Skechers U.S.A., Inc. SKX is likely to register a decline in the top line when it reports second-quarter 2020 numbers on Jul 23, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $681.7 million, indicating a decline of 45.8% from the prior-year reported figure.
Further, the Zacks Consensus Estimate for second-quarter bottom line slipped to a loss of 65 cents from a loss of 62 cents over a month. The company had reported earnings of 49 cents a share in the year-ago period.
Notably, the company’s bottom line has outperformed the Zacks Consensus Estimate in the last reported quarter. This renowned footwear designer, marketer and distributor has a trailing four-quarter earnings surprise of 12.1%, on average.
Factors to Note
Skechers’ enhanced focus on new lines of products, cost-containment efforts, inventory management and global distribution platform bodes well. Notably, the company's e-commerce business has been contributing to its top line. The company’s efforts to expand global reach in the footwear market through its distribution networks, subsidiaries and JVs is also commendable. Certainly, Skechers’ international and direct-to-consumer businesses are primary catalysts.
However, the outbreak of coronavirus pandemic led to the temporarily closure of stores in both domestic and international regions. This is likely to have impacted the company’s top line performance in the quarter to be reported. Apart from these, concerns related to higher general & administrative expenses, unfavorable currency fluctuations and stiff competition cannot be ignored.
Nonetheless, we note that on its last earnings call, management informed that almost all its stores in China had begun operations.
Skechers U.S.A., Inc. Price, Consensus and EPS Surprise
Skechers U.S.A., Inc. price-consensus-eps-surprise-chart | Skechers U.S.A., Inc. Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Skechers this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Skechers carries a Zacks Rank #3 and an Earnings ESP of +28.83%.
Other Stocks With a Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
Big Lots (NYSE:BIG) BIG has an Earnings ESP of +11.8% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy BBY has an Earnings ESP of +44.52% and a Zacks Rank #3.
Costco COST has an Earnings ESP of +0.76% and a Zacks Rank #3.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft (NASDAQ:MSFT) in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Best Buy Co., Inc. (NYSE:BBY): Free Stock Analysis Report
Skechers U.S.A., Inc. (SKX): Free Stock Analysis Report
Big Lots, Inc. (BIG): Free Stock Analysis Report
Costco Wholesale Corporation (NASDAQ:COST): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research