Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Skechers Up More Than 23% In 6 Months: Growth Plans Pay Off

By Zacks Investment ResearchStock MarketsJun 10, 2019 10:05PM ET
www.investing.com/analysis/skechers-up-more-than-23-in-6-months-growth-plans-pay-off-200430492
Skechers Up More Than 23% In 6 Months: Growth Plans Pay Off
By Zacks Investment Research   |  Jun 10, 2019 10:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Skechers U.S.A., Inc. (NYSE:SKX) is focused on its new line of products, corporate upgrades and store remodeling projects, cost-containment efforts, inventory management, and global distribution platform. The company's domestic e-commerce business is also performing well. Such well-chalked plans have helped this Zacks Rank #3 (Hold) company gain 23.8% in the past six months, outperforming the industry’s growth of 11.7%.



That said, let’s delve deeper into the other factors aiding the stock.

A Brief Introspection

Although the stock came under pressure for a moment due to the third successive quarter of sales miss and soft second-quarter earnings view, it is now back on track. In this regard, solid performance in the international wholesale and the global retail businesses acts as a catalyst. Further, Skechers completed the transition of Indian joint venture to a wholly-owned subsidiary and entered a deal to form a joint venture in Mexico with its current distribution partner. Both investments are expected to be accretive to 2019 earnings.

Moreover, Skechers’ domestic e-commerce business registered an increase of 35.3% during the first quarter of 2019. This apart, the company is making efforts to boost sales and profitability. In sync with this, efforts toward product innovation, additional store openings and expanding distribution channels through distribution agreements bode well for the stock.

Skechers’ international business is a significant sales growth driver, with Europe and China being important markets outside the United States. Notably, the company witnessed sales growth of 9.3% during the first quarter of 2019 across its international business, representing 57.8% of total sales. Skechers’ international wholesale business grew 8.7%, while the direct-to-consumer business grew 13.2%. Management expects the international business to sustain growth momentum and increase at a mid-teen rate both in the second quarter and full-year 2019. However, the company is grappling with elevated general & administrative expenses. In the first, second, third and fourth quarters of 2018, general & administrative expenses rose 25.8%, 21.5%, 11.9% and 10%, respectively. During the first quarter of 2019, the same increased 1.2% on account of extra spending of $7.8 million to support continued growth in China and $8 million in retail to support the operations of 40 new stores, including 12 opened in the quarter. Persistence of this trend may weigh on margins in the near future.

Additionally, domestic wholesale business fell 10.9% during the first quarter of 2019, following a decline of 4.8% in the preceding quarter. As a result, Skechers witnessed a decline of 6.3% in its domestic business. Going ahead, management expects domestic wholesale business to be down mid-single digits in the second quarter and flat on a full-year basis.

All said, we hope that these above-mentioned strategies will help provide some support to Skechers’ top line in the near term.

3 Stocks to Bank On

Children’s Place (NASDAQ:PLCE) , with a long-term earnings per share growth rate of 8%, carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

L Brands (NYSE:LB) , with a long-term earnings per share growth rate of 11%, carries a Zacks Rank #2 (Buy).

Kering (PA:PRTP) SA (OTC:PPRUY) , with a long-term earnings per share growth rate of 10%, carries a Zacks Rank #2.

Will you retire a millionaire?

One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”

Click to get it free >>



Children's Place, Inc. (The) (PLCE): Free Stock Analysis Report

L Brands, Inc. (LB): Free Stock Analysis Report

Kering SA (PPRUY): Free Stock Analysis Report

Skechers U.S.A., Inc. (SKX): Free Stock Analysis Report

Original post

Zacks Investment Research
Skechers Up More Than 23% In 6 Months: Growth Plans Pay Off
 

Related Articles

Skechers Up More Than 23% In 6 Months: Growth Plans Pay Off

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email