Skechers U.S.A., Inc. (NYSE:SKX) Q4 2019 Results Earnings Conference Call February 6, 2020 4:30 AM ET Company Participants David Weinberg - EVP, COO John Vandemore - CFO Conference Call Participants Jay Sole - UBS Christopher Svezia - Wedbush Securities John Kernan - Cowen & Company Gabriella Carbone - Deutsche Bank Omar Saad - Evercore ISI Sam Poser - Susquehanna Financial Group Kimberly Greenberger - Morgan Stanley Susan Anderson - B. Riley FBR Jim Duffy - Stifel Tom Nikic - Wells Fargo Operator Greetings ...

Skechers USA, Inc. (NYSE:SKX) Q3 2019 Earnings Conference Call October 22, 2019 4:30 PM ET Company Participants David Weinberg - EVP, COO & Director John Vandemore - CFO Brian Goldner - Chairman & CEO Robert Greenberg - Co-Founder, Chairman & CEO Conference Call Participants Jay Sole - UBS Investment Bank Laurent Vasilescu - Macquarie Research Omar Saad - Evercore ISI Christopher Svezia - Wedbush Securities Tom Nikic - Wells Fargo Securities Samuel Poser - Susquehanna Financial Group Susan Anderson - B. Ril ...

Financial Data and Key Metrics Changes - The company reported record sales of $1.26 billion for Q2 2019, an increase of 10.9% or 13.7% on a constant-currency basis [7][18] - Earnings per share increased by 69% to $0.49 compared to the previous year [7][22] - Gross profit was $609.8 million, with a gross margin of 48.5%, down 100 basis points from the prior year [20] - Operating income rose by 36.5% to $111.1 million, with an operating margin improvement of 170 basis points to 8.8% [22] Business Line Data and Key Metrics Changes - Domestic sales increased by 1.5%, driven by an 8.6% increase in direct-to-consumer business, including a 36.1% increase in e-commerce [11][12] - International sales grew by 19.8%, representing 55.7% of total sales, with significant contributions from the UAE, Australia, and India [14][18] - Direct-to-consumer sales increased by 14.4%, with a 25.8% increase internationally [19] Market Data and Key Metrics Changes - The domestic wholesale business experienced a decline of 3.8%, but is expected to be flat to slightly positive for the year [12][20] - International wholesale sales increased by 18.2%, with a 30.7% increase in distributor business [18][19] - Comparable store sales increased by 4.9%, with e-commerce sales growth of 34.3% [19] Company Strategy and Development Direction - The company aims to continue its aggressive growth in international and direct-to-consumer businesses while investing responsibly for future growth [18][28] - There is a focus on global marketing efforts and simultaneous product introductions to replicate success across markets [8][9] - The company plans to open 250 to 300 new stores in 2019, with international markets identified as primary growth drivers [17][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued momentum for the second half of 2019, supported by strong consumer demand and brand perception [6][28] - The company anticipates double-digit growth for the year, driven by international expansion and direct-to-consumer sales [17][28] - Management noted that the domestic wholesale business is expected to improve in the latter half of the year [42] Other Important Information - The company has $973 million in cash and investments, a decrease of 8.7% from the end of 2018 [24] - Capital expenditures for Q2 were approximately $86.2 million, with expectations of $150 to $175 million for the remainder of 2019 [26] Q&A Session Summary Question: Guidance on gross margin for Q3 - Management expects gross margin to be relatively flat year-over-year, with discounting in international markets being a temporary issue [30][31] Question: Insights on SG&A growth - SG&A growth has moderated, with efficiency improvements noted across various areas, particularly in international markets [70][71] Question: U.S. wholesale business outlook - Management sees improving trends in the U.S. wholesale business, with expectations for positive growth in Q3 and Q4 [40][42] Question: Performance of SKECHERS Street line - The SKECHERS Street line is performing well across multiple regions, contributing to overall growth [64][69]

