Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SKX | |
Entity Registrant Name | SKECHERS USA INC | |
Entity Central Index Key | 1065837 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 42,114,398 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,914,396 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $396,710 | $466,685 |
Trade accounts receivable, less allowances of $23,763 in 2015 and $21,007 in 2014 | 442,688 | 272,103 |
Other receivables | 13,440 | 16,510 |
Total receivables | 456,128 | 288,613 |
Inventories | 392,192 | 453,837 |
Prepaid expenses and other current assets | 51,401 | 57,015 |
Deferred tax assets | 18,864 | 18,864 |
Total current assets | 1,315,295 | 1,285,014 |
Property, plant and equipment, net | 375,586 | 373,183 |
Other assets | 22,702 | 16,721 |
Total non-current assets | 398,288 | 389,904 |
TOTAL ASSETS | 1,713,583 | 1,674,918 |
Current Liabilities: | ||
Current installments of long-term borrowings | 99,762 | 101,407 |
Short-term borrowings | 87 | 1,810 |
Accounts payable | 321,034 | 352,815 |
Accrued expenses | 61,467 | 49,705 |
Total current liabilities | 482,350 | 505,737 |
Long-term borrowings, excluding current installments | 13,660 | 15,081 |
Other long-term liabilities | 21,040 | 19,993 |
Total non-current liabilities | 34,700 | 35,074 |
Total liabilities | 517,050 | 540,811 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred Stock, $.001 par value; 10,000 shares authorized; none issued and outstanding | ||
Additional paid-in capital | 362,174 | 355,636 |
Accumulated other comprehensive loss | -20,465 | -16,077 |
Retained earnings | 791,720 | 735,640 |
Skechers U.S.A., Inc. equity | 1,133,480 | 1,075,249 |
Noncontrolling interests | 63,053 | 58,858 |
Total equity | 1,196,533 | 1,134,107 |
TOTAL LIABILITIES AND EQUITY | 1,713,583 | 1,674,918 |
Class A Common Stock [Member] | ||
Stockholders' equity: | ||
Common Stock | 41 | 40 |
Class B Common Stock [Member] | ||
Stockholders' equity: | ||
Common Stock | $10 | $10 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Trade accounts receivable, allowances | $23,763 | $21,007 |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Class A Common Stock [Member] | ||
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 40,673,000 | 40,287,000 |
Common Stock, shares outstanding | 40,673,000 | 40,287,000 |
Class B Common Stock [Member] | ||
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 60,000,000 | 60,000,000 |
Common Stock, shares issued | 10,214,000 | 10,470,000 |
Common Stock, shares outstanding | 10,214,000 | 10,470,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Earnings (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net sales | $767,997 | $546,518 |
Cost of sales | 435,457 | 306,115 |
Gross profit | 332,540 | 240,403 |
Royalty income | 1,882 | 3,022 |
Operating income | 334,422 | 243,425 |
Operating expenses: | ||
Selling | 49,092 | 36,742 |
General and administrative | 197,141 | 158,523 |
Operating expenses | 246,233 | 195,265 |
Earnings from operations | 88,189 | 48,160 |
Other income (expense): | ||
Interest income | 186 | 103 |
Interest expense | -2,836 | -2,696 |
Other, net | -4,761 | -1,082 |
Total other expense | -7,411 | -3,675 |
Earnings before income tax expense | 80,778 | 44,485 |
Income tax expense | 19,120 | 11,437 |
Net earnings | 61,658 | 33,048 |
Less: Net earnings attributable to noncontrolling interests | 5,578 | 2,083 |
Net earnings attributable to Skechers U.S.A., Inc. | $56,080 | $30,965 |
Net earnings per share attributable to Skechers U.S.A., Inc.: | ||
Basic | $1.10 | $0.61 |
Diluted | $1.10 | $0.61 |
Weighted average shares used in calculating net earnings per share attributable to Skechers U.S.A, Inc.: | ||
Basic | 50,804 | 50,558 |
Diluted | 51,143 | 50,844 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $61,658 | $33,048 |
Other comprehensive gain (loss), net of tax: | ||
(Loss) gain on foreign currency translation adjustment | -4,621 | 302 |
Comprehensive income | 57,037 | 33,350 |
Less: Comprehensive income attributable to noncontrolling interests | 5,345 | 2,003 |
Comprehensive income attributable to Skechers U.S.A., Inc. | $51,692 | $31,347 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net earnings | $61,658 | $33,048 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation of property, plant and equipment | 13,298 | 11,288 |
Amortization of deferred financing costs | 300 | 300 |
Amortization of intangible assets | 9 | 234 |
Provision for bad debts, returns and allowances | 4,057 | 5,103 |
Tax benefit from share-based compensation | 8 | |
Non-cash share-based compensation | 4,400 | 1,321 |
Loss on disposal of property, plant and equipment | 14 | 128 |
Deferred income taxes | 209 | 8,458 |
(Increase) decrease in assets: | ||
Receivables | -175,488 | -89,383 |
Inventories | 59,228 | 45,518 |
Prepaid expenses and other current assets | 4,959 | -1,381 |
Other assets | -6,050 | -273 |
Increase (decrease) in liabilities: | ||
Accounts payable | -30,276 | -43,174 |
Accrued expenses | 15,258 | 2,225 |
Net cash used in operating activities | -48,424 | -26,580 |
Cash flows from investing activities: | ||
Capital expenditures | -14,623 | -11,369 |
Purchases of investments | -801 | |
Sales of investments | 104 | |
Net cash used in investing activities | -15,320 | -11,369 |
Cash flows from financing activities: | ||
Payments on long-term debt | -3,066 | -2,972 |
Payments on short-term borrowings | -1,753 | -1 |
Excess tax benefits from share-based compensation | 2,138 | |
Distributions to noncontrolling interests | -1,150 | -1,325 |
Net cash used in financing activities | -3,831 | -4,298 |
Net decrease in cash and cash equivalents | -67,575 | -42,247 |
Effect of exchange rates on cash and cash equivalents | -2,400 | -316 |
Cash and cash equivalents at beginning of the period | 466,685 | 372,011 |
Cash and cash equivalents at end of the period | 396,710 | 329,448 |
Cash paid during the period for: | ||
Interest | 2,387 | 2,491 |
Income taxes | $13,459 | $2,419 |
General
General | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
General | -1 | GENERAL |
Basis of Presentation | ||
The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | ||
The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2015. | ||
Fair Value of Financial Instruments | ||
The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and approximates fair value because of the relatively short maturity of such instruments. | ||
The carrying amount of the Company’s long-term borrowings are considered Level 2 liabilities that approximates fair value based upon current rates and terms available to the Company for similar debt. | ||
Use of Estimates | ||
The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||
Revenue Recognition | ||
The Company recognizes revenue on wholesale sales when products are shipped and the customer takes title and assumes risk of loss, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. This generally occurs at time of shipment. Wholesale sales, which include amounts billed for shipping and handling costs, are recognized net of allowances for estimated returns, sales allowances, discounts, and chargebacks. Allowances for estimated returns, discounts, doubtful accounts and chargebacks are recorded when related revenue is recorded. Related costs paid to third-party shipping companies are recorded as cost of sales. The Company recognizes revenue from retail and e-commerce sales at the point of sale. Sales and value added taxes collected from retail customers are excluded from reported revenues. | ||
