Skechers USA Inc.

Skechers USA Inc. (SKW - Analyst Report) reported third-quarter results on Oct 21 that came in far ahead of expectations on strong international sales and margin expansion.

Company Description

Skechers USA Inc. designs and sells footwear for men, woman and children in the United States and internationally. The company was founded in 1992 and has a market cap of $1.13 billion.

Skechers has been competitive in the tough consumer environment of the last year, focusing on value and customer loyalty to drive sales. That dynamic showed up on Oct 21 when the company reported better than expected third-quarter results.

Third-Quarter Results

Sales were up marginally to $403.2 million, but earnings came in strong at 52 cents per share, 18 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 12 cents, or 195%.

COO David Weinberg said that Skechers' results were driven by strong international sales and "meaningful" margin expansion, with gross margin jumping to 45.3% from 42.5% last year. CEO Robert Greenberg added that the reaction by consumers to its fall product has been exceptional.

Estimates Jump

Estimates jumped on word of the good quarter, with the current year adding 23 cents and moving to 68 cents per share. The next-year estimate is pegged at $1.47, an amazing 117% growth projection.

Valuation

After the big run up in shares, this stock does look a bit pricey, trading with a forward P/E of 36X.

The Chart

Shares of SKX are up big since bottoming out just above $9 in early July, recently topping off above $25 to hit a new 52-week high. Take a look below.

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