Skechers U.S.A., Inc. (SKX) Accused of Unjustifiably Inflating the Company’s Sales Growth
According to the recently filed class action complaint, Skechers U.S.A., Inc. (SKX) officials schemed to artificially inflate the price of the company’s stock for the personal gain of Skechers’ founding family. As part of their scheme, Skechers officials touted the company’s strong sales growth while having no regard for the unsustainable increases in Selling, General & Administrative (“SG&A”) expenses. Meanwhile, members of Skechers’ founding family sold hundreds of thousands of Skechers shares during the class period for $32 million in proceeds. In reality, Skechers did not have the operational infrastructure to meet the demand for its products in many of its international markets. On July 19, 2018, Skechers announced that SG&A expenses grew by nearly 20%, causing earnings from operations to decrease by 5.7% and net earnings to decline by almost 24%. Since April 18, 2018, when news of Skechers’ increasing SG&A expenses first became public, its stock has fallen over 32% to close at $28.71 per share on September 5, 2018.
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