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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February 10, 2016
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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 February 10, 2016, the Company issued a press release announcing its results of operations and financial condition for the three months and twelve months ended December 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 February 10, 2016.
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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February 10, 2016
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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 February 10, 2016.
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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
Addo Communications
(310) 829-5400 |
SKECHERS ANNOUNCES FOURTH QUARTER AND
FISCAL YEAR 2015 FINANCIAL RESULTS
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
MANHATTAN BEACH, CA. February 10, 2016 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 Companys 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 Lovatos 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 2015both the gains of 22 percent
in our domestic wholesale channel and 59 percent in our international distributor and subsidiary
business channel over 2014is 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
storesof 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 Companys 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 Companys 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 Companys 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 Companys 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.
###
1
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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December 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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$ |
507,991 |
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$ |
466,685 |
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Trade accounts receivable, net |
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343,930 |
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272,103 |
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Other receivables |
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18,661 |
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16,510 |
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Total receivables |
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362,591 |
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288,613 |
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Inventories |
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620,247 |
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453,837 |
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Prepaid expenses and other current assets |
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57,363 |
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57,015 |
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Deferred tax assets |
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22,275 |
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18,864 |
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Total current assets |
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1,570,467 |
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1,285,014 |
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Property, plant and equipment, net |
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435,907 |
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373,183 |
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Other assets |
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41,034 |
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16,721 |
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Total non-current assets |
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476,941 |
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389,904 |
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TOTAL ASSETS |
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$ |
2,047,408 |
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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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$ |
15,653 |
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$ |
101,407 |
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Accounts payable |
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473,983 |
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352,815 |
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Short-term borrowings |
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59 |
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1,810 |
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Accrued expenses |
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87,318 |
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49,705 |
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Total current liabilities |
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577,013 |
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505,737 |
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Long-term borrowings, net of current installments |
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68,942 |
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15,081 |
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Other long-term liabilities |
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25,719 |
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19,993 |
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Total non-current liabilities |
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94,661 |
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35,074 |
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Total liabilities |
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671,674 |
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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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1,327,556 |
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1,075,249 |
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Noncontrolling interests |
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48,178 |
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58,858 |
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Total equity |
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1,375,734 |
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1,134,107 |
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TOTAL LIABILITIES AND EQUITY |
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$ |
2,047,408 |
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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 December 31, |
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Twelve Months Ended December 31, |
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2015 |
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2014 |
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2015 |
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2014 |
Net sales |
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$ |
722,683 |
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$ |
569,722 |
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$ |
3,147,323 |
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$ |
2,377,561 |
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Cost of sales |
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392,829 |
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312,093 |
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1,723,315 |
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1,305,656 |
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Gross profit |
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329,854 |
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257,629 |
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1,424,008 |
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1,071,905 |
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Royalty income |
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3,921 |
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|
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2,179 |
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11,745 |
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9,107 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
333,775 |
|
|
|
259,808 |
|
|
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1,435,753 |
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|
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1,081,012 |
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Operating expenses: |
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Selling |
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57,934 |
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40,198 |
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235,586 |
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|
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181,018 |
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General and administrative |
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221,133 |
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|
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186,598 |
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849,343 |
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|
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690,923 |
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|
|
|
279,067 |
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|
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226,796 |
|
|
|
1,084,929 |
|
|
|
871,941 |
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|
|
|
|
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Earnings from operations |
|
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54,708 |
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|
33,012 |
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350,824 |
|
|
|
209,071 |
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Other income (expense): |
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|
|
|
|
|
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|
|
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|
|
|
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Interest, net |
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(1,969 |
) |
|
|
(3,093 |
) |
|
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(10,006 |
) |
|
|
(11,629 |
) |
Other, net |
|
|
(2,141 |
) |
|
|
(1,230 |
) |
|
|
(7,321 |
) |
|
|
(6,062 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,110 |
) |
|
|
(4,323 |
) |
|
|
(17,327 |
) |
|
|
(17,691 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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 |
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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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
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