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SKECHERS reduces its headcount by three percent
09 Feb '09
5 min read
The Company's retail business experienced mid-single digit declines in the fourth quarter and does not see any near term catalysts that would change its retail performance over the coming months. In response to the weakness at retail, it has pared back store openings where possible, deferred store re-models, and is attempting to renegotiate rents in certain locations.
“The financial performance of our domestic businesses was largely impacted by significant margin pressure in the retail marketplace, and we have taken these into consideration in our analysis of inventory and accounts receivable at year end,” stated Fred Schneider, chief financial officer of SKECHERS. “Going forward, we plan to further rationalize our expenses to be in line with our reduced outlook for 2009. Despite our disappointment with our fourth quarter results and near-term outlook, we are confident that the combination of our inventory reduction plan, reduced expenses and current sales performance will allow us to return to profitability in the back half of the year.”
The Company will report its fourth quarter 2008 results and hold a conference call after the close of market on Wednesday, February 18, 2009, but based on its preliminary analysis expects to end the fourth quarter with approximately $190 million to $200 million in cash and investments and $250 million to $260 million in inventory.
While the inventory is appreciably higher than initially expected, the Company has slowed its production, and has an aggressive plan to manage both its inventory and expenses down by the middle of 2009. The Company is cutting additional operating expenses in all key areas of business and has reduced its headcount by approximately three percent. The Company will provide further detail on its inventory and expense reduction initiatives on its February 18 fourth quarter conference call. Furthermore, the Company expects to see its cash position increase during the year.
Based on all the factors discussed, the Company now expects to break even in the first half of 2009, to return to profitability in the second half of 2009, and to achieve 2009 annual revenues between $1.2 billion and $1.3 billion.
SKECHERS USA Inc, based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names.
“The financial performance of our domestic businesses was largely impacted by significant margin pressure in the retail marketplace, and we have taken these into consideration in our analysis of inventory and accounts receivable at year end,” stated Fred Schneider, chief financial officer of SKECHERS. “Going forward, we plan to further rationalize our expenses to be in line with our reduced outlook for 2009. Despite our disappointment with our fourth quarter results and near-term outlook, we are confident that the combination of our inventory reduction plan, reduced expenses and current sales performance will allow us to return to profitability in the back half of the year.”
The Company will report its fourth quarter 2008 results and hold a conference call after the close of market on Wednesday, February 18, 2009, but based on its preliminary analysis expects to end the fourth quarter with approximately $190 million to $200 million in cash and investments and $250 million to $260 million in inventory.
While the inventory is appreciably higher than initially expected, the Company has slowed its production, and has an aggressive plan to manage both its inventory and expenses down by the middle of 2009. The Company is cutting additional operating expenses in all key areas of business and has reduced its headcount by approximately three percent. The Company will provide further detail on its inventory and expense reduction initiatives on its February 18 fourth quarter conference call. Furthermore, the Company expects to see its cash position increase during the year.
Based on all the factors discussed, the Company now expects to break even in the first half of 2009, to return to profitability in the second half of 2009, and to achieve 2009 annual revenues between $1.2 billion and $1.3 billion.
SKECHERS USA Inc, based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as under several uniquely branded names.
SKECHERS USA Inc
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