Royalty income is earned from licensing arrangements. Upon signing a new licensing agreement, the Company receives up-front fees, which are generally characterized as prepaid royalties. These fees are initially deferred and recognized as revenue as earned. In addition, the Company receives royalty payments based on actual sales of the licensed products. Typically, at each quarter-end the Company receives correspondence from licensees indicating the actual sales for the period. This information is used to calculate and record the related royalties based on the terms of the agreement. | ||
Recent Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board (“FASB”) amended the FASB Accounting Standards Codification and created a new Topic ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). This amendment prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. For annual and interim reporting periods the mandatory adoption date of ASC 606 is January 1, 2017, and there will be two methods of adoption allowed, either a full retrospective adoption or a modified retrospective adoption. The Company is currently evaluating the impact of ASC 606, but at the current time does not know what impact the new standard will have on revenue recognized and other accounting decisions in future periods, if any, nor what method of adoption will be selected if the impact is material. | ||
In August 2014, the FASB amended the FASB Accounting Standards Codification and amended Subtopic 205-40, “Presentation of Financial Statements – Going Concern.” This amendment prescribes that an entity should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will become effective for the Company’s annual and interim reporting periods beginning January 1, 2017. The Company will begin evaluating going concern disclosures based on this guidance upon adoption. The Company does not expect that the adoption of this standard will have a material impact on the Company’s consolidated financial statements. | ||
In April 2015, the FASB issued ASU 2015-03 “Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendment will be effective for the Company’s annual and interim reporting periods beginning January 1, 2016 and should applied on a retrospective basis. The adoption of ASU 2015-03 will not have any impact on the Company’s results of operations, but will result in debt issuance costs being presented as a direct reduction from the carrying amount of debt liabilities. This standard will not have a material impact on the Company’s consolidated financial statements. |
Line_of_Credit_ShortTerm_and_L
Line of Credit, Short-Term and Long-Term Borrowings | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Line of Credit, Short-Term and Long-Term Borrowings | -2 | LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS | |||||||
The Company and its subsidiaries had $3.9 million and $3.4 million of outstanding letters of credit as of March 31, 2015 and December 31, 2014, respectively, and approximately $0.1 million and $1.8 million in short-term borrowings as of March 31, 2015 and December 31, 2014, respectively. | |||||||||
Long-term borrowings at March 31, 2015 and December 31, 2014 are as follows (in thousands): | |||||||||
2015 | 2014 | ||||||||
Note payable to banks, due in monthly installments of $346.6 (includes principal and interest), variable-rate interest at 3.93% per annum, secured by property, balloon payment of $77,060 due October 2015 | $ | 77,648 | $ | 77,900 | |||||
Note payable to banks, due in monthly installments of $531.4 (includes principal and interest), fixed-rate interest at 3.54% per annum, secured by property, balloon payment of $12,635 due December 2015 | 16,500 | 17,940 | |||||||
Note payable to banks, due in monthly installments of $483.9 (includes principal and interest), fixed-rate interest at 3.19% per annum, secured by property, balloon payment of $11,670 due June 2016 | 17,857 | 19,159 | |||||||
Note payable to TCF Equipment Finance, Inc., due in monthly installments of $30.5, (includes principal and interest) fixed-rate interest at 5.24% per annum, maturity date of July 2019 | 1,417 | 1,489 | |||||||
Subtotal | 113,422 | 116,488 | |||||||
Less current installments | 99,762 | 101,407 | |||||||
Total long-term borrowings | $ | 13,660 | $ | 15,081 | |||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity [Abstract] | |||||||||
Stockholders' Equity | -3 | STOCKHOLDERS’ EQUITY | |||||||
During the three months ended March 31, 2015, 255,522 shares of Class B common stock were converted into shares of Class A common stock. During the three months ended March 31, 2014, 10,296 shares of Class B common stock were converted into shares of Class A common stock. | |||||||||
The following table reconciles equity attributable to noncontrolling interests (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Noncontrolling interest, beginning of period | $ | 58,858 | $ | 49,598 | |||||
Net earnings attributable to noncontrolling interest | 5,578 | 2,083 | |||||||
Foreign currency translation adjustment | (233 | ) | (80 | ) | |||||
Capital distribution to noncontrolling interests | (1,150 | ) | (1,325 | ) | |||||
Noncontrolling interest, end of period | $ | 63,053 | $ | 50,276 | |||||
Noncontrolling_Interests
Noncontrolling Interests | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Noncontrolling Interests | -4 | NONCONTROLLING INTERESTS | |||||||
The Company has equity interests in several joint ventures that were established either to exclusively distribute the Company’s products throughout Asia or to construct the Company’s domestic distribution facility. These joint ventures are variable interest entities (“VIE”)s under Accounting Standards Codification (“ASC”) 810-10-15-14. The Company’s determination of the primary beneficiary of a VIE considers all relationships between the Company and the VIE, including management agreements, governance documents and other contractual arrangements. The Company has determined for its VIEs the Company is the primary beneficiary because it has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Accordingly, the Company includes the assets and liabilities and results of operations of these entities in its consolidated financial statements, even though the Company may not hold a majority equity interest. There have been no changes during 2015 in the accounting treatment or characterization of any previously identified VIE. The Company continues to reassess these relationships quarterly. The assets of these joint ventures are restricted in that they are not available for general business use outside the context of such joint ventures. The holders of the liabilities of each joint venture have no recourse to the Company. The Company does not have a variable interest in any unconsolidated VIEs. | |||||||||
