SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle footwear, today announced financial results for the fourth quarter and fiscal year ended December 31, 2011.
Net sales for the fourth quarter of 2011 were $283.2 million as compared to $454.6 million in the fourth quarter of 2010. Loss from operations in the fourth quarter of 2011 was $103.1 million versus earnings from operations of $1.4 million in the fourth quarter of 2010. Net loss for the fourth quarter of 2011 was $57.7 million versus net earnings $3.2 million in the fourth quarter of 2010. Net loss per diluted share in the fourth quarter of 2011 was $1.18 based on 48.9 million weighted average shares outstanding as compared to net earnings per diluted share of $0.07 based on 49.2 million weighted average shares outstanding in the fourth quarter of 2010. Gross profit for the fourth quarter of 2011 was $112.6 million, including an additional reserve of $5.6 million on our original Shape-ups product, compared to $184.2 million in the fourth quarter of 2010. Gross margin in the fourth quarter 2011 was 39.8 percent versus 40.5 percent for the fourth quarter of 2010. The net loss for the quarter includes a pre-tax $45.0 million reserve for potential exposure relating to previously disclosed litigation and regulatory matters. Also, in the fourth quarter of 2011, we recorded additional pre-tax expenses of $5.0 million in additional legal and professional fees for various legal matters, $3.1 million in impairment charges, and $4.6 million in foreign bad debt reserves, offset by a pre-tax gain of $9.9 million on the sale of one of our former distribution center facilities in Ontario, California.
"Fourth quarter 2011 net sales were down 37.7 percent, which is attributable to a difficult comparison against a record fourth quarter 2010 that included higher priced toning footwear, combined with lower than expected sales across many of our other SKECHERS footwear lines primarily in our domestic wholesale business," began David Weinberg, chief operating officer and chief financial officer. "Our international business was also impacted by the slowing of toning sales as well as economic difficulties in many markets. Our retail business held up the best in part due to the increased number of stores as well as our ability to quickly turn product.”