Skechers Announces Second Quarter 2023 Financial Results and Record Quarterly Sales of $2.01 Billion

Jul 27, 2023 • 4:05 pm EDT

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, 2023.

Second Quarter Highlights

  • Record quarterly sales of $2.01 billion, a year-over-year increase of 7.7%
  • Diluted earnings per share of $0.98, a year-over-year increase of 69.0%
  • Direct-to-Consumer sales grew 29.1%
  • Inventory decrease of $332.0 million or 18.3% from December 31, 2022
  • Acquired Scandinavian distributor

“Skechers second quarter results set a new quarterly sales record of $2.01 billion. This achievement continues to reflect the global demand for our comfort technology products, evidenced by double- or triple-digit sales growth in most markets. We saw increases of 20% in APAC, including 19% in China and 27% in India, as well as 16% in EMEA, including 29% in Germany and 13% in the UK,” began David Weinberg, Chief Operating Officer at Skechers. “Our strong gross margin of 52.7% was primarily driven by a higher proportion of Direct-to-Consumer sales, which grew 29%. We were able to deliver our product more effectively and improve our inventory levels, which enabled the robust sales across our comfortable, innovative, stylish and high-quality collections. As we look to the future and our goal of $10 billion in annual sales by 2026, we remain focused on improving distribution efficiencies, developing new categories including some that will be introduced later this year, enhancing our Direct-to-Consumer segment, and further expanding our international business, including the acquisition of our Scandinavian distributor, which we believe will deliver increased sales growth in the coming years.”

“The second quarter marked yet another sales record and a new milestone as we made the Fortune 500 list of largest companies, a testament to the strength of our brand and the dedication of our entire organization to consistently create, innovate and meet the footwear needs of consumers,” added Robert Greenberg, Chief Executive Officer of Skechers. “Not only are we outfitting the world in the most comfortable lifestyle footwear, but we are also offering high-performance golf and pickleball shoes, and delivering memorable collaborations like our iconic Rolling Stones collection in June and our Skechers x Ashley Park capsule launched just last week. We strongly believe in the importance of driving awareness of our vast offering. In this quarter alone, we introduced numerous targeted campaigns, including Skechers Uno with Doja Cat, one of Time’s 100 most influential people in 2023; Skechers Hands Free Slip-ins with football legend Tony Romo and Los Angeles Dodgers pitcher Clayton Kershaw, among others; as well as a brand spot with former A-Team star, Mr. T, who claims he’s the only ‘T’ in Skechers. The power of our marketing and the relevancy of our footwear resonates throughout our 4,700 Skechers stores around the world and at retailers, where consumers can slip into our footwear and leave with the understanding that they just purchased unbelievable comfort technology. This is what motivates the Skechers team — the enthusiasm from our partners around the world, and most importantly, the satisfaction from new shoppers and returning loyal fans of our brand. With this incredible momentum, I am confident in our vision for an even more successful future.”

Second Quarter 2023 Financial Results

 

 

Three Months Ended June 30,

Change

(in millions, except per share data)

2023

2022

$

%

Sales

$

2,012.5

 

$

1,867.8

 

144.7

7.7

Gross profit

 

1,060.5

 

 

897.6

 

162.9

18.2

Gross margin

 

52.7

%

 

48.1

%

 

460 bps

Operating expenses

 

842.8

 

 

743.4

 

99.4

13.4

As a % of sales

 

41.9

%

 

39.8

%

 

210 bps

Earnings from operations

 

217.7

 

 

154.2

 

63.5

41.2

Operating margin

 

10.8

%

 

8.3

%

 

260 bps

Net earnings

 

152.8

 

 

90.4

 

62.4

69.0

Diluted earnings per share

$

0.98

 

$

0.58

 

0.40

69.0

Second quarter sales increased 7.7% as a result of a 17.9% increase internationally and a 4.6% decrease domestically. Direct-to-Consumer increased 29.1% and Wholesale decreased 5.9%. On a constant currency basis, sales increased 9.1%.

Wholesale sales declined $67.3 million, or 5.9%, which includes a decrease in AMER of 18.7%, partially offset by increases in APAC of 14.3% and EMEA of 7.4%. Wholesale volume decreased 13.1% and average selling price increased 8.0%.

