Apr 29, 2010
Skechers first quarter beats; sees revenue gathering pace on ad boost
Apr 29, 2010
April 28 (Reuters) - Skechers USA Inc (SKX.N) first-quarter profit sailed past Wall Street expectations as the shoe maker ramped up advertising to spur sales growth.
Skechers, which expects the sales momentum to continue through the year, has been hyping its new men's and women's lines with print, outdoor, and television campaigns.
The company, whose latest ad campaign features retired National Football League Hall of Fame quarterback Joe Montana, has also been airing a string of TV ads to create a buzz around its kids footwear lines during prime viewing time.
"This targeted advertising has created a halo affect with our many other Skechers lines, including our men's sport and men's and women's USA, all of which saw growth in the quarter," a company executive said on a call with analysts.
Manhattan Beach, California-based Skechers, whose sales surged 44 percent to exceed analysts' expectations, is seeing strong April sales in its wholesale and international businesses.
It is also seeing a double-digit rise in retail same-store sales and accelerating backlog.
During the first quarter, sales accelerated in both domestic and international wholesale and retail channels, boosting Skechers margins substantially.
Gross margins were 48.2 percent of sales, compared with 36.5 percent last year.
Sales at the company, whose rivals include Deckers Outdoor Corp (DECK.O) and Timberland Co (TBL.N), came in at $492.8 million, comfortably surpassing analysts' expectations of $459.6 million.
For the first-quarter ended March 31, the company earned $56.3 million, or $1.15 a share, up from $8.2 million, or 18 cents a share, a year ago.
Analysts were expecting the company to earn $1.05 a share, according to Thomson Reuters I/B/E/S.
The company's shares, which have jumped 42 percent over the past 3 months, closed at $40.30 Wednesday 28 April on the New York Stock Exchange. (Reporting by Viraj Nair in Bangalore; Editing by Ratul Ray Chaudhuri)
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