David Weinberg - Chief Financial Officer, Chief Operating Officer, Executive Vice President, Principal Accounting Officer and Director

Corinna Van der Ghinst - Citigroup Inc, Research Division Sam Poser - Sterne Agee & Leach Inc., Research Division Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division Scott D. Krasik - The Buckingham Research Group Incorporated Corinna L. Freedman - Wedbush Securities Inc., Research Division

Greetings, and welcome to the SKECHERS USA, Inc. Second Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. At this point, I would like to turn the conference over to SKECHERS. Please, go ahead.

Thank you, everyone, for joining us on SKECHERS' Conference Call today. I will now read the Safe Harbor statement. Certain statements contained herein, including, without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the company or future results or events, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known and unknown risks, including, but not limited to, global, national and local economic, business and market conditions, in general and specifically as they apply to the retail industry and the company. There can be no assurance that the actual future results, performance or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the company's filings with the U.S. Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other reports filed with the SEC as required by federal securities laws for a description of other significant risk factors that may affect the company's business, results of operations and financial conditions. With that, I would like to turn the call over to SKECHERS' Chief Operating Officer and Chief Financial Officer, David Weinberg. David?

For the 2014 financial results our second quarter sales of $587.1 million marked the highest quarterly sales in the company's 22-year history, an achievement we are extremely proud of. This growth followed a record first quarter, resulting in a 28.8% net sales increase for the first 6 months of 2014 compared to the same period last year. The continued worldwide demand for our lifestyle performance and kids' footwear resulted in double-digit increases in our domestic and international wholesale businesses, as well as our company-owned retail stores, which included a 13.9% comp store net sales increase. With key sales drivers across both genders and multiple categories, SKECHERS' growth was widespread across many product lines, and our brand presence was visible around the world. From a product, marketing and distribution standpoint, the company has never been better positioned. As indicated in the April and June reports by Princeton Retail Analysis, SKECHERS is the hottest major footwear brand. Second quarter sales and financial highlights include a 35.4% increase in our domestic wholesale business with a 30.1% increase in pairs shipped and a 4% increase in average price per pair; a 54% increase in our international wholesale business with an 87.3% increase from our distributors; and a 42.7% increase from our subsidiaries and joint venture partners; a 28.8% increase in our company-owned retail business, which included an additional 58 new stores opened in the last year, 16 of which were opened in the second quarter; earnings from operations of $53.8 million or 9.2% of net sales; gross margin of 45.9%; net earnings of $34.8 million and diluted earnings per share of $0.68; inline inventories, which were relatively flat from year end and up 26.3% from a year ago; a strong balance sheet with $414.8 million in cash or approximately $8.15 per diluted share. Additional second quarter and recent highlights include: Meb winning the Boston Marathon with a new personal best in SKECHERS' performance running shoes; the signing of multi-platinum recording artist and actress Demi Lovato and British top model and actress Kelly Brook for global endorsements; signing of sports legends Joe Namath and Pete Rose to support our Relaxed Fit from SKECHERS footwear; signing of 7-time PGA champion Matt Kuchar for SKECHERS GO GOLF; and 2-time Olympic runner, Kara Goucher, for SKECHERS GO Run footwear; the sponsorship of Triple Crown hopeful California Chrome; and receiving the Lifestyle Brand of the Year award in the U.K. from a trade publication and 2 product awards from our SKECHERS performance footwear from a running publication. With comfort at the forefront of our innovative footwear, multiple product lines are experiencing unprecedented demand from consumers around the globe with some divisions, as well as countries achieving high-double-digit and triple-digit growth in the quarter. Our global marketing continues to be on point with television commercials for each key line, a strong digital and social media presence and key window and in-store campaigns with numerous accounts. Given these factors, combined with our strong incoming order rates, July retail sales and accelerated backlogs, we believe our sales momentum will continue through the second half of the year. The continued positive reception from our key accounts to our new products during their annual bi-meetings at our corporate office this month, as well as the 4-day visit from our international partners in June during our global conference, gives us confidence that our product innovations will be received equally well by consumers. Now turning to our business in detail. Our domestic wholesale business sales increased 35.4% or $67 million for the quarter, with a 30.1% increase in pairs shipped and a 4% increase in average price per pair versus the same period last year. We would like to note that in the second quarter, we benefited from Easter shifting into the second quarter and Back-to-School shipments that were pulled forward from July into June. The growth was the result of double-digit increases in our men's, women's and kids' footwear. Each of our key divisions produced strong sales drivers, which led to triple-digit sales increases in our Women's Sport and Sport Active lines and double-digit increases in our SKECHERS Kids, Men's Sports and men's and women's SKECHERS GO -- SKECHERS USA and work lines. The focus in our lifestyle and lifestyle athletic footwear is comfort, and we see an opportunity in every division to develop product that is both stylish and comfortable. Comfort has become essential to many of our consumers, and our accounts are embracing our footwear by featuring our brand in their stores and online. To support our many successful lifestyle product categories, we aired multiple TV commercials in the second quarter, including campaigns featuring TV personality Brooke Burke-Charvet and NFL hall of famer, Joe Montana. Along with our targeted TV commercials, we ran print, digital and outdoor campaigns to further drive