Skechers U.S.A., Inc. (NYSE:SKX) Q2 2015 Earnings Conference Call Transcript
Jul 29, 2015 • 04:30 pm ET
Greetings, and welcome to the Skechers USA Incorporated Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.
At this point, I'd like to turn the conference call over to Skechers. Please go ahead.
Thank you, everyone, for joining us on Skechers conference call today.
(Forward-Looking Cautionary Statements)
With that, I would like to turn the call over to Skechers Chief Operating Officer and Chief Financial Officer, David Weinberg. David?
Good afternoon, and thank you for joining us today to review Skechers second quarter 2015 financial results. Our sales for the second quarter were 800.5 million, a 36.4% increase over last year, and the highest quarterly sales in the Company's 23-year history. This also resulted in record first-half sales of 1.57 billion.
Driving the growth in the second quarter was double-digit increases in our three business channels, domestic wholesale, with an average price per pair increase of 9%; international wholesale, which includes 665 third-party owned Skechers retail stores; and our 461 Company-owned Skechers domestic and international retail stores, with total comp store sales increases of 12.9% for the quarter.
The second quarter benefited from both pent-up demand resulting from US port issues in the first quarter, as well as a shift in back-to-school shipments due to increased demand in both domestic and international markets. This continued strong demand for our product worldwide also led to record net sales, earnings from operations, net earnings, and earnings per share in the second quarter.
Second quarter financial highlights include record quarterly revenues of 800.5 million, record earnings from operations of 112.3 million, record net earnings of 79.8 million, record diluted earnings per share of $1.55, gross margin of 46.8%, and a strong balance sheet with 513.9 million in cash, or approximately $10 per diluted share.
Additional second quarter highlights include being added to the S&P 400 MidCap index as of June 30, a reflection of our significantly increased market cap; a 31.9% increase in our domestic wholesale business, with a 21% increase in pairs shipped, and a 9% increase in average price per pair; a 60.1% sales increase in our international wholesale business, with a 51.5% increase from our distributors, and a 64% increase from our subsidiaries and joint venture partners. A 23.7% sales increase in our Company-owned retail stores, which included an additional 48 net new stores compared to the prior-year period, including eight net new stores opened in the second quarter.
Worldwide Skechers retail store count, including third-party owned Skechers stores, now stand at more than 1,100 doors. The universal acceptance of our diverse range of men's, women's and kids footwear has resonated worldwide. We have significant success stories in every key product line, allowing us to build upon our product innovation and continue to expand our brand in new territories.
We have a team of celebrities that reach a vast demographic globally, from Demi Lovato resonating with teens,