Direct-to-Consumer sales grew $212.0 million, or 29.1%, which includes increases in AMER of 28.2%, APAC of 25.1%, and EMEA of 47.2%. Direct-to-Consumer volume increased 23.8% and average selling price increased 4.4%.

Gross margin was 52.7%, an increase of 460 basis points, primarily due to a higher proportion of Direct-to-Consumer sales and higher average selling prices.

Operating expenses increased $99.4 million, or 13.4%, and as a percentage of sales increased 210 basis points to 41.9%. Selling expenses increased $20.5 million, or 12.3%, and as a percentage of sales increased 40 basis points to 9.3%. The increase was due to higher brand demand creation expenditures. General and administrative expenses increased $78.9 million, or 13.7%, and as a percentage of sales increased 170 basis points to 32.6%. Increased expenses were primarily driven by labor, increased facility costs, including rent and depreciation, and warehouse and distribution expenses.

Earnings from operations increased $63.5 million, or 41.2%, to $217.7 million.

Net earnings were $152.8 million and diluted earnings per share were $0.98 compared with prior year net earnings of $90.4 million and diluted earnings per share of $0.58.

In the second quarter, the Company’s effective income tax rate was 17.7%.

“Despite anticipated headwinds in the domestic wholesale market, we successfully navigated the challenges and achieved record quarterly sales in addition to a new second quarter earnings record,” stated John Vandemore, Chief Financial Officer of Skechers. “With sustained momentum in our Direct-to-Consumer business globally and broad-based strength in our international wholesale business, aided by healthy inventory levels and an innovative pipeline of comfort technology products, we continued to show the strength of the Skechers brand and to execute our long-term growth strategy.”

Six Months 2023 Financial Results

 

 

Six Months Ended June 30,

Change

(in millions, except per share data)

2023

2022

$

%

Sales

$

4,014.4

 

$

3,687.4

 

327.0

8.9

Gross profit

 

2,039.1

 

 

1,721.7

 

317.4

18.4

Gross margin

 

50.8

%

 

46.7

%

 

410 bps

Operating expenses

 

1,597.8

 

 

1,391.7

 

206.1

14.8

As a % of sales

 

39.8

%

 

37.7

%

 

210 bps

Earnings from operations

 

441.3

 

 

330.1

 

111.2

33.7

Operating margin

 

11.0

%

 

9.0

%

 

200 bps

Net earnings

 

313.2

 

 

211.6

 

101.6

48.0

Diluted earnings per share

$

2.00

 

$

1.35

 

0.65

48.1

Year-to-date sales increased 8.9% reflecting a 19.5% increase in international sales and a 4.7% decrease domestically. Direct-to-Consumer increased 27.1% and Wholesale decreased 1.0%. On a constant currency basis, sales increased 11.1%.

Wholesale sales decreased $24.0 million, or 1.0%, due to a decrease in AMER of 15.9%, partially offset by increases in EMEA of 14.6% and APAC of 19.2%. Wholesale volume decreased 7.3% and average selling price increased 6.6%.

Direct-to-Consumer sales grew $351.0 million, or 27.1%, due to increases in AMER of 28.4%, APAC of 21.7% and EMEA of 40.4%. Direct-to-Consumer volume increased 25.2% and average selling price increased 1.5%.

Gross margin was 50.8%, an increase of 410 basis points, primarily driven by a higher proportion of Direct-to-Consumer sales and higher average selling prices in Wholesale.

Operating expenses increased $206.1 million or 14.8%. As a percentage of sales, operating expenses increased 210 basis points to 39.8%. Selling expenses increased $40.9 million or 14.9%, primarily due to higher global demand creation expenditures. General and administrative expenses increased $165.3 million or 14.8%, primarily driven by labor, increased facility costs, including rent and depreciation, and warehouse and distribution expenses.

Earnings from operations increased $111.2 million to $441.3 million.

Net earnings were $313.2 million and diluted earnings per share were $2.00, an increase of 48.1% over the prior year.

The Company’s effective income tax rate was 18.1%.