sales. To support our growing Kids business, including our twin styles, we add multiple Kids commercials for our boys and girls lines across leading children's programming. Additionally, our men's and women's SKECHERS GO experienced double-digit sales growth in the quarter. The performance of the running footwear was fueled by Meb's win at the Boston Marathon. Sales of the in-demand SKECHERS GOwalk accelerated due to new styles reaching the market on improving outsoles, as well as the new product innovations of SKECHERS GOwalk 2 Super Sock and the Goga Mat technology. We continue to support SKECHERS' performance division through television campaigns for our running footwear featuring Meb and our SKECHERS GOwalk 2 line. During the second quarter, SKECHERS GOwalk and several styles from our SKECHERS' Sport Division placed in the top 25 shoes in the U.S. according to SportsScan weekly report, including the #2 position. The 35.4% increase in our domestic wholesale business, our ranking on the SportsScan charts and the positive anecdotal reports from our third-party retail, as well as our accelerated backlogs, gives us confidence that demand for our footwear is stronger than ever. In the second quarter, our total international subsidiary joint venture and distributor sales increased by 54% as a result of the strength of diverse product initiatives. Our subsidiary and joint venture sales improved by 42.7%, and our distributor sales improved by 87.3%. The increase came in spite of the continuation of political issues in the Ukraine and parts of the Middle East and South America. We have seen a strong rebound to our business in Europe and believe that demand for our brand is at an all-time high across nearly every region where we directly distribute our product, resulting in triple-digit growth in 2 of our subsidiaries and double-digit growth in all but one of the remaining subsidiary countries. We expect to complete the upgrade of our European Distribution Center by the end of 2014, increasing our capacity, efficiency and to better leverage our growth in the region. Our Southeast Asia joint ventures continue to perform very well with combined growth of 31.4% for the quarter, which includes a 60% increase in our China business. Our international distributor business mirrored the strength of our domestic wholesale and international subsidiary businesses as our comfort and walking footwear resonated with the consumers around the globe. The 87.3% increase was primarily the result of triple-digit growth in Australia, New Zealand, Mexico, South Africa, South Korea, Turkey and the UAE; and double-digit growth in the Philippines, Russia in Taiwan, as well as strong performances from many other regions. We believe our international SKECHERS retail stores opened by our distribution partners are both profitable marketing tools and an essential ingredient to building a substantial business around the globe. At quarter end, there were 524 SKECHERS stores owned and operated by our joint ventures, licensees and distributors outside the United States. Of these, 337 are distributor-owned or licensed SKECHERS retail stores; 153 SKECHERS stores are in our joint venture countries in Asia, including those run by licensees in the region; additionally, there are 34 company-licensed stores in Brazil, Canada, France, Ireland, Portugal and Spain, countries where we directly distribute our products through subsidiaries. In the second quarter, 34 stores opened, including the first SKECHERS store in Libya; 6 stores in India; 4 stores in Mexico; 3 in Australia; 2 each in Malaysia, Georgia and South Korea; and 1 each in Saudi Arabia, Estonia, Latvia, Indonesia, Denmark, Kenya, Russia, Belarus, Taiwan, Brunei, Hong Kong, Macau, Portugal and Turkey. A store in South Korea closed in the quarter. 3 distributor-joint venture or licensed SKECHERS stores have opened to date in July, and another 60 to 65 are expected to open during the rest of the year. The momentum that we are experiencing in the U.S. is now being mirrored in virtually all the international markets where our product is available. The double-digit growth internationally is a reflection of the strength of our product, marketing and brand. Our double-digit backlog, the opening of additional retail stores and the reaction to our product and marketing during our June global conference gives us the confidence that this momentum will continue. Total sales in our company-owned retail stores increased by 28.8% for the quarter, with domestic sales improving by 20.9% and international sales by 75.1%, which included positive comp store sales of 12.1% domestically and 24.6% in our international stores for a 13.9% increase worldwide. At quarter end, we had 413 company-owned SKECHERS retail stores around the world. In the second quarter, we opened 16 stores, 13 of which were domestic and 3 were international. These included new stores in California, Florida, Iowa, Kansas, Louisiana, New Jersey, Tennessee, Texas and Washington, as well as stores in Canada, France and the U.K. We closed 2 domestic concept stores in the quarter. We have opened 2 stores so far this month, 1 in California and 1 in Texas, and we have another 20 to 25 planned for this quarter, including 1 later this week in Canada. And an additional 20 to 25 stores are planned for the fourth quarter. Domestic e-commerce sales increased 5.1% for the quarter. We believe our e-commerce site is a valuable marketing tool and it will continue to grow in importance as we integrate our e-commerce into our retail business. We just completed the development of our omni-channel integration and have rolled it out to all of our domestic concept stores. Now turning to our second quarter 2014 numbers in more detail. As I discussed earlier, second quarter sales increased 37.1% to $587.1 million compared to $428.2 million in the second quarter of 2013, the highest quarterly sales in the company's history. The increase is due to the strong product successes we are experiencing across all of our product categories with double-digit increases in our wholesale businesses both domestic and internationally and some international markets achieving triple-digit growth, as well as a 13.9% comp store sales increase in our company-owned retail stores worldwide versus the prior year period. Second quarter gross profit increased to $269.4 million or 45.9% of sales compared to gross profit of $194.9 million or 45.5% of sales in the corresponding prior year period. The increased gross profit and slightly higher gross margin during the quarter were due to a combination of higher sales, strong sell-throughs and a positive mix within our distribution channels. Second quarter selling expenses were $53.8 million or 9.2% of sales compared