Skechers Soars in Q2

The future is looking bright for Skechers USA Inc., analysts said last week.

“They’re hitting on all cylinders,” said B. Riley & Co. analyst Jeff Van Sinderen. “They have a lot of business momentum and it’s broad-based across product categories. [The company] went back and redeveloped their entire product line. It started to catch domestically and it’s doing well internationally. They’ve still got a lot of potential growth internationally. … They’re going to have a good second half of the year.”

“Skechers is on a roll,” Sterne Agee analyst Sam Poser wrote in an earnings note. “Strength is coming across most all categories and geographies. Expenses have been well managed and should continue to be for the balance of the year.”

Strong global wholesale growth, success in its owned retail stores and an increase in its domestic wholesale business helped propel the Manhattan Beach, Calif.-based company forward during the quarter.
For the period ended June 30, the firm reported net earnings of $7.1 million, or 14 cents a share, compared with a loss of $1.8 million, or 4 cents, for the year-ago quarter.

Sales during the period rose 11.5 percent, to $428.2 million, compared with $384 million for the second quarter of 2012.

The company significantly beat Wall Street expectations for the period. Analysts polled by Yahoo Finance had predicted earnings of 3 cents a share on sales of $427.6 million.

“Several key initiatives have received a broad acceptance, including Skechers GoWalk, Skechers Relaxed Fit, Bobs from Skechers and Skechers Kids,” COO and CFO David Weinberg said during a conference call with investors and analysts last Wednesday.

He added, “We experienced double-digit growth in several of our core divisions including men’s and women’s sport. We also achieved double-digit growth in our Skechers Cali division, a significant achievement given the unseasonably cool weather.”

Weinberg went on to say he expects demand to remain strong across the company’s product line. Meanwhile, new retail doors are in development.

 “We’re very pleased with our second quarter sales growth and the continued demand for our product in the marketplace,” he said. “We’re looking forward to further developing our new successful product categories for long-term success, expanding our retail footprint with another 35 [or more] company-owned stores this year and more distributor-owned stores around the world.”

Skechers ended the quarter with $333 million in cash.

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