Balance Sheet

Cash, cash equivalents and investments totaled $1.07 billion, an increase of $285.4 million, or 36.2% from December 31, 2022, primarily due to an increase in earnings and favorable changes in working capital, offset by capital expenditures of $147.4 million, payments of $70.4 million, net of cash acquired, related to the acquisition of our Scandinavian distributor and the completion of $60.0 million of share repurchases year-to-date.

Inventory was $1.49 billion, a decrease of $332.0 million or 18.3% from December 31, 2022.

Share Repurchase

During the second quarter, the Company repurchased approximately 579,475 shares of its Class A common stock at a cost of $30.0 million. Year-to-date 2023, the Company has repurchased nearly 1.3 million shares of its Class A common stock at a cost of $60.0 million. At June 30, 2023, approximately $365.7 million remained available under the Company’s share repurchase program.

Outlook

For the third quarter of 2023, the Company believes it will achieve sales between $1.95 billion and $2.0 billion and diluted earnings per share of between $0.70 and $0.75. Further, the Company believes that for the fiscal year 2023, it will achieve sales between $7.95 billion and $8.1 billion and diluted earnings per share of between $3.25 and $3.40.

Store Count

 

 

Number of Stores

 

December 31, 2022

Opened (1)

Closed (1)

June 30, 2023

Domestic stores

539

21

(8

)

552

International stores

905

143

(56

)

992

Distributor, licensee and franchise stores

3,093

330

(262

)

3,161

Total Skechers stores

4,537

494

(326

)

4,705

(1) Includes the conversion of 58 third-party stores to International stores previously included in Distributor stores as a result of the acquisition of our Scandinavian distributor.

Second Quarter 2023 Conference Call

The Company will host a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss its second quarter 2023 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 27, 2023, at 7:30 p.m. ET, through August 10, 2023, at 11:59 p.m. ET. To access the replay, dial 844-512-2921 (U.S.) or 412-317-6671 (International) and use passcode: 13739533.

About Skechers U.S.A., Inc.

Skechers U.S.A., Inc., a Fortune 500® 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. Collections from The Comfort Technology Company™ are available in approximately 180 countries and territories through department and specialty stores, and direct to consumers through digital stores, and over 4,700 Company- and third-party-owned physical retail stores. The Company manages its international business through a network of wholly-owned subsidiaries, joint venture partners, and distributors. 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 the Private Securities Litigation Reform Act of 1995, 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,” “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; delays or disruptions in our supply chain; international economic, political and market conditions including the effects of inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail markets in the United States and the impact of Russia’s war with Ukraine; 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, 2022 and its quarterly reports on Form 10-Q in 2023. 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

 

As of

(in thousands)

June 30, 2023

 

December 31, 2022

ASSETS

Current assets

 

 

 

 

 

Cash and cash equivalents

$

896,514

 

 

$

615,733

 

Short-term investments

 

80,648

 

 

 

102,166

 

Trade accounts receivable, net

 

940,201

 

 

 

848,287

 

Other receivables

 

69,307

 

 

 

86,036

 

Inventory

 

1,486,012

 

 

 

1,818,016

 

Prepaid expenses and other

 

197,007

 

 

 

176,035

 

Total current assets

 

3,669,689

 

 

 

3,646,273

 

Property, plant and equipment, net

 

1,417,225

 

 

 

1,345,370

 

Operating lease right-of-use assets

 

1,230,635

 

 

 

1,200,565

 

Deferred tax assets

 

461,021

 

 

 

454,190

 

Long-term investments

 

96,591

 

 

 

70,498

 

Goodwill

 

101,483

 

 

 

93,497

 

Other assets, net

 

131,013

 

 

 

83,094

 

Total non-current assets

 

3,437,968

 

 

 

3,247,214

 

TOTAL ASSETS

$

7,107,657

 

 

$

6,893,487

 

LIABILITIES AND EQUITY

Current liabilities

 

 

 

 

 

Accounts payable

$

802,234

 

 

$

957,384

 

Accrued expenses

 

300,071

 

 

 

294,143

 

Operating lease liabilities

 

261,954

 

 

 

238,694

 

Current installments of long-term borrowings

 

76,388

 

 

 

103,184

 

Short-term borrowings

 

36,654

 

 

 

19,635

 

Total current liabilities

 

1,477,301

 

 

 

1,613,040

 

Long-term operating lease liabilities

 

1,069,384

 

 

 