to $42.1 million or 9.8% of sales in the prior year. The dollar increase in advertising and marketing expenditures were to promote our diversified product categories, as well as to support the growth of our business overseas. Additionally, as we stated on our last call, we made a decision to shift some of our media budget from the first quarter to the second quarter due to Easter falling in late April this calendar year. Even with the shift, advertising expense on a percentage basis was flat versus the second quarter of 2013. For the second quarter, general and administrative expenses were $163.6 million or 27.9% of sales compared to $137.1 million or 32% of sales in the prior year, representing a 410-basis-point improvement in operating leverage. The dollar increase in G&A was primarily due to our increased store count, support for international growth and increased warehouse and distribution costs related to significantly higher sales volume. Of the $26.5 million increase in G&A, $11.4 million was due to increased expenses related to our international operations, and $7.5 million was related to operating an additional 58 stores when compared to the prior year period. During the second quarter of 2014, earnings from operations were $53.8 million or 9.2% of revenues compared to $17.2 million or 4% of revenues in the second quarter of 2013, a more than threefold increase from the prior year and a 520-basis-point improvement in operating margin. Net income during the quarter was $34.8 million compared to $7.1 million in the prior year period. Net income per diluted share in the second quarter was $0.68 on approximately 50.9 million average shares outstanding compared to $0.14 on approximately 50.5 million average shares outstanding in the prior year period. Our effective tax rate for the 6-month period ending June 30, 2014, was 24.9%. In the second quarter, we recorded income tax expense of $12.2 million compared to $4.6 million in the prior year period. For the remainder of the year, we estimate the effective tax rate to be in the range of 24% to 28%. Net sales for the 6-month period ending June 30, 2014 increased 28.8% to $1.1 billion compared to $879.9 million in the prior year period. Gross profit was $509.8 million or 45% of sales compared to $387.6 million or 44.1% of sales in the prior year period. Selling expenses were $90.6 million or 8% of sales compared to $79.8 million or 9.1% from last year. General and administrative expenses were $322.1 million compared to $278.5 million from last year. Earnings from operations for the first 6 months of 2014 were $101.9 million versus earnings from operations of $32.5 million for the same period last year. Net income for the 6 months was $65.8 million compared to a net income of $13.8 million last year. Diluted earnings per share were $1.29 on approximately 50.9 million average shares outstanding compared to diluted earnings per share of $0.27 on approximately 50.5 million shares last year. And now turning to our balance sheet. At June 30, 2014, we had $414.8 million in cash or approximately $8.15 per diluted share. Trade accounts receivable at quarter end were $318.5 million, and our DSOs at June 30, 2014, were 44 days versus 48 days at June 30, 2013. Total inventory, including merchandising trends at June 30, 2014 was $360.5 million representing an increase of $2.3 million from December 31, 2013, and an increase of $75 million or 26.3% from June 30, 2013. Long-term debt at June 30, 2014, decreased to $110.3 million compared to $116.5 million at December 31, 2013. The decrease is primarily due to payments made on our distribution center and distribution center equipment. Shareholders' equity at June 30, 2014 was $1.1 billion versus $979.9 million at December 31, 2013. Book value or shareholders' equity per share stood at approximately $20.74 as of June 30, 2014. Working capital was $792.8 million versus $704.5 million last year. Capital expenditures for the second quarter were approximately $12.6 million, of which $5.7 million related to 16 new stores and several store remodels and $4 million related to the upgrade of our equipment in our European Distribution Center. We expect our capital expenditures from the remainder of 2014 to be between $35 million and $40 million, which includes opening an additional 40 to 50 retail stores, several store remodels and completing the equipment upgrade at our European Distribution Center. In summary, 2014 has been and, we expect, will continue to be an exceptional year in terms of sales, profitability, product and marketing. We ended 2013 with our second highest annual sales ever, started the year with record first quarter sales and have just achieved a sales record for the second quarter. With this growth coming from all distribution channels and markets around the world, we believe it is a testament to the strength of our brand, innovations in our footwear and a broad-based appeal of our product. Paramount to the strong growth in the second quarter was the simultaneous success of multiple key product initiatives around the globe, including our SKECHERS GOwalk, Relaxed Fit, SKECHERS Sport and SKECHERS Kids footwear. The marketing support we gave these initiatives either through celebrity and sport icon endorsements, creative PR campaigns or more traditional television and digital advertising. With product that is resonating around the world, we saw our subsidiary business in the Americas, Europe and Japan achieve a combined double-digit increase. Our joint venture operations in Asia achieved a combined double-digit increase, and our distributors lure in this growth with a very strong 87.3% increase in sales. To further grow our business, we are planning on expanding our company-owned retail operations with another 40 to 50 stores worldwide. Our international distributors, joint ventures and licensees plan to open another 60 to 65 stores, bringing our total projected SKECHERS store count at year-end 2014 to approximately 1,050. The continued demand for our product, as well as the recent positive reaction from our accounts in the United States and around the world, lead us to believe that the direction of our business, footwear offering and marketing are all right on target. Given our retail growth trajectory, accelerating backlogs and incoming orders for July, we believe we are well-positioned for growth, and we will continue to achieve new quarterly and annual sales records. While we have a tough comparison in the third quarter against last year, we will remain comfortable with current streak consensus estimates for sales and earnings in the third quarter. And now I would like to turn the call over to the operator to begin the question-and-answer portion of the conference call.

