Acquisition Details - 3G Capital has finalized the acquisition of Skechers, taking the footwear company private with a deal valued at $9.42 billion [1] - The acquisition price is set at $63.00 per share in cash for all outstanding shares of Skechers [1] - Shareholders have the option to receive $57.00 in cash and one "unlisted, non-transferable equity unit" in a new privately held entity [2] Management and Operations - Skechers will continue to be led by its executive management team, including CEO Robert Greenberg and president Michael Greenberg [2] - The company will remain based in Manhattan Beach, California [2] Business Performance - In the first quarter of fiscal year 2025, Skechers reported sales of $2.41 billion, reflecting a 7.1% increase from the same quarter a year ago [4] - Gross profit for the quarter was $1.25 billion, marking a 6.2% growth from the previous year, although gross margin contracted by 50 basis points to 52.0% due to lower average selling prices [4] Strategic Focus - Skechers plans to sustain its focus on product innovation, international expansion, direct-to-consumer channels, domestic wholesale growth, and investments in global distribution and technology infrastructure [3]

Core Viewpoint - 3G Capital has successfully completed the acquisition of Skechers, marking a significant move in the footwear industry [1] Company Summary - The acquisition by 3G Capital is expected to enhance Skechers' market position and operational efficiency [1] - Skechers is recognized for its innovative footwear designs and strong brand presence, which aligns with 3G Capital's investment strategy [1] Industry Summary - The footwear industry continues to see consolidation as companies seek to strengthen their competitive edge through strategic acquisitions [1] - This acquisition reflects ongoing trends in the industry where investment firms are targeting established brands with growth potential [1]

Core Insights - Skechers has been recognized as a top company by both Newsweek and Time magazines, highlighting its strong brand reputation and market presence [1] Company Summary - The recognition from Newsweek and Time magazines underscores Skechers' commitment to quality and innovation in the footwear industry [1] - This accolade may enhance Skechers' visibility and attractiveness to potential investors and consumers alike [1] Industry Summary - The footwear industry continues to evolve, with brands like Skechers leading the way in terms of consumer recognition and brand loyalty [1] - The acknowledgment from reputable publications reflects broader trends in consumer preferences towards brands that prioritize quality and sustainability [1]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Skechers (SKX) as a strong value stock based on various financial metrics [2][7]. Group 1: Value Investing - Value investing is a preferred strategy for identifying strong stocks across different market conditions, utilizing various valuation metrics [2]. - Zacks has developed the Style Scores system to identify stocks with specific traits, particularly those with high grades in the "Value" category [3]. Group 2: Skechers (SKX) Financial Metrics - Skechers (SKX) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4]. - The stock has a P/E ratio of 16.37, significantly lower than the industry average of 30.45, suggesting it may be undervalued [4]. - SKX's PEG ratio stands at 0.78, compared to the industry's average of 1.78, indicating favorable growth expectations relative to its price [5]. - The P/CF ratio for SKX is 10.78, well below the industry average of 26.33, further supporting the notion of undervaluation [6]. - Overall, the financial metrics suggest that Skechers is likely undervalued and stands out as one of the strongest value stocks in the market [7].