The following VIEs are consolidated into the Company’s condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities were as follows (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
HF Logistics-SKX, LLC | |||||||||
Current assets | $ | 8,052 | $ | 6,812 | |||||
Noncurrent assets | 117,523 | 118,837 | |||||||
Total assets | $ | 125,575 | $ | 125,649 | |||||
Current liabilities | $ | 79,198 | $ | 78,668 | |||||
Noncurrent liabilities | 1,118 | 1,194 | |||||||
Total liabilities | $ | 80,316 | $ | 79,862 | |||||
Distribution joint ventures (1) | |||||||||
Current assets | $ | 111,638 | $ | 94,819 | |||||
Noncurrent assets | 11,843 | 10,322 | |||||||
Total assets | $ | 123,481 | $ | 105,141 | |||||
Current liabilities | $ | 45,619 | $ | 38,470 | |||||
Noncurrent liabilities | 64 | 66 | |||||||
Total liabilities | $ | 45,683 | $ | 38,536 | |||||
-1 | Distribution joint ventures include Skechers China Limited, Skechers Southeast Asia Limited, Skechers (Thailand) Limited, Skechers South Asia Private Limited, and Skechers Retail India Private Limited. | ||||||||
Net earnings attributable to noncontrolling interests was $5.6 million and $2.1 million for the three months ended March 31, 2015 and 2014, respectively, which represents the share of net earnings that is attributable to the Company’s joint venture partners. HF Logistics-SKX, LLC made cash capital distributions of $1.2 million and $1.0 million during the three months ended March 31, 2015 and 2014, respectively. Skechers China Limited made capital distributions of $0.3 million during the three months ended March 31, 2014. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | -5 | EARNINGS PER SHARE | |||||||
Basic earnings per share represent net earnings divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share, in addition to the weighted average determined for basic earnings per share, includes potential common shares, if dilutive, which would arise from the exercise of stock options and nonvested shares using the treasury stock method. | |||||||||
The Company has two classes of issued and outstanding common stock, Class A Common Stock and Class B Common Stock. Holders of Class A Common Stock and holders of Class B Common Stock have substantially identical rights, including rights with respect to any declared dividends or distributions of cash or property and the right to receive proceeds on liquidation or dissolution of the Company after payment of the Company’s indebtedness. The two classes have different voting rights, with holders of Class A Common Stock entitled to one vote per share while holders of Class B Common Stock are entitled to ten votes per share. The Company uses the two-class method for calculating net earnings per share. Basic and diluted net earnings per share of Class A Common Stock and Class B Common Stock are identical. | |||||||||
The following is a reconciliation of net earnings and weighted average common shares outstanding for purposes of calculating basic earnings per share (in thousands, except per share amounts): | |||||||||
Three Months Ended March 31, | |||||||||
Basic earnings per share | 2015 | 2014 | |||||||
Net earnings attributable to Skechers U.S.A., Inc. | $ | 56,080 | $ | 30,965 | |||||
Weighted average common shares outstanding | 50,804 | 50,558 | |||||||
Basic earnings per share attributable to Skechers U.S.A., Inc. | $ | 1.1 | $ | 0.61 | |||||
The following is a reconciliation of net earnings and weighted average common shares outstanding for purposes of calculating diluted earnings per share (in thousands, except per share amounts): | |||||||||
Three Months Ended March 31, | |||||||||
Diluted earnings per share | 2015 | 2014 | |||||||
Net earnings attributable to Skechers U.S.A., Inc. | $ | 56,080 | $ | 30,965 | |||||
Weighted average common shares outstanding | 50,804 | 50,558 | |||||||
Dilutive effect of stock options | 339 | 286 | |||||||
Weighted average common shares outstanding | 51,143 | 50,844 | |||||||
Diluted earnings per share attributable to Skechers U.S.A., Inc. | $ | 1.1 | $ | 0.61 |
Stock_Compensation
Stock Compensation | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Stock Compensation | -6 | STOCK COMPENSATION | |||||||
For share-based awards the Company recognized compensation expense based on the grant date fair value. Share-based compensation expense was $4.4 million and $1.3 million for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
A summary of the status and changes of our nonvested shares related to the Company’s Equity Incentive Plans as of and for the three months ended March 31, 2015 is presented below: | |||||||||
Shares | Weighted Average | ||||||||
Grant-Date Fair | |||||||||
Value | |||||||||
Nonvested at December 31, 2014 | 1,263,833 | $ | 43.38 | ||||||
Granted | 7,500 | 68.01 | |||||||
Vested | (130,000 | ) | 27.54 | ||||||
Cancelled | 0 | — | |||||||
Nonvested at March 31, 2015 | 1,141,333 | 45.35 | |||||||
Income_Taxes
Income Taxes | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Taxes | -7 | INCOME TAXES | |||||||
Income tax expense and the effective tax rate for the three months ended March 31, 2015 and 2014 were as follows (in thousands, except the effective tax rate): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Income tax expense | $ | 19,120 | $ | 11,437 | |||||
Effective tax rate | 23.7 | % | 25.7 | % | |||||
The tax provision for the three months ended March 31, 2015 and 2014 was computed using the estimated effective tax rates applicable to each of the domestic and international taxable jurisdictions for the full year. The Company estimates its ongoing effective annual tax rate in 2015 to be between 21% and 25%, which is subject to management’s quarterly review and revision, if necessary. | |||||||||
The Company’s provision for income tax expense and effective income tax rate are significantly impacted by the mix of the Company’s domestic and foreign earnings (loss) before income taxes. In the foreign jurisdictions in which the Company has operations, the applicable statutory rates range from 0% to 34%, which is generally significantly lower than the U.S. federal and state combined statutory rate of approximately 39%. For the three months ended March 31, 2015, the decrease in the effective tax rate was primarily attributable to an increase in the amount of foreign earnings relative to domestic earnings as compared to the same period in the prior year. | |||||||||
As of March 31, 2015, the Company had approximately $396.7 million in cash and cash equivalents, of which $171.2 million, or 43.2%, was held outside the U.S. Of the $171.2 million held by the Company’s foreign subsidiaries, approximately $51.1 million is available for repatriation to the U.S. without incurring U.S. income taxes and applicable foreign income and withholding taxes in excess of the amounts accrued in the Company’s condensed consolidated financial statements as of March 31, 2015. Under current applicable tax laws, if the Company chooses to repatriate some or all of the funds designated as indefinitely reinvested outside the U.S., the amount repatriated would be subject to U.S. income taxes and applicable foreign income and withholding taxes. The Company does not expect to repatriate any of the funds presently designated as indefinitely reinvested outside the U.S. As such, the Company did not provide for deferred income taxes on its accumulated undistributed earnings of the Company’s foreign subsidiaries. |