[Operator Instructions] Our first question comes from Corinna Van der Ghinst from Citi. Corinna Van der Ghinst - Citigroup Inc, Research Division: Can you talk about any new distribution or increased penetration that you're seeing at existing retailers for the back half? And can you comment on how the brand is performing, specifically at run specialty and U.S. sporting goods stores? And how you're thinking about distribution there, kind of for the back half and beyond?

Yes. There is nothing new or significantly new in the numbers. While we are getting tested at some sports specialty stores, it's too new to tell any thing or any impact. So this is -- in the United States anyway is on our traditional customer base. The running stores seem to be picking up, and we're getting a nice penetration in them. But like I said, they're specialty stores and they're smaller, and they don't necessarily move the needle as far as volume is concerned. But they are certainly very instrumental in building the brand from a performance viewpoint. And we're doing quite well and getting quite a good reputation as far as they're concerned. So we're performing everywhere we are currently both domestically and internationally that's on the performance end and the running end, as well as in our strong family channel. Corinna Van der Ghinst - Citigroup Inc, Research Division: And what about online retailers? Can you comment on that?

Yes. We continue to sell online through some of our key partnerships. We don't limit, like some other people do, our online sales for a lot of customers. So we believe we have a significantly large online presence. And I think somebody was showing some quotes the other day that Google search for SKECHERS is probably at an all-time high. It's just that since we don't compete on price, it goes to our customers, which is for the current moment, just fine with us. Corinna Van der Ghinst - Citigroup Inc, Research Division: Okay, great. And how should we think about European growth going into 2015 following the completion of your distribution center upgrades and the increased capacity? Are you planning to add additional markets in Central and Eastern Europe? Or where should we think about the largest pockets of growth coming from Europe over the next year or so?