Core Insights - The performance of Skechers' international operations is crucial for understanding its financial strength and growth potential, especially given its extensive global presence [1][2][3] Revenue Performance - Skechers reported total revenue of $2.44 billion for the quarter, marking a 13.1% year-over-year increase [4] - International revenues from Europe, Middle East & Africa reached $731.5 million, accounting for 30% of total revenue, exceeding Wall Street's expectations by 25.96% [5] - Asia Pacific contributed $595.5 million, representing 24.4% of total revenue, also surpassing analyst predictions by 3.87% [6] Future Projections - Analysts project total revenue for the current fiscal quarter to be $2.53 billion, reflecting a 7.7% increase from the same quarter last year, with Europe, Middle East & Africa expected to contribute $720.5 million and Asia Pacific $584.48 million [7] - For the full year, total revenue is projected at $9.67 billion, indicating a 7.8% rise from the previous year, with Europe, Middle East & Africa expected to account for $2.59 billion and Asia Pacific for $2.42 billion [8] Market Dynamics - The reliance on international markets presents both opportunities and challenges for Skechers, making the analysis of international revenue trends essential for forecasting future performance [9] - Wall Street analysts are closely monitoring these trends, particularly in light of increasing global interconnections and geopolitical tensions [10]

分组1 - Skechers reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, and showing an increase from $0.91 per share a year ago, resulting in an earnings surprise of +36.14% [1] - The company achieved revenues of $2.44 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.50%, and up from $2.16 billion year-over-year [2] - Over the last four quarters, Skechers has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] 分组2 - The stock has underperformed the market, losing about 6.3% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The current consensus EPS estimate for the coming quarter is $0.93 on revenues of $2.53 billion, and for the current fiscal year, it is $3.65 on revenues of $9.67 billion [7] - The Zacks Industry Rank for Shoes and Retail Apparel is currently in the bottom 30% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Core Insights - Skechers reported Q2 2025 GAAP revenue of $2.44 billion, a 13.1% increase year-over-year, exceeding analyst estimates [1][5] - Non-GAAP revenue reached $2,410 million, surpassing the estimate of $2,351.54 million, with non-GAAP earnings per share matching expectations at $0.83 [1][2] - The company experienced declining margins, with gross margin falling to 53.3% from 54.9% and operating margin decreasing to 7.1% from 9.6% year-over-year [1][7] Financial Performance - Net earnings attributable to Skechers U.S.A. increased by 21.5% to $170.5 million compared to $140.3 million in Q2 2024 [2] - International sales rose by 22.0%, with the Europe, Middle East, and Africa region showing a notable 48.5% increase to $731.5 million [5] - Domestic sales remained stable, with wholesale down 7.5% to $413.3 million, while Direct-to-Consumer sales rose 7.6% to $448.8 million [6] Business Overview - Skechers designs and markets a variety of footwear and apparel, focusing on comfort and innovation, with proprietary technologies like Hands Free Slip-ins and Arch Fit insoles [3][4] - The company has been expanding its international presence and direct-to-consumer channels, emphasizing comfort-based technologies and brand marketing [4] Operational Developments - Operating expenses increased by 15.4%, leading to operating costs rising to 46.2% of sales, driven by higher brand marketing and distribution expansion costs [8] - The impact of foreign currency movements positively affected reported results, contributing $33.9 million to sales and $0.30 to diluted earnings per share [8] Future Outlook - Management did not provide specific financial guidance due to uncertainties in global trade dynamics and consumer behavior [10] - Key issues for investors include managing margin pressure, the impact of new tariffs, and the ongoing sales slump in China [11]