1,063,672

 

Long-term borrowings

 

236,763

 

 

 

216,488

 

Deferred tax liabilities

 

20,224

 

 

 

8,656

 

Other long-term liabilities

 

112,523

 

 

 

120,045

 

Total non-current liabilities

 

1,438,894

 

 

 

1,408,861

 

Total liabilities

 

2,916,195

 

 

 

3,021,901

 

Stockholders’ equity

 

 

 

 

 

Preferred Stock

 

 

 

 

Class A Common Stock

 

134

 

 

 

134

 

Class B Common Stock

 

20

 

 

 

21

 

Additional paid-in capital

 

362,769

 

 

 

403,799

 

Accumulated other comprehensive loss

 

(87,707

)

 

 

(84,897

)

Retained earnings

 

3,564,133

 

 

 

3,250,931

 

Skechers U.S.A., Inc. equity

 

3,839,349

 

 

 

3,569,988

 

Noncontrolling interests

 

352,113

 

 

 

301,598

 

Total stockholders' equity

 

4,191,462

 

 

 

3,871,586

 

TOTAL LIABILITIES AND EQUITY

$

7,107,657

 

 

$

6,893,487

 

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

Condensed Consolidated Statements of Earnings

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except per share data)

2023

 

2022

 

2023

 

2022

Sales

$

2,012,516

 

$

1,867,804

 

 

$

4,014,444

 

$

3,687,398

 

Cost of sales

 

951,992

 

 

970,225

 

 

 

1,975,341

 

 

1,965,656

 

Gross profit

 

1,060,524

 

 

897,579

 

 

 

2,039,103

 

 

1,721,742

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling

 

187,118

 

 

166,609

 

 

 

315,678

 

 

274,818

 

General and administrative

 

655,673

 

 

576,812

 

 

 

1,282,115

 

 

1,116,862

 

Total operating expenses

 

842,791

 

 

743,421

 

 

 

1,597,793

 

 

1,391,680

 

Earnings from operations

 

217,733

 

 

154,158

 

 

 

441,310

 

 

330,062

 

Other income (expense)

 

2,792

 

 

(19,259

)

 

 

12,715

 

 

(25,005

)

Earnings before income taxes

 

220,525

 

 

134,899

 

 

 

454,025

 

 

305,057

 

Income tax expense

 

38,942

 

 

28,739

 

 

 

82,158

 

 

62,731

 

Net earnings

 

181,583

 

 

106,160

 

 

 

371,867

 

 

242,326

 

Less: Net earnings attributable to noncontrolling interests

 

28,824

 

 

15,756

 

 

 

58,665

 

 

30,699

 

Net earnings attributable to Skechers U.S.A., Inc.

$

152,759

 

$

90,404

 

 

$

313,202

 

$

211,627

 

Net earnings per share attributable to Skechers U.S.A., Inc.

 

 

 

 

 

 

 

 

 

Basic

$

0.99

 

$

0.58

 

 

$

2.02

 

$

1.36

 

Diluted

$

0.98

 

$

0.58

 

 

$

2.00

 

$

1.35

 

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

 

 

 

 

 

 

 

 

 

Basic

 

154,970

 

 

155,941

 

 

 

155,055

 

 

155,969

 

Diluted

 

156,571

 

 

156,748

 

 

 

156,654

 

 

157,074

 

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

Supplemental Financial Information

(Unaudited)

Segment Information

 

 

Three Months Ended June 30,

 

Change

(in millions)

2023

 

2022

 

$

 

%

Wholesale sales

$

1,073.0

 

 

$

1,140.3

 

 

(67.3

)

 

(5.9

)

Gross profit

 

431.5

 

 

 

414.5

 

 

17.0

 

 

4.1

 

Gross margin

 

40.2

%

 

 

36.3

%

 

 

 

 

390 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct-to-Consumer sales

$

939.5

 

 

$

727.5

 

 

212.0

 

 

29.1

 

Gross profit

 

629.0

 

 

 

483.1

 

 

145.9

 

 

30.2

 

Gross margin

 

66.9

%

 

 

66.4

%

 

 

 

 

50 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

2,012.5

 

 

$

1,867.8

 

 

144.7

 

 

7.7

 

Gross profit

 