Financial Data and Key Metrics Changes - The company achieved a new quarterly sales record of $1.28 billion, a 2.1% increase over the first quarter of the previous year, with constant currency sales growth of 5.2% [6][17] - Earnings from operations increased by 11.5% to $165.9 million, with an operating margin improvement to 13% from 11.9% [7][20] - Diluted earnings per share were $0.71, down from $0.75 in the prior year [21] - Gross profit was $590.5 million, with a slight decrease in gross margin to 46.3% due to lower international margins and negative foreign exchange rates [19][20] Business Line Data and Key Metrics Changes - Domestic business decreased by 6.3%, with a 3.3% increase in direct-to-consumer sales, including a 35.3% increase in domestic e-commerce [8][18] - International sales increased by 9.3%, representing 57.8% of total sales, with a 15% growth on a constant currency basis [6][11] - Domestic wholesale gross margins remained flat, while domestic retail margins increased by 260 basis points due to improved pricing and reduced promotional activity [9][19] Market Data and Key Metrics Changes - The company maintained its position as the number one brand in several categories in the U.S. market, including walking and work shoes [9] - Internationally, significant sales growth was noted in Germany, Spain, India, and Japan, with China being the largest market with approximately 1.1 million pairs shipped [11][12] Company Strategy and Development Direction - The company is focusing on expanding its international presence, with plans to open over 400 Skechers branded stores in 2019, including 30 to 35 company-owned stores [14][15] - The conversion of the India joint venture into a subsidiary is expected to be accretive to earnings, and a new joint venture in Mexico is anticipated to drive growth [8][15] - The company aims to continue delivering relevant products with targeted marketing globally while driving profitability [8][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the domestic wholesale business remaining flat for the full year, citing positive feedback from core customers and a clean inventory position [32][34] - The company expects international and direct-to-consumer businesses to continue growing steadily, with a cautious optimism regarding the domestic retail market [72][74] - Management noted that foreign exchange rates are a significant headwind but anticipate potential benefits if trade disputes are resolved [60][63] Other Important Information - The company repurchased approximately 458,000 shares of common stock at an average price of $32.77 per share [22] - The adoption of the new lease accounting standard resulted in the recognition of a right of use asset of $970.4 million and an operating lease liability of $1.05 billion [23] Q&A Session Summary Question: Confidence in Domestic Wholesale Business - Management expressed confidence in the domestic wholesale business being flat for the year, citing positive reception to new products and a positive backlog from core customers [32][34] Question: SG&A Levels and Growth - SG&A is expected to align with top-line growth, with a focus on managing expenses effectively while supporting growth initiatives [35][37] Question: FX Impact on Gross Margin - The FX impact on gross margin was between 10 and 20 basis points, with a significant swing in balance sheet translation affecting EPS [40][41] Question: Non-Skechers Inventory Levels - Management believes that bankruptcies in the retail sector will facilitate market share gains, and current inventory levels are clean and well-managed [44][46] Question: Domestic Wholesale Business Drivers - The domestic wholesale business faced headwinds due to the Easter shift and increased discounting, but core customer performance remains positive [52][53] Question: Growth Potential in China - China continues to be a strong market, with growth rates impacted by foreign exchange, but underlying growth remains robust [60][63]

Skechers USA Inc. (NYSE:SKX) Q4 2018 Earnings Conference Call February 7, 2019 4:30 PM ET Company Participants David Weinberg - Chief Operating Officer John Vandemore - Chief Financial Officer Conference Call Participants Laurent Vasilescu - Macquarie Group John Kernan - Cowen & Co Lauren Cassel - Morgan Stanley Jay Sole - UBS Jim Duffy - Stifel Sam Poser - Susquehanna Jeff Van Sinderen - B. Riley FBR Chris Svezia - Wedbush Tom Nikic - Wells Fargo Operator Greetings and welcome to the SKECHERS Fourth Quarte ...