PART I [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q2 2025 financial statements show strong asset growth, record sales, and increased net income, with notable merger-related costs [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$9.28 billion** by June 30, 2025, driven by cash, with liabilities at **$3.90 billion** and equity at **$5.27 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $4,851,711 | $4,449,423 | | Cash and cash equivalents | $1,377,152 | $1,116,516 | | Inventory | $1,871,805 | $1,919,386 | | **Total Assets** | **$9,278,116** | **$8,455,758** | | **Total Current Liabilities** | $2,315,937 | $2,256,484 | | **Total Liabilities** | **$3,902,607** | **$3,635,494** | | **Total Stockholders' Equity** | **$5,273,135** | **$4,730,165** | [Condensed Consolidated Statements of Earnings](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Q2 2025 sales grew 13.1% to **$2.44 billion**, with net earnings at **$170.5 million** and diluted EPS at **$1.13**, reflecting strong performance Q2 2025 vs Q2 2024 Earnings (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $2,440,024 | $2,157,643 | 13.1% | | Gross Profit | $1,301,303 | $1,184,437 | 9.9% | | Earnings from Operations | $173,082 | $206,531 | (16.2)% | | Net Earnings Attributable to Skechers | $170,498 | $140,302 | 21.5% | | Diluted EPS | $1.13 | $0.91 | 24.2% | Six Months 2025 vs 2024 Earnings (in thousands, except per share data) | Metric | Six Months 2025 | Six Months 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $4,851,595 | $4,409,230 | 10.0% | | Gross Profit | $2,555,677 | $2,366,071 | 8.0% | | Earnings from Operations | $438,207 | $505,329 | (13.3)% | | Net Earnings Attributable to Skechers | $372,934 | $346,924 | 7.5% | | Diluted EPS | $2.46 | $2.24 | 9.8% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six-month operating cash flow was **$448.2 million**, with **$315.0 million** used in investing and **$100.1 million** provided by financing, a shift from prior year Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $448,178 | $494,432 | | Net cash used in investing activities | ($314,958) | ($240,436) | | Net cash provided by (used in) financing activities | $100,132 | ($163,718) | | **Net change in cash and cash equivalents** | **$260,636** | **$90,520** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include a proposed merger with **$9.3 million** in Q2 transaction costs, growth across all segments, no share repurchases, and a reduced effective tax rate of **16.4%** - On May 4, 2025, the Company entered into a Merger Agreement with Beach Acquisition Co Parent, LLC. The company recognized **$9.3 million** in transaction costs related to the merger in Q2 2025[25](index=25&type=chunk)[29](index=29&type=chunk) - The company's joint ventures in China, Israel, South Korea, Mexico, and Southeast Asia are considered variable interest entities (VIEs) and are consolidated in the financial statements[31](index=31&type=chunk) - As of June 30, 2025, the company had **$584.3 million** in outstanding borrowings, including amounts under its corporate revolving credit facility and various loans for distribution centers[121](index=121&type=chunk) - No shares were repurchased during the six months ended June 30, 2025. The company had **$789.9 million** remaining under its share repurchase program as of June 30, 2025[55](index=55&type=chunk)[56](index=56&type=chunk) - The effective tax rate for Q2 2025 was **16.4%**, a decrease from **19.7%** in Q2 2024, primarily due to lower earnings in higher tax jurisdictions[64](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported record Q2 sales of **$2.44 billion**, up 13.1%, driven by international growth, despite gross margin decline and increased operating expenses [Overview](index=25&type=section&id=Overview) The company achieved record Q2 2025 sales of **$2.44 billion**, up 13.1%, with broad-based growth, targeting **$10 billion** annual sales by 2026 Q2 2025 Key Highlights | Metric | Value | Note | | :--- | :--- | :--- | | Sales | $2.44 billion | Record quarterly sales, +13.1% YoY | | Gross Margin | 53.3% | - | | Segment Growth | Positive | Increased sales in both Wholesale and DTC | | Regional Growth | Positive | Increased sales in EMEA, APAC, and Americas | | Diluted EPS | $1.13 | - | - The company is focused on building efficiencies to scale for profitable growth and is confident in its goal of reaching **$10 billion** in annual sales by 2026[87](index=87&type=chunk) [Results of Operations – Second Quarter](index=25&type=section&id=Results%20of%20Operations%20%E2%80%93%20Second%20Quarter) Q2 2025 sales grew 13.1% to **$2.44 billion**, driven by international business, though gross margin declined to **53.3%** and operating expenses increased 15.4% - Sales increased **13.1%** due to a **22.0%** increase internationally, with Wholesale up **15.0%** and Direct-to-Consumer up **11.0%**[91](index=91&type=chunk) - Gross margin declined **160 bps** to **53.3%** due