Well, the largest pockets of growth will obviously come from Western Europe where our strength is. We seem to be growing quite well into marketing, and the products resonate and, once we catch ignition, will go extremely well. And I think the big growth will come from Western Europe, which is our stronghold. Once the distribution center is finished, we will be able to handle this increased capacity and leverage it quite well. So something like what we do in the States. We're constantly looking for marketplace outside a stronghold that we might either convert from distributors or just start from scratch where we can open significant amount of stores. We'll get a wholesale volume, but it's too new. I mean, we won't even begin looking until the beginning of next year, so there's really no big growth expected in the first part of the year from new, new marketplaces. Corinna Van der Ghinst - Citigroup Inc, Research Division: Okay. And then just lastly, you guys have signed some interesting new endorsers over the past quarter, both on the celebrity fashion side and also on the athletic side of the business. Can you talk about how your marketing strategy is evolving in the U.S. and internationally? And should we look for heavier spending on athletes going forward? And given your recent performance, does it make sense to allocate more SG&A dollars towards marketing going forward?

We always allocate more dollars, although we don't believe the percentages will increase. And actually, we should be able to leverage it as we grow. We've grown by such big amounts that we can raise our dollar amount and still leverage on a percentage to the bottom line, and we plan on continuing to do that. As far as athletes are concerned or stars, we try to be opportunistic when it comes to that. We don't have a significant amount planned, but as they become available and as the brand and the commercials resonate throughout, especially this country, we get a lot of calls from people that want to be part of our team, so to speak, or family, and advertise the shoes. So we'll play it as it comes. Given the size and scope of our advertising budget worldwide, the increase of these celebrities and sports icons, for lack of a better word, won't impact significantly the amount. The biggest amount we spend is all in store and on media spend. And this, while we're increasing it, it's not as significant as we spent in those other portions.

Our next question comes from Sam Poser from Sterne Agee. Sam Poser - Sterne Agee & Leach Inc., Research Division: Just a few things. Number one, I mean, over the last few years, I mean, despite the fact that you pulled orders forward from Q3, your Q3 revenue has always been higher on a fairly significant basis. The Street's current estimates are virtually in line with what you did in the second quarter. I can't imagine that you're not thinking that Q3 is a bigger quarter given all the ship-ins you're going to have in July, August and September, especially July.

Yes. I still think -- I think the number on the Street is 590 or 600 on the high side, and I don't think we have a problem with that. The order of magnitude of what moved from July to June from what we can tell is certainly a positive, and we can get an extra turn in September so there may be some upside. But we have to really see how Back-to-School plays out before we can even commit to significantly higher volumes. I think they will be somewhat higher, although this is almost a perfect storm for second quarter with Easter moving in to the second quarter and big shipments because of our success. Now should this success continue, and it certainly could, there may be an at-once business at the back, and we could get an extra turn. But it's way too early to commit to any of that. Sam Poser - Sterne Agee & Leach Inc., Research Division: I mean, you sort of said the same thing at the end of the first quarter so...

You'd be surprised. But yes, I mean, I said the same thing. I had no idea we're going to move that much into June. It really was June. We seemed to accelerate through June, and everybody's got a big buildup for Back-to-School. So we have to move to another level to get a significant increase for the back half of Back-to-School. Sam Poser - Sterne Agee & Leach Inc., Research Division: I mean, you've been talking about the SportsScan data, which has -- I mean, in the first 2 weeks of June, July, it's really shown, I mean, it's kicked into mid- to high-30s. So -- and then it would very, very help you add speed. So I mean, it just seems like you are keeping some ammunition in your pocket with this semi-guidance you're providing us.

Well, I don't think I'm keeping it there on purpose. It's what I see right now. Understand, we only have so much inventory. As we've committed, we're not speculating outrageous amounts. And there's only so much growth. If people move it up from July, which is usually a big shipping month to June, there's usually not enough book for October to move into September to make up the difference wholly. So while it's possible we could be higher certainly, and we do look for things to continue, right now, in the 600 range, maybe be slightly higher, is certainly a nice comfortable place for us to be. Sam Poser - Sterne Agee & Leach Inc., Research Division: And as far as your retail stores go, I mean, you comped -- you actually have almost the same comp comparison from last year in Q2 that you had in -- in Q3 than you had in Q2. I mean, do you see slowing down of that momentum? Or do you think that momentum in the retail is going to continue?

