706

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Preferred Stock

 

 

 

 

 

 

Class A Common Stock

 

 

135

 

 

 

134

 

Class B Common Stock

 

 

21

 

 

 

21

 

Additional paid-in capital

 

 

395,951

 

 

 

372,165

 

Accumulated other comprehensive loss

 

 

(34,990

)

 

 

(27,285

)

Retained earnings

 

 

2,372,342

 

 

 

2,136,400

 

Skechers U.S.A., Inc. equity

 

 

2,733,459

 

 

 

2,481,435

 

Noncontrolling interests

 

 

280,645

 

 

 

244,228

 

Total stockholders' equity

 

 

3,014,104

 

 

 

2,725,663

 

TOTAL LIABILITIES AND EQUITY

 

$

5,764,731

 

 

$

5,812,369

 

 

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

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

(in thousands, except per share data)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Sales

 

$

1,657,773

 

 

$

729,472

 

 

$

3,086,191

 

 

$

1,971,817

 

Cost of sales

 

 

808,280

 

 

 

360,906

 

 

 

1,557,075

 

 

 

1,055,583

 

Gross profit

 

 

849,493

 

 

 

368,566

 

 

 

1,529,116

 

 

 

916,234

 

Royalty income

 

 

4,098

 

 

 

2,596

 

 

 

10,135

 

 

 

7,844

 

 

 

 

853,591

 

 

 

371,162

 

 

 

1,539,251

 

 

 

924,078

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling

 

 

132,448

 

 

 

60,240

 

 

 

217,744

 

 

 

134,295

 

General and administrative

 

 

519,934

 

 

 

371,893

 

 

 

962,629

 

 

 

805,944

 

Selling, general and administrative

 

 

652,382

 

 

 

432,133

 

 

 

1,180,373

 

 

 

940,239

 

Earnings (loss) from operations

 

 

201,209

 

 

 

(60,971

)

 

 

358,878

 

 

 

(16,161

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

909

 

 

 

1,547

 

 

 

1,704

 

 

 

3,854

 

Interest expense

 

 

(3,417

)

 

 

(4,804

)

 

 

(7,530

)

 

 

(6,785

)

Other, net

 

 

4,666

 

 

 

4,704

 

 

 

(6,190

)

 

 

8,157

 

Total other income (expense)

 

 

2,158

 

 

 

1,447

 

 

 

(12,016

)

 

 

5,226

 

Earnings (loss) before income taxes

 

 

203,367

 

 

 

(59,524

)

 

 

346,862

 

 

 

(10,935

)

Income tax expense (benefit)

 

 

41,544

 

 

 

(4,307

)

 

 

70,530

 

 

 

3,122

 

Net earnings (loss)

 

 

161,823

 

 

 

(55,217

)

 

 

276,332

 

 

 

(14,057

)

Less: Net earnings attributable to noncontrolling interest

 

 

24,454

 

 

 

12,880

 

 

 

40,390

 

 

 

4,939

 

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

 

$

137,369

 

 

$

(68,097

)

 

$

235,942

 

 

$

(18,996

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

(0.44

)

 

$

1.52

 

 

$

(0.12

)

Diluted

 

$

0.88

 

 

$

(0.44

)

 

$

1.51

 

 

$

(0.12

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

155,561

 

 

 

154,138

 

 

 

155,196

 

 

 

153,849

 

Diluted

 

 

156,674

 

 

 

154,138

 

 

 

156,321

 

 

 

153,849

 

 

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

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Change

 

(in millions)

 

2021

 

 

2020

 

 

$

 

 

%

 

Domestic Wholesale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

399.7

 

 

$

130.7

 

 

 

269.0

 

 

 

205.7

 

 

Gross margin

 

 

38.8

%

 

 

38.6

%

 

 

 

 

 

 

26

 

bps

International Wholesale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

750.2

 

 

$

385.2

 

 

 

365.0

 

 

 

94.8

 

 

Gross margin

 

 

46.5

%

 

 

46.8

%

 

 

 

 

 

 

(32

)

bps

Direct-to-Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

507.9

 

 

$

213.6

 

 

 

294.3

 

 

 

137.8

 

 

Gross margin

 

 

68.0

%

 

 

64.5

%

 

 

 

 

 

 

350

 

bps

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,657.8

 

 

$

729.5

 

 

 

928.3

 

 

 

127.3

 

 

Gross margin

 

 

51.2

%

 

 

50.5

%

 

 

 

 

 

 

72

 

bps

 

 

Six Months Ended June 30,

 

 

Change

 

(in millions)

 

2021

 

 

2020

 

 

$

 

 

%

 

Domestic Wholesale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

774.3

 

 

$

508.7

 

 

 

265.6

 

 

 

52.2

 

 

Gross margin

 

 

38.1

%

 

 

38.5

%

 

 

 

 

 

 

(36

)

bps

International Wholesale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,462.4

 

 

$

960.4

 

 

 

502.0

 

 

 

52.3

 

 

Gross margin

 

 

45.8

%

 

 

43.8

%

 

 

 

 

 

 

198

 

bps

Direct-to-Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

849.5

 

 

$

502.7

 

 

 

346.8

 

 

 

69.0

 

 

Gross margin

 

 

66.4

%

 

 

59.6

%

 

 

 

 

 

 

682

 

bps

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

3,086.2

 

 

$

1,971.8

 

 

 

1,114.4

 

 

 

56.5

 

 

Gross margin

 

 

49.5

%

 

 

46.5

%

 

 

 

 

 

 

308

 

bps

 

SKECHERS U.S.A., INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES (Unaudited)

Adjusted Earnings and Adjusted Diluted Earnings Per Share

We believe that Adjusted Earnings and Adjusted Diluted Earnings Per Share provide meaningful supplemental information to investors in evaluating our business performance for the three and six months ended June 30, 2021. Adjusted Earnings and Adjusted Diluted Earnings Per Share are not measures of financial performance under GAAP and should be considered in addition to, and not a substitute for, Net Earnings and Diluted Net Earnings Per Share which are the most comparable GAAP measures. Our method of determining non-GAAP financial measures may differ from other companies’ methods and therefore may not be comparable to those used by other companies.