Business_and_Credit_Concentrat
Business and Credit Concentrations | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Business and Credit Concentrations | -8 | BUSINESS AND CREDIT CONCENTRATIONS | |||||||
The Company generates the majority of its sales in the United States; however, several of its products are sold into various foreign countries, which subject the Company to the risks of doing business abroad. In addition, the Company operates in the footwear industry, and its business depends on the general economic environment and levels of consumer spending. Changes in the marketplace may significantly affect management’s estimates and the Company’s performance. Management performs regular evaluations concerning the ability of customers to satisfy their obligations and provides for estimated doubtful accounts. Domestic accounts receivable, which generally do not require collateral from customers, were $236.1 million and $166.9 million before allowances for bad debts, sales returns and chargebacks at March 31, 2015 and December 31, 2014, respectively. Foreign accounts receivable, which in some cases are collateralized by letters of credit, were equal to $230.3 million and $126.2 million before allowance for bad debts, sales returns and chargebacks at March 31, 2015 and December 31, 2014, respectively. The Company’s charges for bad debt and reserves for credit losses for the three months ended March 31, 2015 and 2014 were approximately $4.1 million and $5.1 million, respectively. The Company’s credit losses attributable to write-offs for the three months ended March 31, 2015 and 2014 were $1.1 million and $3.8 million, respectively. | |||||||||
Assets located outside the U.S. consist primarily of cash, accounts receivable, inventory, property, plant and equipment, and other assets. Net total assets held outside the United States were $600.5 million and $548.9 million at March 31, 2015 and December 31, 2014, respectively. | |||||||||
The Company’s net sales to its five largest customers accounted for approximately 17.1% and 17.1% of total net sales for the three months ended March 31, 2015 and 2014, respectively. No customer accounted for more than 10% of our net sales during the three months ended March 31, 2015 and 2014. No customer accounted for more than 10% of net trade receivables at March 31, 2015 or December 31, 2014. | |||||||||
The Company’s top five manufacturers produced the following, as a percentage of total production, for the three months ended March 31, 2015 and 2014: | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Manufacturer #1 | 34.4 | % | 36.8 | % | |||||
Manufacturer #2 | 8.4 | % | 5.8 | % | |||||
Manufacturer #3 | 6.9 | % | 5.4 | % | |||||
Manufacturer #4 | 4.5 | % | 5.3 | % | |||||
Manufacturer #5 | 4.1 | % | 5 | % | |||||
58.3 | % | 58.3 | % | ||||||
The majority of the Company’s products are produced in China. The Company’s operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations and revaluations, custom duties and related fees, various import controls and other monetary barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability. The Company believes it has acted to reduce these risks by diversifying manufacturing among various factories. To date, these business risks have not had a material adverse impact on the Company’s operations. |
Segment_and_Geographic_Reporti
Segment and Geographic Reporting Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment and Geographic Reporting Information | -9 | SEGMENT AND GEOGRAPHIC REPORTING INFORMATION | |||||||
The Company has four reportable segments – domestic wholesale sales, international wholesale sales, retail sales, and e-commerce sales. Management evaluates segment performance based primarily on net sales and gross profit. All other costs and expenses of the Company are analyzed on an aggregate basis, and these costs are not allocated to the Company’s segments. Net sales, gross profit, identifiable assets and additions to property and equipment for the domestic wholesale, international wholesale, retail, and the e-commerce segments on a combined basis were as follows (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
Domestic wholesale | $ | 321,328 | $ | 232,492 | |||||
International wholesale | 285,571 | 179,083 | |||||||
Retail | 154,557 | 128,878 | |||||||
E-commerce | 6,541 | 6,065 | |||||||
Total | $ | 767,997 | $ | 546,518 | |||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Gross profit | |||||||||
Domestic wholesale | $ | 125,730 | $ | 84,554 | |||||
International wholesale | 113,377 | 76,290 | |||||||
Retail | 90,270 | 76,761 | |||||||
E-commerce | 3,163 | 2,798 | |||||||
Total | $ | 332,540 | $ | 240,403 | |||||
March 31, 2015 | December 31, 2014 | ||||||||
Identifiable assets | |||||||||
Domestic wholesale | $ | 964,314 | $ | 979,582 | |||||
International wholesale | 544,859 | 510,063 | |||||||
Retail | 204,082 | 185,041 | |||||||
E-commerce | 328 | 232 | |||||||
Total | $ | 1,713,583 | $ | 1,674,918 | |||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Additions to property, plant and equipment | |||||||||
Domestic wholesale | $ | 5,688 | $ | 2,006 | |||||
International wholesale | 3,555 | 1,004 | |||||||
Retail | 5,380 | 8,359 | |||||||
Total | $ | 14,623 | $ | 11,369 | |||||
Geographic Information: | |||||||||
The following summarizes the Company’s operations in different geographic areas for the period indicated (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales (1) | |||||||||
United States | $ | 453,164 | $ | 344,654 | |||||
Canada | 23,242 | 21,684 | |||||||
Other international (2) | 291,591 | 180,180 | |||||||
Total | $ | 767,997 | $ | 546,518 | |||||
March 31, 2015 | December 31, 2014 | ||||||||
Property, plant and equipment | |||||||||
United States | $ | 332,512 | $ | 332,383 | |||||
Canada | 7,256 | 7,203 | |||||||
Other international (2) | 35,818 | 33,597 | |||||||
Total | $ | 375,586 | $ | 373,183 | |||||
-1 | The Company has subsidiaries in Canada, the United Kingdom, Germany, France, Spain, Portugal, Italy, the Netherlands, Japan, Brazil, Hungary and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, Thailand and India that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary. | ||||||||
-2 | Other international includes Switzerland, the United Kingdom, Germany, Austria, France, Spain, Portugal, Italy, Belgium, the Netherlands, Brazil, Chile, China, Hong Kong, Malaysia, Singapore, Thailand, Vietnam, India, Hungary and Japan. |
Litigation
Litigation | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation | -10 | LITIGATION |
The Company recognizes legal expense in connection with loss contingencies as incurred. | ||
