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Skechers Back in the Black

Cost cutting lifts firm in first quarter.

Cost-cutting measures, slimmer inventory levels and a deeper move into international markets helped Skechers USA Inc. return to profitability in the first quarter after a fourth-quarter loss.
 
The company’s earnings, announced late Wednesday, handily beat analyst estimates. Skechers shares were up sharply in after-hours trading.
 
For the first quarter, Skechers said earnings declined 75 percent to $8.2 million, or 18 cents a diluted share, compared with $32.8 million, or 70 cents, for the first quarter of 2008.
 
Sales during the quarter decreased 10.8 percent to $343.5 million, versus $384.9 million for the year-ago quarter.
 
“In the first quarter, our focus was on reducing our inventory and expenses while maintaining our strong position in the domestic and international footwear markets with the goal of returning to profitability in the second
half of the year,” COO David Weinberg said in a statement.
“We have made significant improvements in our inventory, shown growth in several key international markets and had a profitable quarter. We consider these positive achievements to be an indication of the focus of our global team and the strength of our brand.”
 
CEO Robert Greenberg said in the statement that the firm continues to invest in its business globally, citing the recent launch of a subsidiary in Chile, as well as growth in Brazil, a new market for Skechers. In addition, the company continues to open new points of sale in China and Hong Kong, Greenberg said, as well as “selectively” open doors in the U.S.
 
Greenberg said Skechers is well positioned for the future.
 
“With an extremely strong balance sheet, strong liquidity, a significant cash position and a portfolio of diverse, globally recognized brands, we believe we will emerge an even stronger company when the global economy begins to turn,” he said.

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