Skechers' FY Revenues Top $1 Billion

Skechers' FY05 net sales increased 9.4% to $1.006 billion as compared to net sales of $920.3 million in FY04. Net earnings were $44.7 million versus net earnings of $23.6 million in '04.

Net sales for 4Q05 increased 8.2% to $223.5 million. 4Q net earnings were $5.9 million versus net earnings of $2.1 million.

"We are very pleased with our record fourth quarter and full-year sales. Our record fourth quarter, combined with our record first and second quarters and strong third quarter, resulted in the highest annual revenues in the company's history," said CFO Fred Schneider.

Gross profit for '05 was $420.5 million compared to $370.9 million in '04. Gross margin for '05 was 41.8% versus 40.3% for 2004. 4Q gross profit was $93.0 million compared to $82.0 million. Gross margin in 4Q05 was 41.6% versus 39.7%.

"Our record sales and improved margins are the result of our dedicated efforts to consistently deliver trend-right styles, which has led to an increased demand for our in-season product and continued growth in our fashion and street lines," stated David Weinberg, COO. "With our footwear on target, we grew our domestic and international wholesale and Skechers-owned retail businesses with increased profitability through cost management on the expense and operational side of the business."

Robert Greenberg, CEO, stated: "For Skechers, '05 was an incredibly successful year as we reached a billion dollars in net sales - today Skechers is a worldwide, multi-brand footwear company with more than 20 divisions. Our success is a testament to the strength and relevance of the Skechers brand and the impact our new brands on the marketplace. Throughout the year, we have consistently delivered strong selling styles in our now signature Skechers looks, as well as developed an array of new styles that have proven to be on the mark.

"We are particularly pleased with the success of our growing fashion and street lines, as we've seen great improvements in the Michelle K, Mark Nason and Marc Ecko Footwear lines. We are equally excited about the introduction of Kitson footwear in the fourth quarter as well as the launch of the Game's signature sneaker, Hurricane by 310, which reached stores in late December and has enjoyed great sell-throughs at retail.

"We believe Kitson, combined with the power of its eponymous boutique, and 310 with the introduction of Best Actor Oscar nominee Terrence Howard as the new face of the brand both have tremendous potential. As we begin 2006 we are excited by our recent reception at WSA's The Shoe Show and the many opportunities for Skechers this coming year and as we look towards the future."

Weinberg continued: "Our very strong finish to the year coupled with our key performance indicators, including the recent Shoe Show, gives us confidence that our momentum will continue in 2006. We believe that our consistent performance over the past two years and our new position as a leading billion dollar brand marks a new era for Skechers - one of increased profitability and renewed growth."

Skechers now expects 1Q06 net sales to be in the range of $270 million to $280 million and diluted EPS in the range of 29¢ to 34¢.