to higher costs per unit, driven by higher domestic duties from increased tariff rates[92](index=92&type=chunk) - Operating expenses increased **15.4%**, driven by higher labor costs (**$53.4 million**), facility costs (**$28.3 million**), and distribution costs (**$24.9 million**)[93](index=93&type=chunk) - The effective tax rate decreased to **16.4%** from **19.7%** in the prior year, due to lower earnings in higher tax jurisdictions[95](index=95&type=chunk) [Results of Segment Operations – Second Quarter](index=26&type=section&id=Results%20of%20Segment%20Operations%20%E2%80%93%20Second%20Quarter) Q2 2025 Wholesale sales grew 15.0% to **$1.3 billion**, with gross margin at **41.4%**, while Direct-to-Consumer sales rose 11.0% to **$1.1 billion** with stable gross margin Q2 2025 Wholesale Segment Performance | Metric | Value | Change vs Q2 2024 | | :--- | :--- | :--- | | Sales | $1.30 billion | +15.0% | | Gross Profit | $538.4 million | +8.3% | | Gross Margin | 41.4% | -250 bps | - Wholesale growth was driven by increases in EMEA (**+58.7%**) and APAC (**+4.0%**), partially offset by a decrease in the Americas (**-5.9%**)[99](index=99&type=chunk) Q2 2025 Direct-to-Consumer Segment Performance | Metric | Value | Change vs Q2 2024 | | :--- | :--- | :--- | | Sales | $1.14 billion | +11.0% | | Gross Profit | $762.9 million | +11.0% | | Gross Margin | 67.0% | 0 bps | - Direct-to-Consumer growth was driven by increases in the Americas (**+8.6%**), EMEA (**+27.8%**), and APAC (**+6.6%**)[100](index=100&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$1.38 billion** cash and **$614.1 million** unused credit, with working capital at **$2.5 billion**, and **$330.7 million** in capital expenditures - As of June 30, 2025, the company had cash and cash equivalents of **$1,377.2 million**, with **95.0%** held outside the U.S[113](index=113&type=chunk) - Working capital was **$2.5 billion**, an increase of **$342.8 million** from December 31, 2024[115](index=115&type=chunk) - Capital expenditures for the first six months of 2025 were **$330.7 million**, primarily for global distribution expansion and retail investments[118](index=118&type=chunk) - Financing activities provided **$100.1 million** in cash, a **$263.9 million** positive swing from the prior year, mainly due to increased borrowings and no share repurchases[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures were reported from the information previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes from the market risk information previously reported in the 2024 Annual Report on Form 10-K[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of Q2 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[124](index=124&type=chunk) - There were no material changes in internal control over financial reporting during the second quarter of 2025[125](index=125&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company faces new patent infringement lawsuits from Kizik and shareholder litigation regarding the proposed merger, alongside ongoing patent disputes with Nike - On July 24, 2025, Kizik filed a patent infringement lawsuit against the company concerning Skechers Slip-ins shoes[126](index=126&type=chunk) - A shareholder lawsuit (Key West Action) was filed on May 29, 2025, related to the proposed merger, seeking to enjoin the transaction pending further disclosures. A motion for a preliminary injunction was denied[127](index=127&type=chunk) - Litigation with Nike, Inc. regarding alleged infringement of six utility patents is resuming after a stay was lifted by the District Court[128](index=128&type=chunk)[129](index=129&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) New risks from the pending merger include potential adverse effects on business, stock price, and relationships, with uncertainty regarding timely completion and interim restrictive covenants - The announcement and pendency of the merger with Beach Acquisition Co Parent, LLC may adversely affect business, operating results, stock price, and relationships with employees, customers, and suppliers[132](index=132&type=chunk) - Completion of the merger is subject to conditions, including regulatory approvals, and may not be completed on a timely basis or at all. Failure to complete the merger could negatively affect the company's stock price and business[133](index=133&type=chunk)[136](index=136&type=chunk) - The company will incur substantial direct and indirect costs related to the merger, regardless of whether it is consummated[138](index=138&type=chunk) - During the pending merger, the company