Skechers U.S.A., Inc. (NYSE:SKX) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 04:30 pm ET

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Skechers U.S.A., Inc. (NYSE:SKX) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the SKECHERS Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to SKECHERS. You may begin.

Executive
Unidentified Speaker

Thank you, everyone, for joining us on SKECHERS conference call today. I will now read the Safe Harbor statement.

Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the company or future results or events may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended.

Such forward-looking statements involve known and unknown risks, including but not limited to, global, national and local economic, business and market conditions, in general and specifically, as they apply to the retail industry and the company. There can be no assurance that the actual future results performance or achievements expressed or implied by such forward-looking statements will occur.

Users of forward-looking statements are encouraged to review the company's filings with the US Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other reports filed with the SEC as required by federal securities laws for a description of all other significant risk factors that may affect the company's business, results of operations and financial conditions.

With that, I would like to turn the call over to SKECHERS' Chief Operating Officer, David Weinberg; and Chief Financial Officer, John Vandemore. David?

Executive
David Weinberg

Good afternoon, and thank you for joining us today to review SKECHERS Fourth Quarter and Full Year 2018 Financial Results. With me on the call is John Vandemore, SKECHERS' Chief Financial Officer, who will discuss our financial results in detail.

We achieved a new fourth quarter sales record of $1.08 billion, an 11.4% increase over last year. This was the result of our international business increasing 17.9% and our domestic business increasing 4.1%. On a constant currency basis, our sales growth for the quarter was 13.7%.

Our record fourth quarter follows three prior quarters of record sale, which resulted in a new annual sales record of $4.64 billion. The growth came from a 19.2% increase in our international business and a 3.5% increase in our domestic business. In addition to the record sales, fourth quarter highlights include, earnings from operations of $83.7 million, a 50% increase; diluted earnings per share of $0.31; a 4.8% sales increase in our domestic wholesale business; a 7.5% sales increase in our company-owned retail stores; and 18.4% sales increase in our international wholesale business, the result of double-digit increases in our international distributor, subsidiary and joint venture businesses; expanding our SKECHERS retail network to 2,998 stores worldwide, including the opening of 11 new company-owned stores and 195 third-party stores; breaking ground on our new distribution and logistics center in China; and repurchasing