In accordance with accounting principles generally accepted in the U.S., the Company records a liability in its consolidated financial statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings are inherently difficult to predict, particularly when the matters are in the procedural stages or with unspecified or indeterminate claims for damages, potential penalties, or fines. Accordingly, the Company cannot determine the final amount, if any, of its liability beyond the amount accrued in the consolidated financial statements as of March 31, 2015, nor is it possible to estimate what litigation-related costs will be in the future. |
General_Policies
General (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation | ||||||||
The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |||||||||
The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2015. | |||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||
The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and approximates fair value because of the relatively short maturity of such instruments. | |||||||||
The carrying amount of the Company’s long-term borrowings are considered Level 2 liabilities that approximates fair value based upon current rates and terms available to the Company for similar debt. | |||||||||
Use of Estimates | Use of Estimates | ||||||||
The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |||||||||
Revenue Recognition | Revenue Recognition | ||||||||
The Company recognizes revenue on wholesale sales when products are shipped and the customer takes title and assumes risk of loss, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. This generally occurs at time of shipment. Wholesale sales, which include amounts billed for shipping and handling costs, are recognized net of allowances for estimated returns, sales allowances, discounts, and chargebacks. Allowances for estimated returns, discounts, doubtful accounts and chargebacks are recorded when related revenue is recorded. Related costs paid to third-party shipping companies are recorded as cost of sales. The Company recognizes revenue from retail and e-commerce sales at the point of sale. Sales and value added taxes collected from retail customers are excluded from reported revenues. | |||||||||
Royalty income is earned from licensing arrangements. Upon signing a new licensing agreement, the Company receives up-front fees, which are generally characterized as prepaid royalties. These fees are initially deferred and recognized as revenue as earned. In addition, the Company receives royalty payments based on actual sales of the licensed products. Typically, at each quarter-end the Company receives correspondence from licensees indicating the actual sales for the period. This information is used to calculate and record the related royalties based on the terms of the agreement. | |||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) amended the FASB Accounting Standards Codification and created a new Topic ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). This amendment prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. For annual and interim reporting periods the mandatory adoption date of ASC 606 is January 1, 2017, and there will be two methods of adoption allowed, either a full retrospective adoption or a modified retrospective adoption. The Company is currently evaluating the impact of ASC 606, but at the current time does not know what impact the new standard will have on revenue recognized and other accounting decisions in future periods, if any, nor what method of adoption will be selected if the impact is material. | |||||||||
In August 2014, the FASB amended the FASB Accounting Standards Codification and amended Subtopic 205-40, “Presentation of Financial Statements – Going Concern.” This amendment prescribes that an entity should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will become effective for the Company’s annual and interim reporting periods beginning January 1, 2017. The Company will begin evaluating going concern disclosures based on this guidance upon adoption. The Company does not expect that the adoption of this standard will have a material impact on the Company’s consolidated financial statements. | |||||||||
In April 2015, the FASB issued ASU 2015-03 “Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendment will be effective for the Company’s annual and interim reporting periods beginning January 1, 2016 and should applied on a retrospective basis. The adoption of ASU 2015-03 will not have any impact on the Company’s results of operations, but will result in debt issuance costs being presented as a direct reduction from the carrying amount of debt liabilities. This standard will not have a material impact on the Company’s consolidated financial statements. | |||||||||
Noncontrolling Interests | The Company has equity interests in several joint ventures that were established either to exclusively distribute the Company’s products throughout Asia or to construct the Company’s domestic distribution facility. These joint ventures are variable interest entities (“VIE”)s under Accounting Standards Codification (“ASC”) 810-10-15-14. The Company’s determination of the primary beneficiary of a VIE considers all relationships between the Company and the VIE, including management agreements, governance documents and other contractual arrangements. The Company has determined for its VIEs the Company is the primary beneficiary because it has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Accordingly, the Company includes the assets and liabilities and results of operations of these entities in its consolidated financial statements, even though the Company may not hold a majority equity interest. There have been no changes during 2015 in the accounting treatment or characterization of any previously identified VIE. The Company continues to reassess these relationships quarterly. The assets of these joint ventures are restricted in that they are not available for general business use outside the context of such joint ventures. The holders of the liabilities of each joint venture have no recourse to the Company. The Company does not have a variable interest in any unconsolidated VIEs. | ||||||||
The following VIEs are consolidated into the Company’s condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities were as follows (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
HF Logistics-SKX, LLC | |||||||||
Current assets | $ | 8,052 | $ | 6,812 | |||||
Noncurrent assets | 117,523 | 118,837 | |||||||
Total assets | $ | 125,575 | $ | 125,649 | |||||
Current liabilities | $ | 79,198 | $ | 78,668 | |||||
Noncurrent liabilities | 1,118 | 1,194 | |||||||
Total liabilities | $ | 80,316 | $ | 79,862 | |||||
Distribution joint ventures (1) | |||||||||
Current assets | $ | 111,638 | $ | 94,819 | |||||
Noncurrent assets | 11,843 | 10,322 | |||||||
Total assets | $ | 123,481 | $ | 105,141 | |||||
Current liabilities | $ | 45,619 | $ | 38,470 | |||||
Noncurrent liabilities | 64 | 66 | |||||||
Total liabilities | $ | 45,683 | $ | 38,536 | |||||
-1 | Distribution joint ventures include Skechers China Limited, Skechers Southeast Asia Limited, Skechers (Thailand) Limited, Skechers South Asia Private Limited, and Skechers Retail India Private Limited. | ||||||||
