(5) EARNINGS (LOSS) PER SHARE

     Basic earnings (loss) per share represents net earnings (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share represents the weighted average number of common shares and potential common shares, if dilutive, that would arise from the exercise of stock options and nonvested shares using the treasury stock method.

     The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating basic earnings (loss) per share (in thousands, except per share amounts):

		Three-Months Ended June 30,								Six-Months Ended June 30,
Basic earnings (loss) per share		2011				2010				2011				2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.		$	(29,916	)		$	40,237			$	(18,108	)		$	96,533
Weighted average common shares outstanding			48,341				47,422				48,292				47,107
Basic earnings (loss) per share attributable to Skechers U.S.A., Inc.		$	(0.62	)		$	0.85			$	(0.38	)		$	2.05

     The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating diluted earnings (loss) per share (in thousands, except per share amounts):

		Three-Months Ended June 30,								Six-Months Ended June 30,
Diluted earnings (loss) per share		2011				2010				2011				2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.		$	(29,916	)		$	40,237			$	(18,108	)		$	96,533
Weighted average common shares outstanding			48,341				47,422				48,292				47,107
Dilutive effect of stock options			0				1,708				0				1,848
Weighted average common shares outstanding			48,341				49,130				48,292				48,955
Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc.		$	(0.62	)		$	0.82			$	(0.38	)		$	1.97

     Options to purchase 851 shares and 38,938 shares of Class A common stock were not included in the computation of diluted earnings (loss) per share for the three months and six months ended June 30, 2011, respectively, because their effect would have been anti-dilutive. There were no options excluded from the computation of diluted earnings per share for the three months and six months ended June 30, 2010, respectively.