1,060.5

 

 

 

897.6

 

 

162.9

 

 

18.2

 

Gross margin

 

52.7

%

 

 

48.1

%

 

 

 

 

460 bps

 

 

Six Months Ended June 30,

 

Change

(in millions)

2023

 

2022

 

$

 

%

Wholesale sales

$

2,367.6

 

 

$

2,391.6

 

 

(24.0

)

 

(1.0

)

Gross profit

 

943.5

 

 

 

869.4

 

 

74.1

 

 

8.5

 

Gross margin

 

39.9

%

 

 

36.4

%

 

 

 

 

350 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct-to-Consumer sales

$

1,646.8

 

 

$

1,295.8

 

 

351.0

 

 

27.1

 

Gross profit

 

1,095.6

 

 

 

852.3

 

 

243.3

 

 

28.5

 

Gross margin

 

66.5

%

 

 

65.8

%

 

 

 

 

70 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

4,014.4

 

 

$

3,687.4

 

 

327.0

 

 

8.9

 

Gross profit

 

2,039.1

 

 

 

1,721.7

 

 

317.4

 

 

18.4

 

Gross margin

 

50.8

%

 

 

46.7

%

 

 

 

 

410 bps

 

Additional Sales Information

 

 

Three Months Ended June 30,

 

Change

(in millions)

2023

 

2022

 

$

 

%

Geographic sales

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

Wholesale

$

390.8

 

$

521.0

 

(130.2

)

 

(25.0

)

Direct-to-Consumer

 

411.1

 

 

319.5

 

91.6

 

 

28.7

 

Total domestic sales

 

801.9

 

 

840.5

 

(38.6

)

 

(4.6

)

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

Wholesale

 

682.2

 

 

619.3

 

62.9

 

 

10.2

 

Direct-to-Consumer

 

528.4

 

 

408.0

 

120.4

 

 

29.5

 

Total international sales

 

1,210.6

 

 

1,027.3

 

183.3

 

 

17.9

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

2,012.5

 

$

1,867.8

 

144.7

 

 

7.7

 

 

 

 

 

 

 

 

 

 

 

Regional sales

 

 

 

 

 

 

 

 

 

Americas (AMER)

$

1,027.0

 

$

1,033.9

 

(6.9

)

 

(0.7

)

Europe, Middle East & Africa (EMEA)

 

433.3

 

 

374.5

 

58.8

 

 

15.7

 

Asia Pacific (APAC)

 

552.2

 

 

459.4

 

92.8

 

 

20.2

 

Total sales

$

2,012.5

 

$

1,867.8

 

144.7

 

 

7.7

 

 

 

 

 

 

 

 

 

 

 

China sales

$

302.4

 

$

254.9

 

47.5

 

 

18.6

 

 

 

 

 

 

 

 

 

 

 

Distributor sales

$

99.8

 

$

128.4

 

(28.6

)

 

(22.3

)

 

Six Months Ended June 30,

 

Change

(in millions)

2023

 

2022

 

$

 

%

Geographic sales

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

Wholesale

$

832.7

 

$

1,059.6

 

(226.9

)

 

(21.4

)

Direct-to-Consumer

 

710.0

 

 

559.0

 

151.0

 

 

27.0

 

Total domestic sales

 

1,542.7

 

 

1,618.6

 

(75.9

)

 

(4.7

)

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

Wholesale

 

1,534.9

 

 

1,332.0

 

202.9

 

 

15.2

 

Direct-to-Consumer

 

936.8

 

 

736.8

 

200.0

 

 

27.1

 

Total international sales

 

2,471.7

 

 

2,068.8

 

402.9

 

 

19.5

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

4,014.4

 

$

3,687.4

 

327.0

 

 

8.9

 

 

 

 

 

 

 

 

 

 

 

Regional sales

 

 

 

 

 

 

 

 

 

Americas (AMER)

$

1,972.9

 

$

1,980.8

 

(7.9

)

 

(0.4

)

Europe, Middle East & Africa (EMEA)

 

967.8

 

 

815.7

 

152.1

 

 

18.6

 

Asia Pacific (APAC)

 

1,073.7

 

 

890.9

 

182.8

 

 

20.5

 

Total sales

$

4,014.4

 

$

3,687.4

 