Net earnings attributable to noncontrolling interests was $5.6 million and $2.1 million for the three months ended March 31, 2015 and 2014, respectively, which represents the share of net earnings that is attributable to the Company’s joint venture partners. HF Logistics-SKX, LLC made cash capital distributions of $1.2 million and $1.0 million during the three months ended March 31, 2015 and 2014, respectively. Skechers China Limited made capital distributions of $0.3 million during the three months ended March 31, 2014. |
Line_of_Credit_ShortTerm_and_L1
Line of Credit, Short-Term and Long-Term Borrowings (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Borrowings | Long-term borrowings at March 31, 2015 and December 31, 2014 are as follows (in thousands): | ||||||||
2015 | 2014 | ||||||||
Note payable to banks, due in monthly installments of $346.6 (includes principal and interest), variable-rate interest at 3.93% per annum, secured by property, balloon payment of $77,060 due October 2015 | $ | 77,648 | $ | 77,900 | |||||
Note payable to banks, due in monthly installments of $531.4 (includes principal and interest), fixed-rate interest at 3.54% per annum, secured by property, balloon payment of $12,635 due December 2015 | 16,500 | 17,940 | |||||||
Note payable to banks, due in monthly installments of $483.9 (includes principal and interest), fixed-rate interest at 3.19% per annum, secured by property, balloon payment of $11,670 due June 2016 | 17,857 | 19,159 | |||||||
Note payable to TCF Equipment Finance, Inc., due in monthly installments of $30.5, (includes principal and interest) fixed-rate interest at 5.24% per annum, maturity date of July 2019 | 1,417 | 1,489 | |||||||
Subtotal | 113,422 | 116,488 | |||||||
Less current installments | 99,762 | 101,407 | |||||||
Total long-term borrowings | $ | 13,660 | $ | 15,081 | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity [Abstract] | |||||||||
Equity Attributable to Noncontrolling Interests | The following table reconciles equity attributable to noncontrolling interests (in thousands): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Noncontrolling interest, beginning of period | $ | 58,858 | $ | 49,598 | |||||
Net earnings attributable to noncontrolling interest | 5,578 | 2,083 | |||||||
Foreign currency translation adjustment | (233 | ) | (80 | ) | |||||
Capital distribution to noncontrolling interests | (1,150 | ) | (1,325 | ) | |||||
Noncontrolling interest, end of period | $ | 63,053 | $ | 50,276 | |||||
Noncontrolling_Interests_Table
Noncontrolling Interests (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Carrying Amounts and Classification of Assets and Liabilities for VIEs | The following VIEs are consolidated into the Company’s condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities were as follows (in thousands): | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
HF Logistics-SKX, LLC | |||||||||
Current assets | $ | 8,052 | $ | 6,812 | |||||
Noncurrent assets | 117,523 | 118,837 | |||||||
Total assets | $ | 125,575 | $ | 125,649 | |||||
Current liabilities | $ | 79,198 | $ | 78,668 | |||||
Noncurrent liabilities | 1,118 | 1,194 | |||||||
Total liabilities | $ | 80,316 | $ | 79,862 | |||||
Distribution joint ventures (1) | |||||||||
Current assets | $ | 111,638 | $ | 94,819 | |||||
Noncurrent assets | 11,843 | 10,322 | |||||||
Total assets | $ | 123,481 | $ | 105,141 | |||||
Current liabilities | $ | 45,619 | $ | 38,470 | |||||
Noncurrent liabilities | 64 | 66 | |||||||
Total liabilities | $ | 45,683 | $ | 38,536 | |||||
-1 | Distribution joint ventures include Skechers China Limited, Skechers Southeast Asia Limited, Skechers (Thailand) Limited, Skechers South Asia Private Limited, and Skechers Retail India Private Limited. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Basic Earnings Per Share | The following is a reconciliation of net earnings and weighted average common shares outstanding for purposes of calculating basic earnings per share (in thousands, except per share amounts): | ||||||||
Three Months Ended March 31, | |||||||||
Basic earnings per share | 2015 | 2014 | |||||||
Net earnings attributable to Skechers U.S.A., Inc. | $ | 56,080 | $ | 30,965 | |||||
Weighted average common shares outstanding | 50,804 | 50,558 | |||||||
Basic earnings per share attributable to Skechers U.S.A., Inc. | $ | 1.1 | $ | 0.61 | |||||
Diluted Earnings Per Share | The following is a reconciliation of net earnings and weighted average common shares outstanding for purposes of calculating diluted earnings per share (in thousands, except per share amounts): | ||||||||
Three Months Ended March 31, | |||||||||
Diluted earnings per share | 2015 | 2014 | |||||||
Net earnings attributable to Skechers U.S.A., Inc. | $ | 56,080 | $ | 30,965 | |||||
Weighted average common shares outstanding | 50,804 | 50,558 | |||||||
Dilutive effect of stock options | 339 | 286 | |||||||
Weighted average common shares outstanding | 51,143 | 50,844 | |||||||
Diluted earnings per share attributable to Skechers U.S.A., Inc. | $ | 1.1 | $ | 0.61 |
Stock_Compensation_Tables
Stock Compensation (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Summary of Nonvested Shares Related to Equity Incentive Plans | A summary of the status and changes of our nonvested shares related to the Company’s Equity Incentive Plans as of and for the three months ended March 31, 2015 is presented below: | ||||||||
Shares | Weighted Average | ||||||||
Grant-Date Fair | |||||||||
Value | |||||||||
Nonvested at December 31, 2014 | 1,263,833 | $ | 43.38 | ||||||
Granted | 7,500 | 68.01 | |||||||
Vested | (130,000 | ) | 27.54 | ||||||
Cancelled | 0 | — | |||||||
Nonvested at March 31, 2015 | 1,141,333 | 45.35 |
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Summary of Income Tax Expense and Effective Tax Rate | Income tax expense and the effective tax rate for the three months ended March 31, 2015 and 2014 were as follows (in thousands, except the effective tax rate): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Income tax expense | $ | 19,120 | $ | 11,437 | |||||
Effective tax rate | 23.7 | % | 25.7 | % |
Business_and_Credit_Concentrat1
Business and Credit Concentrations (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Company's Top Five Manufacturers Produced | The Company’s top five manufacturers produced the following, as a percentage of total production, for the three months ended March 31, 2015 and 2014: | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Manufacturer #1 | 34.4 | % | 36.8 | % | |||||
Manufacturer #2 | 8.4 | % | 5.8 | % | |||||
Manufacturer #3 | 6.9 | % | 5.4 | % | |||||
Manufacturer #4 | 4.5 | % | 5.3 | % | |||||
Manufacturer #5 | 4.1 | % | 5 | % | |||||
58.3 | % | 58.3 | % |
Segment_and_Geographic_Reporti1
Segment and Geographic Reporting Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Reporting Information | Net sales, gross profit, identifiable assets and additions to property and equipment for the domestic wholesale, international wholesale, retail, and the e-commerce segments on a combined basis were as follows (in thousands): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
Domestic wholesale | $ | 321,328 | $ | 232,492 | |||||
International wholesale | 285,571 | 179,083 | |||||||
