SKECHERS USA Announces Second Quarter and Six Month 2008 Revenues

-- Record Second Quarter 2008 Net Sales of $354.6 Million;

-- Record Six Month 2008 Net Sales of $739.5 Million
MANHATTAN BEACH, Calif.--(Business Wire)--
SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle
footwear, today announced financial results for the quarter ended June
30, 2008.

Net sales for the second quarter of 2008 were $354.6 million
compared to $352.2 million in the second quarter of 2007. Net earnings
for the quarter were $14.6 million versus net earnings of $14.9
million in the second quarter of 2007. Net earnings per diluted share
were $0.31 on 46.8 million diluted shares outstanding versus diluted
earnings per share of $0.32 on 46.8 million diluted shares outstanding
for the second quarter of 2007.

"Our record second quarter revenues of $354 million are in line
with our expectations and the guidance we gave a few months ago,"
stated Fred Schneider, chief financial officer of SKECHERS. "We are
especially pleased with our continued strong international sales, and
believe that we will continue to see growth in key areas around the
world. While we did not experience domestic wholesale growth in the
quarter, SKECHERS wholesale sales in the U.S. were slightly better
than anticipated, which we feel is meaningful given the very soft
retail environment. Our company-owned retail business has also been
impacted by the weak domestic economy, with sales essentially flat on
an increased store base. Our profitability is also in line with our
expectations, and our balance sheet remains extremely strong, allowing
us to continue to execute our growth plans both domestically and
internationally."

For the six months ended June 30, 2008, net sales increased 6.1
percent to $739.5 million compared to net sales of $697.1 million in
the first six months of 2007. Net earnings were $47.5 million,
compared to net earnings of $38.8 million in the first six months of
2007. Net earnings per diluted share in the first six months of 2008
were $1.02 per share on 46.7 million diluted shares outstanding versus
$0.84 per share on 46.8 million diluted shares outstanding for the
same period last year.

Gross profit for the second quarter of 2008 was $157.2 million
compared to $152.0 million in the second quarter of 2007. Gross margin
was 44.3 percent for the second quarter of 2008 compared to 43.2
percent in the second quarter of 2007. Gross profit for the first six
months of 2008 reached $329.4 million or 44.5 percent of net sales
versus $301.1 million or 43.2 percent of net sales in the first six
months of 2007.

Robert Greenberg, chief executive officer of SKECHERS, said: "At
just 16 years old, we are young compared to many other global footwear
companies, yet we are a top brand in both market share and awareness,
and we are continuing to grow. In fact, a recent NPD poll tracked the
top footwear brands by sales in 10 major categories, and SKECHERS
appeared in 6 of these categories, more than any other brand,
including the No. 1 position in Juniors' Men, Juniors' Women and Low
Performance Footwear. This is an important indication of the strength
of the SKECHERS brand in the United States. We believe consumers
remain committed to a brand that delivers both style and comfort, and
our accounts remain committed to a brand they know will deliver the
right footwear at a good price and provide marketing support for their
product. We are launching new print and television campaigns for our
brands, including a multiple medium campaign featuring American Idol
winner David Cook in SKECHERS and a new print and TV campaign
featuring High School Musical star Vanessa Hudgens. We believe our
fashionable and diverse product offering, which now includes the very
fresh junior sneaker brands Punkrose for women and Public Royalty for
men, resonates with consumers in markets around the world. Our goal is
to continue to profitably grow our brand internationally as well as in
the United States by continuing to create desirable brands sought
after by consumers of all ages. We remain confident that there are
still areas to penetrate in the United States, and the opportunities
for growth internationally are numerous."

"We are pleased with our sales in the second quarter and for the
first six months of the year. Achieving record revenues and still
growing when the U.S. retail sector is very soft is clearly not easy
for any business," stated David Weinberg, SKECHERS' chief operating
officer. "We believe our growth is due to the reputation of our brand,
our diversified product offering, and our global business model."

Weinberg continued: "While we are satisfied with our performance
for the quarter, we are cautiously optimistic about the second half of
the year. We believe the third quarter will be stronger than this past
quarter, as discussed when we gave second quarter guidance a few
months ago. This expectation is based on orders received during the
second quarter, resulting in double digit backlogs internationally and
mid-single digits domestically. In addition, we just completed several
weeks of pre-lines and received very positive feedback from our key
domestic and Canadian accounts, and our international business is
growing in nearly every market across the globe. While we are cautious
in our domestic plans given the U.S. economy, our key indicators give
us confidence that we will be able to profitably grow our market
share. We are continuing to further lay the foundation for our planned
world-wide growth by enhancing our distribution capabilities, building
our international business, and looking for new opportunities to grow
domestically."

The Company now expects net sales for the third quarter of 2008 to
be in the range of $425 million to $440 million and net earnings per
diluted share of $0.57 to $0.65.

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 footwear is available in the United States via
department and specialty stores, Company-owned SKECHERS retail stores
and its e-commerce website, as well as in over 100 countries and
territories through the Company's global network of distributors and
subsidiaries in Canada, Brazil, and across Europe, as well as through
a joint venture in China. Please visit www.skechers.com or call the
Company's information line at 877-INFO-SKX.