is subject to contractual restrictions that could limit its ability to respond to competitive pressures and business opportunities[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any Class A Common Stock in Q2 2025, with **$789.9 million** remaining available under the share repurchase program expiring July 2027 Share Repurchase Activity (Q2 2025) | Month Ended | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 30, 2025 | — | $ — | | May 31, 2025 | — | $ — | | June 30, 2025 | — | $ — | | **Total** | **—** | **$ —** | - As of June 30, 2025, **$789.9 million** remained available for repurchase under the company's share repurchase program[147](index=147&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The Board adopted a U.S. Employee Change in Control Severance Plan on August 7, 2025, providing benefits to eligible employees terminated post-merger - On August 7, 2025, the company's Board of Directors adopted a U.S. Employee Change in Control Severance Plan[150](index=150&type=chunk) - The plan provides severance benefits to eligible U.S. employees whose employment is terminated without 'cause' or for 'good reason' within 12 months following the closing of the merger[150](index=150&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Merger Agreement, corporate governance documents, and CEO/CFO certifications [Signatures](index=42&type=section&id=Signatures) The report is duly signed on August 8, 2025, by John Vandemore, Chief Financial Officer of Skechers U.S.A., Inc

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Skechers reported strong top-line growth in the second quarter of 2025, with sales increasing 13.1% year-over-year to $2.44 billion, while profitability was impacted by higher operating expenses Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $2,440.0M | $2,157.6M | 13.1% | | Gross Profit | $1,301.3M | $1,184.4M | 9.9% | | Gross Margin | 53.3% | 54.9% | (160) bps | | Earnings from Operations | $173.1M | $206.5M | (16.2)% | | Operating Margin | 7.1% | 9.6% | (250) bps | | Net Earnings | $170.5M | $140.3M | 21.5% | | Diluted EPS | $1.13 | $0.91 | 24.2% | - Sales growth was positively impacted by foreign currency exchange rates, which contributed **$33.9 million**[6](index=6&type=chunk) - On a constant currency basis, sales grew **11.5%**[6](index=6&type=chunk) - Growth was observed across both major sales channels: **Wholesale Sales** grew **15.0%**, and **Direct-to-Consumer Sales** grew **11.0%**[6](index=6&type=chunk) [First Half 2025 Financial Results](index=1&type=section&id=Six%20Months%202025%20Financial%20Results) For the first six months of 2025, Skechers achieved sales of $4.85 billion, a 10.0% increase, but experienced margin contraction similar to the quarterly results H1 2025 Financial Highlights (vs. H1 2024) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $4,851.6M | $4,409.2M | 10.0% | | Gross Profit | $2,555.7M | $2,366.1M | 8.0% | | Gross Margin | 52.7% | 53.7% | (100) bps | | Earnings from Operations | $438.2M | $505.3M | (13.3)% | | Operating Margin | 9.0% | 11.5% | (240) bps | | Net Earnings | $372.9M | $346.9M | 7.5% | | Diluted EPS | $2.46 | $2.24 | 9.8% | [Segment and Geographic Performance](index=5&type=section&id=Segment%20and%20Geographic%20Performance) [Performance by Sales Channel](index=5&type=section&id=Performance%20by%20Sales%20Channel) In Q2 2025, both sales channels demonstrated growth, with Wholesale sales increasing by 15.0% and Direct-to-Consumer (DTC) sales growing 11.0%, though Wholesale gross margin compressed Q2 2025 Sales Channel Performance (vs. Q2 2024) | Channel | Sales | Growth (%) | Gross Margin | Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Wholesale | $1,301.4M | 15.0% | 41.4% | (250) bps | | Direct-to-Consumer | $1,138.6M | 11.0% | 67.0% | 0 bps | H1 2025 Sales Channel Performance (vs. H1 2024) | Channel | Sales | Growth (%) | Gross Margin | Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Wholesale | $2,833.6M | 11.0% | 42.8% | (150) bps | | Direct-to-Consumer | $2,018.0M | 8.8% | 66.5% | 0 bps | [Performance by Geography](index=6&type=section&id=Performance%20by%20Geography) International markets, particularly EMEA, drove Q2 2025 growth with a 22.0% surge, while domestic sales were nearly flat and China experienced a downturn Q2 2025 Geographic Sales (vs. Q2 2024) | Geography | Sales | Growth (%) | | :--- | :--- | :--- | | **Domestic** | **$862.1M** | **(0.2)%** | | Wholesale | $413.3M | (7.5)% | | Direct-to-Consumer | $448.8M | 7.6% | | **International** | **$1,577.9M** | **22.0%** | | Wholesale | $888.1M | 29.6% | | Direct-to-Consumer | $689.8M | 13.3% | Q2 2025 Regional Sales (vs. Q2 2024) | Region | Sales | Growth (%) | | :--- | :--- | :--- | | Americas (AMER) | $1,113.0M | 1.1% | | EMEA | $731.5M | 48.5% | | Asia Pacific (APAC) | $595.5M | 5.5% | | **China (included in APAC)** | **$287.2M** | **(8.2)%** | [Financial Statements](index=3&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Skechers reported a healthy balance sheet with total assets of $9.28 billion, increased cash, and slightly decreased inventory Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$4,851,711** | **$4,449,423** | | Cash and cash equivalents | $1,377,152 | $1,116,516 | | Inventory | $1,871,805 | $1,919,386 | | **Total Assets** | **$9,278,116** | **$8,455,758** | | **Total Current Liabilities** | **$2,315,937** | **$2,256,484** | | **Total Liabilities** | **$3,902,607** | **$3,635,494** | | **Total Stockholders' Equity** | **$5,273,135** | **$4,730,165** | [Condensed Consolidated Statements of Earnings](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) The Q2 2025 income statement shows total sales of $2.44 billion, with increased operating expenses leading to lower earnings from operations, partially offset by significant other income Q2 2025 Statement of Earnings (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $2,440,024 | $2,157,643 | | Gross Profit | $1,301,303 | $1,184,437 | | Total Operating Expenses | $1,128,221 | $977,906 | | Earnings from Operations | $173,082 | $206,531 | | Other Income (Expense) | $45,517 | $(1,652) | | Net Earnings | $182,705 | $164,524 | | Net Earnings Attributable to Skechers | $170,498 | $140,302 | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of GAAP to Constant Currency Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Constant%20Currency%20Measures) Skechers provides non-GAAP constant currency measures to exclude foreign exchange rate volatility, revealing an 11.5% sales growth and an 8.8% diluted EPS decline year-over-year in Q2 2025 on this basis - The company presents constant currency results to facilitate period-to-period comparisons of its business performance, excluding the volatility of foreign currency exchange rates[17](index=17&type=chunk) Q2 2025 GAAP vs. Constant Currency (Non-GAAP) | Metric | Reported GAAP | Constant Currency Adj. | Non-GAAP Measure | YoY Change (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Sales | $2,440.0M | $(33.9)M | $2,406.1M | 11.5% | | Net Earnings | $170.5M | $(44.2)M | $126.3M | (10.0)% | | Diluted EPS | $1.13 | $(0.30) | $0.83 | (8.8)% | [Company Information and Forward-Looking Statements](index=2&type=section&id=Company%20Information%20and%20Forward-Looking%20Statements) [About Skechers U.S.A., Inc.](index=2&type=section&id=About%20Skechers%20U.S.A.,%20Inc.) Skechers U.S.A., Inc. is a global leader in footwear, apparel, and accessories, distributing products in approximately 180 countries through wholesale partners and a direct-to-consumer network - Skechers is a global footwear leader specializing in lifestyle and performance products for men, women, and children[7](index=7&type=chunk) - The company operates a global distribution network, selling products in approximately **180 countries** through wholesale channels and approximately **5,300 Skechers-owned retail stores**[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor warning that the report contains forward-looking statements subject to various risks and uncertainties, including supply chain disruptions and international instability - The report includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[8](index=8&type=chunk) - Key risks that could cause actual results to differ materially include: supply chain disruptions, international economic and political conditions (inflation, tariffs, conflicts), intense competition, and uncertainties related to a proposed merger[8](index=8&type=chunk)

Group 1 - Skechers has launched a new line of kids' sneakers featuring a hidden compartment for Apple AirTag, allowing parents to track their child's shoes [1] - The shoes were announced in mid-July with minimal press coverage, but gained attention from AppleInsider [2] - AirTags utilize Bluetooth technology for location tracking, but are not designed for tracking fast-moving objects like children [3] Group 2 - There are concerns regarding the potential misuse of AirTags for stalking, leading to a class action lawsuit against Apple [4] - While Skechers' product is aimed at children, the normalization of such surveillance technology could lead to similar products for adults, raising ethical concerns [5]