Retail | 154,557 | 128,878 | |||||||
E-commerce | 6,541 | 6,065 | |||||||
Total | $ | 767,997 | $ | 546,518 | |||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Gross profit | |||||||||
Domestic wholesale | $ | 125,730 | $ | 84,554 | |||||
International wholesale | 113,377 | 76,290 | |||||||
Retail | 90,270 | 76,761 | |||||||
E-commerce | 3,163 | 2,798 | |||||||
Total | $ | 332,540 | $ | 240,403 | |||||
March 31, 2015 | December 31, 2014 | ||||||||
Identifiable assets | |||||||||
Domestic wholesale | $ | 964,314 | $ | 979,582 | |||||
International wholesale | 544,859 | 510,063 | |||||||
Retail | 204,082 | 185,041 | |||||||
E-commerce | 328 | 232 | |||||||
Total | $ | 1,713,583 | $ | 1,674,918 | |||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Additions to property, plant and equipment | |||||||||
Domestic wholesale | $ | 5,688 | $ | 2,006 | |||||
International wholesale | 3,555 | 1,004 | |||||||
Retail | 5,380 | 8,359 | |||||||
Total | $ | 14,623 | $ | 11,369 | |||||
Geographic Information | Geographic Information: | ||||||||
The following summarizes the Company’s operations in different geographic areas for the period indicated (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales (1) | |||||||||
United States | $ | 453,164 | $ | 344,654 | |||||
Canada | 23,242 | 21,684 | |||||||
Other international (2) | 291,591 | 180,180 | |||||||
Total | $ | 767,997 | $ | 546,518 | |||||
March 31, 2015 | December 31, 2014 | ||||||||
Property, plant and equipment | |||||||||
United States | $ | 332,512 | $ | 332,383 | |||||
Canada | 7,256 | 7,203 | |||||||
Other international (2) | 35,818 | 33,597 | |||||||
Total | $ | 375,586 | $ | 373,183 | |||||
-1 | The Company has subsidiaries in Canada, the United Kingdom, Germany, France, Spain, Portugal, Italy, the Netherlands, Japan, Brazil, Hungary and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, Thailand and India that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary. | ||||||||
-2 | Other international includes Switzerland, the United Kingdom, Germany, Austria, France, Spain, Portugal, Italy, Belgium, the Netherlands, Brazil, Chile, China, Hong Kong, Malaysia, Singapore, Thailand, Vietnam, India, Hungary and Japan. |
Line_of_Credit_ShortTerm_and_L2
Line of Credit, Short-Term and Long-Term Borrowings - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Outstanding letters of credit | $3,900,000 | $3,400,000 |
Short-term borrowings | $87,000 | $1,810,000 |
Line_of_Credit_ShortTerm_and_L3
Line of Credit, Short-Term and Long-Term Borrowings - Long-Term Borrowings (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | $113,422 | $116,488 |
Less: current installments | 99,762 | 101,407 |
Total long-term borrowings | 13,660 | 15,081 |
Notes payable to banks [Member] | Modified loan agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | 77,648 | 77,900 |
Notes payable to banks [Member] | Master agreement one [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | 16,500 | 17,940 |
Notes payable to banks [Member] | Master agreement two [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | 17,857 | 19,159 |
Notes payable to banks [Member] | Equipment agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | $1,417 | $1,489 |
Line_of_Credit_ShortTerm_and_L4
Line of Credit, Short-Term and Long-Term Borrowings - Long-Term Borrowings (Parenthetical) (Detail) (Notes payable to banks [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Modified loan agreement [Member] | |
Debt Instrument [Line Items] | |
Monthly repayment installment of note payable | $346,600 |
Variable interest rate of note payable | 3.93% |
Balloon payment required under note payable | 77,060,000 |
Due date for note payable | 2015-10 |
Frequency of periodic payment | Monthly |
Master agreement one [Member] | |
Debt Instrument [Line Items] | |
Monthly repayment installment of note payable | 531,400 |
Fixed interest rate of note payable | 3.54% |
Balloon payment required under note payable | 12,635,000 |
Due date for note payable | 2015-12 |
Frequency of periodic payment | Monthly |
Master agreement two [Member] | |
Debt Instrument [Line Items] | |
Monthly repayment installment of note payable | 483,900 |
Fixed interest rate of note payable | 3.19% |
Balloon payment required under note payable | 11,670,000 |
Due date for note payable | 2016-06 |
Frequency of periodic payment | Monthly |
Equipment agreement [Member] | |
Debt Instrument [Line Items] | |
Monthly repayment installment of note payable | $30,500 |
Fixed interest rate of note payable | 5.24% |
Due date for note payable | 2019-07 |
Frequency of periodic payment | Monthly |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Class B Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Certain Class B stockholders converted into Class A | 255,522 | 10,296 |
Class A Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Shares issued as a part of conversion | 255,522 | 10,296 |
Stockholders_Equity_Equity_Att
Stockholders' Equity - Equity Attributable to Noncontrolling Interests (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Noncontrolling Interest [Abstract] | ||
Noncontrolling interest, beginning of period | $58,858 | $49,598 |
Net earnings attributable to noncontrolling interest | 5,578 | 2,083 |
Foreign currency translation adjustment | -233 | -80 |
Capital distribution to noncontrolling interests | -1,150 | -1,325 |
Noncontrolling interest, end of period | $63,053 | $50,276 |
Noncontrolling_Interests_Carry
Noncontrolling Interests - Carrying Amounts and Classification of Assets and Liabilities for VIEs (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Variable Interest Entity [Line Items] | ||
Current assets | $1,315,295 | $1,285,014 |
Noncurrent assets | 398,288 | 389,904 |
Total assets | 1,713,583 | 1,674,918 |
Current liabilities | 482,350 | 505,737 |
Noncurrent liabilities | 34,700 | 35,074 |
Total liabilities | 517,050 | 540,811 |
Variable interest entity, primary beneficiary [Member] | HF Logistics-SKX, LLC [Member] | ||
Variable Interest Entity [Line Items] | ||
Current assets | 8,052 | 6,812 |
Noncurrent assets | 117,523 | 118,837 |
Total assets | 125,575 | 125,649 |
Current liabilities | 79,198 | 78,668 |
Noncurrent liabilities | 1,118 | 1,194 |
Total liabilities | 80,316 | 79,862 |
Variable interest entity, primary beneficiary [Member] | Distribution joint ventures [Member] | ||
Variable Interest Entity [Line Items] | ||
Current assets | 111,638 | 94,819 |
Noncurrent assets | 11,843 | 10,322 |
Total assets | 123,481 | 105,141 |
Current liabilities | 45,619 | 38,470 |
Noncurrent liabilities | 64 | 66 |
Total liabilities | $45,683 | $38,536 |
Noncontrolling_Interests_Addit
Noncontrolling Interests - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Variable Interest Entity [Line Items] | ||
Net earnings attributable to noncontrolling interests | $5,578 | $2,083 |
Capital distributions to noncontrolling interest | 1,150 | 1,325 |
HF Logistics-SKX, LLC [Member] | Variable interest entity, primary beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Capital distributions to noncontrolling interest | 1,150 | 1,000 |
