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Here's Why Skechers (SKX) Stock Has Rallied 33.9% in a Year
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Skechers U.S.A., Inc. (SKX - Free Report) appears commendable on the back of its robust business strategies. The company remains focused on boosting the omnichannel capabilities by expanding its direct-to-consumer (DTC) business and enhancing its international foothold. SKX has been making strategic investments to improve its worldwide infrastructure, primarily e-commerce platforms and distribution centers. Continued global demand for its comfort technology footwear is also yielding results.
Markedly, shares of this footwear leader have appreciated 33.9% against the industry’s 0.5% drop in the past year. This upside run is buoyed by the aforesaid tailwinds.
Let’s Dive Deeper
Skechers has been directing resources to enhance its digital capabilities, including augmenting website features, mobile applications and a loyalty program. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales. The company has updated its point-of-sale systems to better engage with customers, both offline and online. Initiatives such as “Buy Online, Pick-Up in Store” and “Buy Online, Pickup at Curbside” are worth mentioning.
The company has concluded the acquisition of its long-term Scandinavia distributor. We note that the acquisition of its long-term Scandinavia distributor has helped Skechers to build its brand in the Nordic region with stores and e-commerce platforms, and a network of wholesale customers in Finland, Sweden, Denmark and Norway.
Image Source: Zacks Investment Research
Management also remains focused on store expansion. In the second quarter of 2023, management opened 50 company-owned stores while closing 39 stores. Store openings consisted of 28 in China, eight of which were transferred from franchise to company-owned, eight big box stores in the United States, and three each in Chile and Vietnam. Also, it added 56 Skechers outlets in four Nordic countries and two stores in Germany from the acquisition of the company’s Scandinavian distributor. Furthermore, Skechers’ international business remains a significant sales growth driver.
What Else?
The aforesaid strengths have aided the company post sturdy results for second-quarter 2023, with the top and bottom lines outpacing the Zacks Consensus Estimate and improving year over year. Results gained from strength in brands and demand for comfort technology products, aided by solid marketing and distribution capabilities. Also, continued broad-based strength globally, mainly in the DTC unit, further drove the performance. We note that sturdy demand for comfort technology footwear, enhanced in-store product availability and effective demand creation resulted in 29% growth.
For 2023, management believes to accomplish sales between $7.95 billion and $8.1 billion compared with the earlier view of $7.9-$8.1 billion and $7.44 billion recorded last year. It envisions earnings per share (EPS) to be between $3.25 and $3.40 versus the prior expectation of $3.00-$3.20 and $2.38 delivered last year. Management expects the acquisition of the Scandinavia distributor deal to be slightly accretive to earnings in 2023. The company looks forward to achieving its goal of $10 billion in annual sales by 2026.
Analysts seem optimistic about the stock. The Zacks Consensus Estimate for Skechers’ 2023 sales and EPS is currently pegged at $8.1 billion and $3.38 each, suggesting respective growth of 8.7% and 42% from the corresponding year-ago reported figures. For 2024, the consensus estimate for sales and EPS stands at $8.91 billion and $3.95 each, indicating corresponding increases of 10.1% and 16.8% from the prior-year reported numbers.
To wrap up, this Zacks Rank #1 (Strong Buy) company is likely to continue performing well on the back of such sturdy endeavors. An expected long-term earnings growth rate of 28.3% further speaks volumes.
RCL has a trailing four-quarter earnings surprise of 28.5%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 54.5% and 180.3%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17.2% and 18.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.5% and 13.7%, respectively, from the year-ago corresponding figures.
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Here's Why Skechers (SKX) Stock Has Rallied 33.9% in a Year
Skechers U.S.A., Inc. (SKX - Free Report) appears commendable on the back of its robust business strategies. The company remains focused on boosting the omnichannel capabilities by expanding its direct-to-consumer (DTC) business and enhancing its international foothold. SKX has been making strategic investments to improve its worldwide infrastructure, primarily e-commerce platforms and distribution centers. Continued global demand for its comfort technology footwear is also yielding results.
Markedly, shares of this footwear leader have appreciated 33.9% against the industry’s 0.5% drop in the past year. This upside run is buoyed by the aforesaid tailwinds.
Let’s Dive Deeper
Skechers has been directing resources to enhance its digital capabilities, including augmenting website features, mobile applications and a loyalty program. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales. The company has updated its point-of-sale systems to better engage with customers, both offline and online. Initiatives such as “Buy Online, Pick-Up in Store” and “Buy Online, Pickup at Curbside” are worth mentioning.
The company has concluded the acquisition of its long-term Scandinavia distributor. We note that the acquisition of its long-term Scandinavia distributor has helped Skechers to build its brand in the Nordic region with stores and e-commerce platforms, and a network of wholesale customers in Finland, Sweden, Denmark and Norway.
Image Source: Zacks Investment Research
Management also remains focused on store expansion. In the second quarter of 2023, management opened 50 company-owned stores while closing 39 stores. Store openings consisted of 28 in China, eight of which were transferred from franchise to company-owned, eight big box stores in the United States, and three each in Chile and Vietnam. Also, it added 56 Skechers outlets in four Nordic countries and two stores in Germany from the acquisition of the company’s Scandinavian distributor. Furthermore, Skechers’ international business remains a significant sales growth driver.
What Else?
The aforesaid strengths have aided the company post sturdy results for second-quarter 2023, with the top and bottom lines outpacing the Zacks Consensus Estimate and improving year over year. Results gained from strength in brands and demand for comfort technology products, aided by solid marketing and distribution capabilities. Also, continued broad-based strength globally, mainly in the DTC unit, further drove the performance. We note that sturdy demand for comfort technology footwear, enhanced in-store product availability and effective demand creation resulted in 29% growth.
For 2023, management believes to accomplish sales between $7.95 billion and $8.1 billion compared with the earlier view of $7.9-$8.1 billion and $7.44 billion recorded last year. It envisions earnings per share (EPS) to be between $3.25 and $3.40 versus the prior expectation of $3.00-$3.20 and $2.38 delivered last year. Management expects the acquisition of the Scandinavia distributor deal to be slightly accretive to earnings in 2023. The company looks forward to achieving its goal of $10 billion in annual sales by 2026.
Analysts seem optimistic about the stock. The Zacks Consensus Estimate for Skechers’ 2023 sales and EPS is currently pegged at $8.1 billion and $3.38 each, suggesting respective growth of 8.7% and 42% from the corresponding year-ago reported figures. For 2024, the consensus estimate for sales and EPS stands at $8.91 billion and $3.95 each, indicating corresponding increases of 10.1% and 16.8% from the prior-year reported numbers.
To wrap up, this Zacks Rank #1 (Strong Buy) company is likely to continue performing well on the back of such sturdy endeavors. An expected long-term earnings growth rate of 28.3% further speaks volumes.
Eye These Solid Picks Too
Some other top-ranked companies are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Ralph Lauren (RL - Free Report) .
Royal Caribbean sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 28.5%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 54.5% and 180.3%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17.2% and 18.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.5% and 13.7%, respectively, from the year-ago corresponding figures.