This announcement may contain forward-looking statements that are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
without limitation, any statement that may predict, forecast, indicate
or simply state future results, performance or achievements of the
Company, and can be identified by the use of forward-looking language
such as "believe," "anticipate," "expect," "estimate," "intend,"
"plan," "project," "will be," "will continue," "will result," "could,"
"may," "might," or any variations of such words with similar meanings.
Any such statements are subject to risks and uncertainties that could
cause the Company's actual results to differ materially from those
projected in forward-looking statements. Factors that might cause or
contribute to such differences include international, national and
local general economic, political and market conditions; intense
competition among sellers of footwear for consumers; changes in
fashion trends and consumer demands; popularity of particular designs
and categories of products; the level of sales during the spring,
back-to-school and holiday selling seasons; the ability to anticipate,
identify, interpret or forecast changes in fashion trends, consumer
demand for our products and the various market factors described
above; the ability of the Company to maintain its brand image; the
ability to sustain, manage and forecast the Company's growth and
inventories; the ability to secure and protect trademarks, patents and
other intellectual property; the loss of any significant customers,
decreased demand by industry retailers and cancellation of order
commitments; potential disruptions in manufacturing related to
overseas sourcing and concentration of production in China, including,
without limitation, difficulties associated with political instability
in China, increases in labor or raw material costs, the occurrence of
prolonged adverse weather conditions, a natural disaster or outbreak
of a pandemic disease in China, or electrical shortages, labor
shortages or work stoppages that may lead to higher production costs,
production delays and/or transportation delays; changes in monetary
controls and valuations of the Yuan by the Chinese government;
increased costs of freight and transportation to meet delivery
deadlines; violation of labor or other laws by our independent
contract manufacturers, suppliers or licensees; potential imposition
of additional duties, tariffs or other trade restrictions; business
disruptions resulting from natural disasters such as an earthquake due
to the location of the Company's domestic warehouse, headquarters and
a substantial number of retail stores in California; changes in
business strategy or development plans; changes in economic conditions
that could affect the Company's ability to open retail stores in new
markets and/or the sales performance of the Company's existing stores;
the ability to attract and retain qualified personnel; the disruption,
expense and potential liability associated with existing or
unanticipated future litigation; and other factors referenced or
incorporated by reference in the Company's annual report on Form 10-K
for the year ended December 31, 2007 and in its quarterly report on
Form 10-Q for the quarter ended March 31, 2008. The risks included
here are not exhaustive. We operate in a very competitive and rapidly
changing environment. New risks emerge from time to time and we cannot
predict all such risk factors, nor can we assess the impact of all
such risk factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
Given these risks and uncertainties, you should not place undue
reliance on forward-looking statements as a prediction of actual
results. Moreover, reported results should not be considered an
indication of the Company's future performance.

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SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)

June 30, December 31,
2008 2007
-------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $145,622 $199,516
Short-term investments - 104,500
Trade accounts receivable, net 232,853 167,406
Other receivables 9,063 10,520
-------- ------------
Total receivables 241,916 177,926
-------- ------------
Inventories 234,152 204,211
Prepaid expenses and other current assets 20,865 13,993
Deferred tax assets 8,594 8,594
-------- ------------
Total current assets 651,149 708,740
-------- ------------
Property and equipment, at cost less accumulated
depreciation and amortization 126,932 98,400
Intangible assets, less applicable amortization - 78
Deferred tax assets 15,977 13,983
Long-term investments 94,075 -
Other assets, at cost 23,271 6,776
-------- ------------
TOTAL ASSETS $911,404 $827,977
======== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term borrowings $ 206 $ 437
Accounts payable 185,154 164,466
Accrued expenses 31,005 19,949
-------- ------------
Total current liabilities 216,365 184,852
-------- ------------
Long-term borrowings, excluding current
installments 16,287 16,462
Minority interest 2,620 -
Stockholders' equity 676,132 626,663
-------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $911,404 $827,977
======== ============
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SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
--------- --------- --------- ---------

Net sales $354,574 $352,211 $739,496 $697,107
Cost of sales 197,381 200,183 410,131 396,040
--------- --------- --------- ---------
Gross profit 157,193 152,028 329,365 301,067
Royalty income 230 1,193 1,070 2,394
--------- --------- --------- ---------
157,423 153,221 330,435 303,461
--------- --------- --------- ---------
Operating expenses:
Selling 38,592 40,950 64,126 67,791
General and administrative 98,857 90,473 198,079 176,457
--------- --------- --------- ---------
137,449 131,423 262,205 244,248
--------- --------- --------- ---------
Other income (expense):
Interest, net 488 1,286 1,941 2,133
Other, net 844 (147) 748 (169)
--------- --------- --------- ---------
1,332 1,139 2,689 1,964
--------- --------- --------- ---------
Earnings before income taxes
and minority interest 21,306 22,937 70,919 61,177
Income tax expense 7,045 7,989 23,814 22,329
Minority interest in loss
of consolidated subsidiary (380) - (380) -
--------- --------- --------- ---------
Net earnings $ 14,641 $ 14,948 $ 47,485 $ 38,848
========= ========= ========= =========

Net earnings per share:
Basic $ 0.32 $ 0.33 $ 1.03 $ 0.87
========= ========= ========= =========
Diluted $ 0.31 $ 0.32 $ 1.02 $ 0.84
========= ========= ========= =========

Weighted average shares:
Basic 46,000 45,576 45,941 44,777
========= ========= ========= =========
Diluted 46,810 46,808 46,737 46,809
========= ========= ========= =========
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SKECHERS USA, Inc.
David Weinberg, Chief Operating Officer
Fred Schneider, Chief Financial Officer
310-318-3100
or
Investor Relations:
ICR, Inc.
Andrew Greenebaum, 310-954-1100

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