Distribution joint ventures [Member] | Variable interest entity, primary beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Capital distributions to noncontrolling interest | $325 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Class A Common Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Common stock, voting rights | One vote per share |
Class B Common Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Common stock, voting rights | Ten votes per share |
Earnings_Per_Share_Basic_Earni
Earnings Per Share - Basic Earnings Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Basic earnings per share | ||
Net earnings attributable to Skechers U.S.A., Inc. | $56,080 | $30,965 |
Weighted average common shares outstanding | 50,804 | 50,558 |
Basic earnings per share attributable to Skechers U.S.A., Inc. | $1.10 | $0.61 |
Earnings_Per_Share_Diluted_Ear
Earnings Per Share - Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Diluted earnings per share | ||
Net earnings attributable to Skechers U.S.A., Inc. | $56,080 | $30,965 |
Weighted average common shares outstanding | 50,804 | 50,558 |
Dilutive effect of stock options | 339 | 286 |
Weighted average common shares outstanding | 51,143 | 50,844 |
Diluted earnings per share attributable to Skechers U.S.A., Inc. | $1.10 | $0.61 |
Stock_Compensation_Additional_
Stock Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based compensation expense | $4.40 | $1.30 |
Stock_Compensation_Summary_of_
Stock Compensation - Summary of Nonvested Shares Related to Equity Incentive Plans (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Nonvested, Shares, Beginning of Period | 1,263,833 |
Granted, Shares | 7,500 |
Vested, Shares | -130,000 |
Cancelled, Shares | 0 |
Nonvested, Shares, End of Period | 1,141,333 |
Nonvested, Weighted Average Grant-Date Fair Value, Beginning of Period | $43.38 |
Granted, Weighted Average Grant-Date Fair Value | $68.01 |
Vested, Weighted Average Grant-Date Fair Value | $27.54 |
Cancelled, Weighted Average Grant-Date Fair Value | $0 |
Nonvested, Weighted Average Grant-Date Fair Value, End of Period | $45.35 |
Income_Taxes_Summary_of_Income
Income Taxes - Summary of Income Tax Expense and Effective Tax Rate (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $19,120 | $11,437 |
Effective tax rate | 23.70% | 25.70% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Income Taxes [Line Items] | ||||
Effective tax rate | 23.70% | 25.70% | ||
U.S. federal and state statutory rate | 39.00% | |||
Cash and cash equivalents | $396,710,000 | $329,448,000 | $466,685,000 | $372,011,000 |
Repatriation of earnings | 51,100,000 | |||
Non-U.S jurisdictions [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Cash and cash equivalents | $171,200,000 | |||
Percentage of cash and cash equivalents | 43.20% | |||
Minimum [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Effective tax rate | 21.00% | |||
Minimum [Member] | Non-U.S jurisdictions [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Statutory federal rate | 0.00% | |||
Maximum [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Effective tax rate | 25.00% | |||
Maximum [Member] | Non-U.S jurisdictions [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Statutory federal rate | 34.00% |
Business_and_Credit_Concentrat2
Business and Credit Concentrations - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Customer | |||
Concentration Risk [Line Items] | |||
Provision for bad debts, returns and allowances | $4,057,000 | $5,103,000 | |
Credit losses attributable to write-offs | 1,100,000 | 3,800,000 | |
Net Sales [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Number of largest customers | 5 | 5 | |
Percentage of net sales to largest customers | 17.10% | 17.10% | |
Number of customers accounting for more than 10% | 0 | 0 | |
Net Trade Receivable [Member] | Credit Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Number of customers accounting for more than 10% | 0 | 0 | |
Outside U.S. [Member] | |||
Concentration Risk [Line Items] | |||
Accounts receivable | 230,300,000 | 126,200,000 | |
Net total assets held outside the United States | 600,500,000 | 548,900,000 | |
Domestic [Member] | |||
Concentration Risk [Line Items] | |||
Accounts receivable | $236,100,000 | 166,900,000 |
Business_and_Credit_Concentrat3
Business and Credit Concentrations - Company's Top Five Manufacturers Produced (Detail) (Cost of Goods, Total [Member], Supplier Concentration Risk [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Concentration Risk [Line Items] | ||
Percentage of total production | 58.30% | 58.30% |
Manufacturer One [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total production | 34.40% | 36.80% |
Manufacturer Two [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total production | 8.40% | 5.80% |
Manufacturer Three [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total production | 6.90% | 5.40% |
Manufacturer Four [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total production | 4.50% | 5.30% |
Manufacturer Five [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total production | 4.10% | 5.00% |
Segment_and_Geographic_Reporti2
Segment and Geographic Reporting Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment_and_Geographic_Reporti3
Segment and Geographic Reporting Information - Segment Reporting Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | |||
Identifiable assets | $1,713,583 | $1,674,918 | |
Net sales, Total | 767,997 | 546,518 | |
Gross profit | 332,540 | 240,403 | |
Additions to property, plant and equipment | 14,623 | 11,369 | |
Domestic wholesale [Member] | |||
Segment Reporting Information [Line Items] | |||
Identifiable assets | 964,314 | 979,582 | |
Net sales, Total | 321,328 | 232,492 | |
Gross profit | 125,730 | 84,554 | |
Additions to property, plant and equipment | 5,688 | 2,006 | |
International wholesale [Member] | |||
Segment Reporting Information [Line Items] | |||
Identifiable assets | 544,859 | 510,063 | |
Net sales, Total | 285,571 | 179,083 | |
Gross profit | 113,377 | 76,290 | |
Additions to property, plant and equipment | 3,555 | 1,004 | |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Identifiable assets | 204,082 | 185,041 | |
Net sales, Total | 154,557 | 128,878 | |
Gross profit | 90,270 | 76,761 | |
Additions to property, plant and equipment | 5,380 | 8,359 | |
E-commerce [Member] | |||
Segment Reporting Information [Line Items] | |||
Identifiable assets | 328 | 232 | |
Net sales, Total | 6,541 | 6,065 | |
Gross profit | $3,163 | $2,798 |
Segment_and_Geographic_Reporti4
Segment and Geographic Reporting Information - Geographic Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Property, plant and equipment | |||
Property, plant and equipment | $375,586 | $373,183 | |
Net sales | |||
Net sales, Total | 767,997 | 546,518 | |
Domestic [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 332,512 | 332,383 | |
Net sales | |||
Net sales, Total | 453,164 | 344,654 | |
Canada [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 7,256 | 7,203 | |
Net sales | |||
Net sales, Total | 23,242 | 21,684 | |
Other international [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 35,818 | 33,597 | |
Net sales | |||
Net sales, Total | $291,591 | $180,180 |