Constant Currency Adjustment

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.

 

 

Three Months Ended June 30,

 

 

2021

 

2020

 

Change

(in millions,

except per share data)

 

Reported GAAP Measure

 

Constant Currency

Adjustment

 

Adjusted for Non-GAAP Measures

 

Reported GAAP Measure

 

$

 

%

Sales

 

$

1,657.8

 

 

$

(71.3

)

 

$

1,586.5

 

 

$

729.5

 

 

 

857.0

 

 

 

117.5

 

Cost of sales

 

 

808.3

 

 

 

(37.7

)

 

 

770.6

 

 

 

360.9

 

 

 

409.7

 

 

 

113.5

 

Gross profit

 

$

849.5

 

 

$

(33.6

)

 

$

815.9

 

 

$

368.6

 

 

 

447.3

 

 

 

121.4

 

Royalty income

 

 

4.1

 

 

 

(0.4

)

 

 

3.7

 

 

 

2.6

 

 

 

1.1

 

 

 

42.3

 

SG&A expenses

 

 

652.4

 

 

 

(22.2

)

 

 

630.2

 

 

 

432.1

 

 

 

198.1

 

 

 

45.8

 

Earnings (loss) from operations

 

$

201.2

 

 

$

(11.8

)

 

$

189.4

 

 

$

(60.9

)

 

 

250.3

 

 

 

411.0

 

Other income (expense)

 

 

2.2

 

 

 

(4.8

)

 

 

(2.6

)

 

 

1.4

 

 

 

(4.0

)

 

 

(285.7

)

Income tax (benefit) expense

 

 

41.5

 

 

 

(1.5

)

 

 

40.0

 

 

 

(4.3

)

 

 

44.3

 

 

 

1,030.2

 

Less: Noncontrolling interests

 

 

24.5

 

 

 

(2.4

)

 

 

22.1

 

 

 

12.9

 

 

 

9.2

 

 

 

71.3

 

Net earnings (loss)

 

$

137.4

 

 

$

(12.7

)

 

$

124.7

 

 

$

(68.1

)

 

 

192.8

 

 

 

283.1

 

Diluted earnings (loss) per share

 

$

0.88

 

 

$

(0.08

)

 

$

0.80

 

 

$

(0.44

)

 

 

1.24

 

 

 

281.8

 

 

 

Six Months Ended June 30,

 

 

2021

 

2020

 

Change

(in millions,

except per share data)

 

Reported GAAP Measure

 

Constant Currency

Adjustment

 

Adjusted for Non-GAAP Measures

 

Reported GAAP Measure

 

$

 

%

Sales

 

$

3,086.2

 

 

$

(111.6

)

 

$

2,974.6

 

 

$

1,971.8

 

 

 

1,002.8

 

 

 

50.9

 

Cost of sales

 

 

1,557.1

 

 

 

(61.9

)

 

 

1,495.2

 

 

 

1,055.6

 

 

 

439.6

 

 

 

41.6

 

Gross profit

 

$

1,529.1

 

 

$

(49.7

)

 

$

1,479.4

 

 

$

916.2

 

 

 

563.2

 

 

 

61.5

 

Royalty income

 

 

10.2

 

 

 

(0.9

)

 

 

9.3

 

 

 

7.8

 

 

 

1.5

 

 

 

19.2

 

SG&A expenses

 

 

1,180.4

 

 

 

(33.5

)

 

 

1,146.9

 

 

 

940.2

 

 

 

206.7

 

 

 

22.0

 

Earnings (loss) from operations

 

$

358.9

 

 

$

(17.1

)

 

$

341.8

 

 

$

(16.2

)

 

 

358.0

 

 

 

2,209.9

 

Other income (expense)

 

 

(12.1

)

 

 

5.8

 

 

 

(6.3

)

 

 

5.2

 

 

 

(11.5

)

 

 

(221.2

)

Income tax expense

 

 

70.5

 

 

 

(2.5

)

 

 

68.0

 

 

 

3.1

 

 

 

64.9

 

 

 

2,093.5

 

Less: Noncontrolling interests

 

 

40.4

 

 

 

(3.5

)

 

 

36.9

 

 

 

4.9

 

 

 

32.0

 

 

 

653.1

 

Net earnings (loss)

 

$

235.9

 

 

$

(5.3

)

 

$

230.6

 

 

$

(19.0

)

 

 

249.6

 

 

 

1,313.7

 

Diluted earnings (loss) per share

 

$

1.51

 

 

$

(0.03

)

 

$

1.48

 

 

$

(0.12

)

 

 

1.60

 

 

 

1,333.3

 

 

Investor Relations:
Andrew Greenebaum
Addo Investor Relations
investors@skx.com

Press:
Jennifer Clay
Vice President,
Corporate Communications
SKECHERS U.S.A., Inc.
(310) 318-3100

Source: SKECHERS U.S.A., Inc.