Skechers Beats Zacks Consensus

Skechers USA Inc. (SKX: 30.00 -0.09 -0.30%), the designer, marketer and distributor of footwear, recently reported fourth-quarter 2009 financial results that topped the Zacks Consensus Estimate.
 
Skechers’ quarterly earnings of 58 cents a share surpassed the Zacks Consensus Estimate of 52 cents, and improved substantially from a net loss of 44 cents delivered in the prior-year quarter. Robust sales growth and effective cost management drove the bottom-line.
 
The quarterly earnings outdid the Zacks Consensus Estimate by 11.5%. Earnings for the second and third quarters in 2009 had outperformed the Zacks Consensus Estimate by 52.9% and 18.8%, respectively. The current Zacks Consensus Estimate for first-quarter 2010 is 82 cents.
 
Net sales for the quarter soared 30.4% year-over-year to $388.6 million driven by growth registered across wholesale, retail and online businesses.
 
The sustained focus on new lines of products, opening of additional Skechers retail stores and distribution channels, and the development of new international distribution agreements in India and Mexico, should increase sales and profitability.
 
The international wholesale business rose by 8% during the quarter, whereas the domestic wholesale business surged 38%. Total domestic and international retail sales climbed 31% with a 17.4% rise in retail same-store sales.
 
Gross profit nearly doubled to $189.3 million, whereas the gross profit margin expanded to 48.7% from 31.9% in the prior-year quarter, driven by fewer store closures, prudent inventory management, and increase in price. Cost of sales dropped 1.8% to $199.4 million.
 
Based on higher sales, increased retail same-store sales, and growing operations in Brazil, China, Hong Kong and Chile, Skechers remains on track to deliver positive results in fiscal 2010.
 
During the quarter, Skechers opened 2 retail stores, and plans to open 5 in first-quarter 2010. At the end of the quarter under review, there were 246 company-owned retail stores. During fiscal year 2009, Skechers added 22 retail stores, and plans to open 25 to 30 stores in fiscal 2010.
 
The company also opened 13 distributor-owned or licensed Skechers retail stores during the quarter. At the end of the quarter, there were 112 distributor-owned or licensed retail stores.
 
Skechers ended the quarter with cash and cash equivalents of $265.7 million with a total long-term debt of $16.2 million and shareholders’ equity of $745.9 million. Capital expenditures were nearly $4.1 million for the quarter and $35.3 million for the year. Management expects capital expenditure for fiscal year 2010 in the range of $15 million to $20 million.