Well, I think it can continue. When we look forward into the quarter, we think we're getting into low-single-digit comp stores in the United States simply because of size. And last year, we comped up so significantly. I mean, you can't comp -- keep continuing to comp up double digits on double digits on double digits, and it's an item. I mean, there are some rules there. What we do see, however, is significantly higher comps on our International stores, predominantly Europe and Japan. So that gives us confidence that the international portion, which is by far the smaller portion, will continue to grow and may tick up the pace as we get to the back half of the year. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay. Two last things. One on the backlog. Could you give us some more details there? And then just as far as the domestic and international wholesale, I mean, the international also blew your expectations away. I mean, if you were to weight out those two, the kind of increases, I mean, are you still expecting more -- are you still going to continue to expect better growth out of international when we look into the quarter?

You mean better than Q2? Or better than... Sam Poser - Sterne Agee & Leach Inc., Research Division: No, better than domestic. I guess, it's going to outpace domestic still?

I do believe it will continue to outpace domestic certainly as it gets up and running as inventory becomes available in all of the sales groups comp. I was not as much surprised by the distributors, although the order of magnitude was certainly larger, so was by the subsidiaries. We've had many conversations with most out there. That second quarter is just not a big subsidiary business. The fact that we moved a lot of shipments into June in Europe and around the world is just how strong the product was, and people who found themselves very, very short as businesses came back from pretty steep declines, which is what happened in Europe. We had, by far, the best June we've ever had, and that's certainly was a surprise. And certainly, I do believe that, that will continue into the third quarter and into the back half of the year. We have no reason especially with the way our stores are behaving over there. When you start talking about 25% comp and 30% comp, even with the number of stores we have there, that's pretty significant and does lead me to believe that international, because of its size and it's under-penetration to date, will and may accelerate into the back half of the year, and next year outperform on a percentage basis the domestic business. Sam Poser - Sterne Agee & Leach Inc., Research Division: And then more color on the backlog, like the magnitude of it?

It's double digits. It's not as high as it was December 31, but that's not surprising given how much move from July to June. If that hadn't moved our backlogs would have been higher than they were December 31. So we're sitting in a very good place, and I think what leads me to believe that it is a pull-forward is that our incoming order rates for July is running at a significantly faster pace than it was last July. Now keep in mind, July is not our strongest booking month. We really do break book in August. It's probably our biggest month of the year. But even with a month like July starting to accelerate that quickly leads me to believe that some of our customers do think that's going to be short when they get through Back-to-School.

Our next question comes from Jeff Van Sinderen from B. Riley. Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division: David, maybe you can just give us a little more in terms of the differences if there are any to call out between what kind of product is working in the EU versus what's working in the U.S. And now obviously, GOwalk and a number of GOrun and others are working well in the U.S. and comfort product. But maybe can just call out any differences in EU.

We had no major differences. While there are always some nuances within a country, the major performers for us, both in the GO platform and in the Sport and Active platform, continue to be in the same family around the world. That's what makes this so successful and makes us believe that we're on the right target. Comfort is working. In all actuality, while we focus on GO -- and GO is a great platform for us, and we'll continue to grow and possibly take us to the next level -- our Sport Active and Sport footwear outside of the GO platform is actually growing, even though it's a larger business, at a faster rate around the world than the GO platform. So we seem to be hitting on multiple product categories within each operating group we have. Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division: Okay. And then how should we think about gross margin going forward? I mean, it's been pretty solid. There's -- you're seeing increases. Should we think that it is kind of flattish from here based on what you've been doing? Or is there still more room to increase?

Well, I hate to keep saying there's no more room. There might be a little bit of room. We did have slight increases within the divisions -- or almost across all divisions in this quarter. I think the big increase you saw from last year -- and the reason it was slightly higher was a better mix. I mean, because we are so popular in sport, our sport business domestically grew faster than -- our adult business grew faster than kids, so that's a positive piece of it. Our international business and China business where there's more retail, and European business grew at a faster pace than our domestic wholesale, which is a lower margin. So I think the mix was to our benefit. And to the effect that, that international will grow at a faster pace, I think that could continue. So we're pretty happy with the margins within our operating units. And I think to be positive would be a mix change, to be any more significantly positive. Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division: Okay. And then any more color you can add on the Kids business? Or also, I don't know, if there's anything new to say about BOBS?