327.0

 

 

8.9

 

 

 

 

 

 

 

 

 

 

 

China sales

$

584.4

 

$

527.9

 

56.5

 

 

10.7

 

 

 

 

 

 

 

 

 

 

 

Distributor sales

$

203.8

 

$

225.4

 

(21.6

)

 

(9.6

)

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

Reconciliation of GAAP Earnings Financial Measures to Corresponding Non-GAAP Financial Measures

(Unaudited)

 

Constant Currency Adjustment (Non-GAAP Financial Measure)

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,

 

2023

 

2022

 

Change

(in millions, except per share data)

Reported GAAP Measure

 

Constant Currency Adjustment

 

Adjusted for Non-GAAP Measures

 

Reported GAAP Measure

 

$

 

%

Sales

$

2,012.5

 

$

24.6

 

 

$

2,037.1

 

 

$

1,867.8

 

 

169.3

 

 

9.1

 

Cost of sales

 

952.0

 

 

9.6

 

 

 

961.6

 

 

 

970.2

 

 

(8.6

)

 

(0.9

)

Gross profit

 

1,060.5

 

 

15.0

 

 

 

1,075.5

 

 

 

897.6

 

 

177.9

 

 

19.8

 

Operating expenses

 

842.8

 

 

9.3

 

 

 

852.1

 

 

 

743.4

 

 

108.7

 

 

14.6

 

Earnings from operations

 

217.7

 

 

5.7

 

 

 

223.4

 

 

 

154.2

 

 

69.2

 

 

44.9

 

Other income (expense)

 

2.8

 

 

(4.4

)

 

 

(1.6

)

 

 

(19.3

)

 

17.7

 

 

(91.7

)

Income tax expense

 

38.9

 

 

1.1

 

 

 

40.0

 

 

 

28.7

 

 

11.3

 

 

39.4

 

Less: Noncontrolling interests

 

28.8

 

 

1.5

 

 

 

30.3

 

 

 

15.8

 

 

14.5

 

 

91.8

 

Net earnings

$

152.8

 

$

(1.3

)

 

$

151.5

 

 

$

90.4

 

 

61.1

 

 

67.6

 

Diluted earnings per share

$

0.98

 

$

(0.01

)

 

$

0.97

 

 

$

0.58

 

 

0.39

 

 

67.2

 

 

Six Months Ended June 30,

 

2023

 

2022

 

Change

(in millions, except per share data)

Reported GAAP Measure

 

Constant Currency Adjustment

 

Adjusted for Non-GAAP Measures

 

Reported GAAP Measure

 

$

 

%

Sales

$

4,014.4

 

$

83.9

 

 

$

4,098.3

 

 

$

3,687.4

 

 

410.9

 

11.1

 

Cost of sales

 

1,975.3

 

 

44.1

 

 

 

2,019.4

 

 

 

1,965.7

 

 

53.7

 

2.7

 

Gross profit

 

2,039.1

 

 

39.8

 

 

 

2,078.9

 

 

 

1,721.7

 

 

357.2

 

20.7

 

Operating expenses

 

1,597.8

 

 

27.4

 

 

 

1,625.2

 

 

 

1,391.7

 

 

233.5

 

16.8

 

Earnings from operations

 

441.3

 

 

12.4

 

 

 

453.7

 

 

 

330.1

 

 

123.6

 

37.4

 

Other income (expense)

 

12.8

 

 

(17.3

)

 

 

(4.5

)

 

 

(25.1

)

 

20.6

 

(82.1

)

Income tax expense

 

82.2

 

 

2.4

 

 

 

84.6

 

 

 

62.7

 

 

21.9

 

34.9

 

Less: Noncontrolling interests

 

58.7

 

 

3.2

 

 

 

61.9

 

 

 

30.7

 

 

31.2

 

101.6

 

Net earnings

$

313.2

 

$

(10.5

)

 

$

302.7

 

 

$

211.6

 

 

91.1

 

43.1

 

Diluted earnings per share

$

2.00

 

$

(0.07

)

 

$

1.93

 

 

$

1.35

 

 

0.58

 

43.0

 

 

Investor Relations
Eunice Han
investors@skechers.com

Press
Jennifer Clay
jennc@skechers.com

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