Skechers Returns to Profit, Beats ExpectationsWednesday, July 24, 2013
Skechers USA Inc. on Wednesday said that it moved from a loss to a profit in the second quarter, boosted by higher margins and double-digit percentage sales gains in its international wholesale business and at company-owned retail stores.
After the markets closed, the Manhattan Beach maker of casual and athletic shoes reported net income of $7 million (14 cents a share), compared with a net loss of $1.8 million (-4 cents) in the same period a year earlier.
Revenue rose 11 percent to $428 million. In addition to improvement in retail and overseas wholesale sales, Skechers cited single-digit gains at its domestic wholesale division.
Analysts surveyed by Thomson Reuters on averaged had expected earnings of 3 cents a share on revenue of less than $428 million.
This is the fourth straight quarter that Skechers has reported a profit. The company struggled to recover from problems with its once-hot Shape-ups toning shoe line, which faced criticism over marketing claims that its use would help wearers lose weight and tone muscles. The company recently began sending out $40 million in checks to purchasers as part of a settlement it made last year with the Federal Trade Commission.
Chief Executive Robert Greenberg credited the company’s performance to a more diversified balance of products. As the company began cutting its losses from the toning shoe two years ago, Skechers also revamped and updated its lines, with a new athletic-casual shoe called the Relaxed Fit now performing well.
“The positive feedback we have received … is unlike any we have previously experienced,” Greenberg said in a statement. "We believe the momentum we are experiencing will continue through this year and into next year.”
Skechers shares, which earlier closed down 33 cents, or 1 percent, to $26.65 on the New York Stock Exchange, rose 3 percent in after-hours trading.