Both those businesses, by the way, grew -- this year, BOBS is relatively flat. But we've gotten a lot of better sell-throughs and a lot of pickup in our backlog adding Memory Foam and comfort to those shoes. So we think they'll be positive as we go to the back part of the year. Kids certainly had an increase. I mean, they had a double-digit increase. It's just sort of slower than the adult business and our international business. So everything is positive. We have very few negatives in our overall portfolio. Just some are growing faster than others.

Our next question comes from Christopher Svezia from Susquehanna.

This is John Weiss [ph]. I'm in for Chris Svezia today. My first question is a follow-up on Europe. Are there any areas that are still challenging for you guys?

Certainly, there are areas that are challenging. I mean, obviously, the biggest is not part of our own business but part of our distributors, Greece, which is coming back a lot slower, but it's also a distributor. It's fair to say that all our European subsidiaries were positive for the quarter, some more than others, and they're all getting better. Now obviously, Spain and Italy are tougher than England and Germany, where we were bigger, and the market places are better. But we're not having what you call -- I guess, it can always be better, but we're up significantly in every marketplace in Western Europe that we are -- have subsidiary business. And our backlogs are up even more significantly as we go to the back half of the year.

Great. And so inventories look good. And despite the shift, I guess, do you feel retailers are short of product heading in to Back-to-School?

We won't know that until they get to Back-to-School. I think we continue to accelerate from here, and I don't think they're going to have any inventory issues. I think the fact that they took it early is because there were good sell-throughs going into the season, and no one wanted to be short at the end of June going into July to begin with, because it was a very strong last week or 10 days of June in shipping. Sure, I'd like to believe they're all going to be short, significantly short, because I think the product resonates, and we should get more shelf space. But we'll see how that plays out as we go through the season.

Great. And lastly, nice strength in pricing with the 4% increase. Can we expect that same strength throughout the rest of the year?

I think for this year, you could see it because there's new product that we have that resonates that we're selling well. We'll continue the same as the back end of the second quarter.

Our next question comes from Scott Krasik from Buckingham Research. Scott D. Krasik - The Buckingham Research Group Incorporated: Just some clarifications. So first on the shift. I think you've said that in the past, it's like $40 million to $50 million is potentially at play? So I'm just wondering how much you think actually shifted out of July back into June.

I think it was somewhat less than half that number. I think that's the maximum number that could shift from one way or another. We barely rarely get all of one. I think it was very close to half that number. Scott D. Krasik - The Buckingham Research Group Incorporated: Okay. Now that's helpful. And then just to clarify again, because you're being a little coy on the backlog. At the end of the fourth quarter, at the beginning, it was up 30%. So you said it was up double digits but less than 30%, that's kind of a wide range.

Yes. That's, what, 10% to 30%. It's in the mid- to high-20s, more so. Scott D. Krasik - The Buckingham Research Group Incorporated: Okay. Now that's helpful. And then domestically, specifically, is it much different in your backlog than international?

International is up more than domestic, but they're not significantly different. I mean, some international, it's just a smaller piece of the business so it drags it up. But yes, international is up higher. Scott D. Krasik - The Buckingham Research Group Incorporated: Okay. And then I would assume that you're not thinking that distributors are going to grow at the rate they grew this quarter. So aren't they actually a drag on your gross margins so you should actually see better gross margin? Scott D. Krasik - The Buckingham Research Group Incorporated: Well, they are somewhat of a drag on our gross margin, but there's certainly a net plus to the operating margin, which we're more interested in. I think that distributors still have an easy comparisons for the back half of the year. Second quarter is one of the strongest, but I wouldn't be surprised if we see the same kind of growth in the fourth quarter, which is another strong quarter for our distributor base and a much easier comp from last year. Scott D. Krasik - The Buckingham Research Group Incorporated: Okay. But just from a mix perspective, the gross margin should be very, very strong in the third quarter as well?

Yes. I don't see any deterioration. So depending on how the mix plays out, we could get a little higher or lower. But we're in a great shape at this rate anyway. Scott D. Krasik - The Buckingham Research Group Incorporated: Okay. And then just any thoughts in terms of the level of spending on selling expenses next couple of quarters?

Yes. Like I said, I think I said in my prepared -- or to some question, I don't know, we expect that it will leverage in the third quarter. If you look at the 6 months combined, there was a significant leveraging year-over-year as far as the advertising piece is concerned. And that was because of the shift. It'll level out in Q3, so I would anticipate that we would get leverage on the advertising piece in Q3. Scott D. Krasik - The Buckingham Research Group Incorporated: I think that was a first, somebody asked you to spend more money on marketing.

[Operator Instructions] Our next question comes from Corinna Freedman from Wedbush Securities. Corinna L. Freedman - Wedbush Securities Inc., Research Division: I was just wondering if you can parse out the backlog domestic versus international. Could you give us some color there? Are they both...

Well, the backlog is predominantly driven by wholesale because it's so much larger. It's 3x the size, so you can only move it so much. The differential to the overall backlog to domestic backlog is kind of small. It can't move by 3% or 4% one way or another unless international gets outrageously strong. So they're not that significantly different. They wouldn't -- if we were to rate them and give you an average, they wouldn't be significantly different. Corinna L. Freedman - Wedbush Securities Inc., Research Division: Okay. And then just trying to reconcile your comments about the pull-forward, with July also being very strong. So I'm just trying to understand what percentage of your orders do you normally get in August during the quarter.

August is a big booking month because of our shows and because the availability of product for spring. It just happens to be the biggest booking month. It really doesn't have anything to do with necessarily with the third quarter unless we're booking half ones and fill-in business, and it's -- August is predominantly for spring. So when you get to the show and you get your channel checks there and see how people are doing for spring and how well they're booking, that would be precursor to Q -- maybe December, but certainly for Q1. Corinna L. Freedman - Wedbush Securities Inc., Research Division: Okay. And is there anything you can tell us about your loyalty program that you just launched, the Skechers Lead. Is it international? If you can give us some color there...

No. It's predominantly domestic. We tested it here. We do everything here before we go out because it's -- there's -- it's a lot easier for us to do. So the loyalty program and the omni-channel, which we're very excited about, which will give our stores the capacity to order from our warehouse online through -- in case they're short of inventory or colors or anything like that. We think it's a major opportunity for us, and that just went into effect. So we think both of those things will also be very positive as far as comp stores are concerned as we go through the back half of the year and into first quarter.

Our next question comes from Yoshi Saharan [ph] from Sidoti & Company.

My first question is due to the popularity of your products being in the mix, being towards advanced orders as opposed to at-once, is there -- can we think about any impact on gross margins?

I don't know that, that's a gross margin issue. At-once orders, unless they're closed out, don't sell at a different price than the backlog. We don't give significant discounts. It's a matter of getting online and getting the production allocated. So I don't know that there's enough available to make a big dent in gross margin in this quarter as we go forward.

Okay. And what is typically being your at-once orders? For Q3 being...

Well, we have to get through a definition of what we consider at-once and what's not. But historically, it can be anywhere from 15% to 30%.

Okay. And in terms of...

Remember that 15% to 30% are only the wholesale business. Now you can't count the overall volume in the retail stores and things like that so...

Okay. And in terms of the pricing we saw, is that predominantly because there's less discounts? Or is that more towards your -- is that more towards because of the product mix?

I think it's the product mix and what we put in our product. We find that the brand has a big following, and people enjoy it. And if you put extra items into it that add to look or comfort or perceived value, we have significantly less resistance to price. So we've taken advantage some of that and have built them. So we think we're giving a better product and are getting more for it, which all works quite well for us and the brand.

Okay. Apart from the athlete endorsements, what channels specifically work for the performance line?

Every place we put it. I mean, now obviously, the best places is in the running shops. It gets a lot of awards, and it's getting a very big following and competes very well, gets high marks against all the other technical running shoes in the marketplace.

We have time for one final follow-up question coming from the line of Sam Poser. Sam Poser - Sterne Agee & Leach Inc., Research Division: Yes. I just want to follow-up on the G&A part for a sec, David. I mean, when you -- you did $164 million in the second quarter, and you pulled goods forward. Do you expect your G&A to be higher in Q3 unlike in absolute dollars? Or is that a higher number you're going to get to this year?

It depends on how many pairs we ship. It could be somewhat higher because we're still going to ship more pairs in the third quarter than the second quarter, and Europe will be significantly larger, and we're not as efficient this year, although we will leverage it next year. And obviously, we continue to grow in places like China and Japan. So depending on their growth and its differential between Q3 and Q2 oppose to how much additional we need going forward.

At this time, I will turn the call back over to SKECHERS for closing comments.

Thank you, again, for joining us on today's call. We would just like to note that today's call may have contained forward-looking statements. As a result of various risk factors, actual results could differ materially from those projected in such statements. These risk factors are detailed in SKECHERS' filings with the SEC. Again, thank you, and have a great day.