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Malibu Boats has been on a tear lately, aided by a recent earnings beat and a strong tailwind in the recreational sports industry.
A strong U.S. economy, record low unemployment, rising wages and recent tax cuts have put Americans in a position to spend discretionary income on luxury items like boats, and spending they are, sending Malibu revenues through the roof and propelling the stock to a new 52-week high.
Malibu Boats manufactures and sells three line of boats, Malibu, Axis Wake Research and the recently acquired high performance brand Cobalt. It has the #1 position in market share for performance sport boats and it’s watercraft are widely used on lakes and rivers across the country for water skiing, wakeboarding, fishing and general recreation.
Surprise Earnings Beat
Reporting on May 2nd, Malibu reported Sales of $140M, a full 86% higher than the same quarter in 2017. Earnings came in at $0.89/share, beating the Zacks Consensus Estimate of $0.71/share.
CEO Jack Springer backed up the solid numbers with positive comments, saying, “This performance continues to be driven by robust retail demand in the United States along with Malibu’s operating efficiencies…We are executing very well, and as we march toward the end of the fiscal year, macro indicators suggest that the market for our products will stay strong.”
After a promising start to 2018, Footwear and Apparel maker Skechers has fallen on hard time in the last two weeks, shedding nearly 30% of its market value after issuing disappointing guidance with its Q1 earnings report.
First quarter results at Skechers were basically in line with estimates, with Skechers earning $0.75/share, exactly meeting the Zacks Consensus Estimate. Revenues and Operating income increased over the previous year by 17% and 20% respectively. In the official release, management tried to paint the recent performance as positive, pointing out the Q1’s $1.25B in sales was a new record for the company.
Disappointing Guidance
What analysts couldn’t get past, however was that Skechers forecast both lower revenues and earnings for Q2. Sales are expected to be inn the range of $1.12B to $1.14B and earnings were predicted to be between $0.38/share and $0.43/share.
Estimated quarterly sales estimate included a “shift in shipments from the second quarter to the back half of the year for several key international distributors and domestic accounts.” which was seen as an indication of softening demand for Skechers products.
Traditional Retail Model
Several analysts also questioned the logic of Skechers growing retail aspirations. With 2,600 retail stores worldwide, Skechers plans to open at least 450 more in the coming year. With most apparel manufacturers moving increasingly toward online sales and a reduced footprint in expensive brick and mortar retail locations, Skechers seems to be headed in the opposite direction, investing in new stores, but without an expectation of increasing revenues.
All five of the analysts covering Skechers in the Zacks Consensus lowered their estimates for 2018 in the past 30 days and the average now stands at $2.07/share, down from $2.30/share a month ago. Thanks to the slew of downgrades, Skechers is a Zacks Rank #5 (Strong Sell).
One potential bright spot for Skechers is that in Q1 they completed only $3M of a planned $150M share repurchase program leaving $147M available to buyback shares at the currently depressed price, though investors seem to think it’s too little too late.
Big Earnings Beats After Tuesday’s Close: DIS, TRIP & ETSY
Posting fiscal Q2 earnings results after the closing bell Tuesday, The Walt Disney Company outperformed estimates on both top and bottom lines, and rather significantly. Earnings of $1.84 per share was well in front of the $1.68 in the Zacks consensus, while revenues of $14.58 billion easily outpaced the $14.23 billion estimated, up 9% year over year. This also marks Disney's 5th positive earnings beat in its past 6 quarters.
The oft-maligned Media Networks division, which had felt the drag from cable cord-cutting as well as softer numbers at ESPN, beat expectations on both top and bottom lines. But the real news came from the Parks & Recreation and Studio Entertainment segments, which well-outperformed expectations in both sales and earnings. The Studio business, in particular, benefitted greatly from the successful release of the "Black Panther" feature film in the quarter. For more on DIS's earnings, click here.
Taking a big leg up in after-market trading Tuesday following its Q1 earnings release, TripAdvisor nearly doubled bottom-line expectations to 30 cents per share on revenues that soared to $378 million from the projected $361 million. The company reported User Reviews up 26% and Monthly Unique Visitors up 12% in the quarter, and the company raised its guidance figures. As a result, shares zoomed up 18% immediately upon the report being issued.
Ecommerce firm Etsy also doubled up expectations on its bottom line, posting 10 cents per share versus the 5 cents in the Zacks consensus. Revenues of $120.9 million edged past estimates, up almost 25% year over year. The company also ratcheted up guidance for its Gross Merchandise Sales category. For more on ETSY's earnings, click here.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Malibu Boats, Skechers, Walt Disney, TripAdvisor and Etsy as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 9, 2018 – Zacks Equity Research highlights Malibu Boats (MBUU - Free Report) as the Bull of the Day and Skechers (SKX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walt Disney Company (DIS - Free Report) , TripAdvisor (TRIP - Free Report) and Etsy (ETSY - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Malibu Boats has been on a tear lately, aided by a recent earnings beat and a strong tailwind in the recreational sports industry.
A strong U.S. economy, record low unemployment, rising wages and recent tax cuts have put Americans in a position to spend discretionary income on luxury items like boats, and spending they are, sending Malibu revenues through the roof and propelling the stock to a new 52-week high.
Malibu Boats manufactures and sells three line of boats, Malibu, Axis Wake Research and the recently acquired high performance brand Cobalt. It has the #1 position in market share for performance sport boats and it’s watercraft are widely used on lakes and rivers across the country for water skiing, wakeboarding, fishing and general recreation.
Surprise Earnings Beat
Reporting on May 2nd, Malibu reported Sales of $140M, a full 86% higher than the same quarter in 2017. Earnings came in at $0.89/share, beating the Zacks Consensus Estimate of $0.71/share.
CEO Jack Springer backed up the solid numbers with positive comments, saying, “This performance continues to be driven by robust retail demand in the United States along with Malibu’s operating efficiencies…We are executing very well, and as we march toward the end of the fiscal year, macro indicators suggest that the market for our products will stay strong.”
Bear of the Day:
After a promising start to 2018, Footwear and Apparel maker Skechers has fallen on hard time in the last two weeks, shedding nearly 30% of its market value after issuing disappointing guidance with its Q1 earnings report.
First quarter results at Skechers were basically in line with estimates, with Skechers earning $0.75/share, exactly meeting the Zacks Consensus Estimate. Revenues and Operating income increased over the previous year by 17% and 20% respectively. In the official release, management tried to paint the recent performance as positive, pointing out the Q1’s $1.25B in sales was a new record for the company.
Disappointing Guidance
What analysts couldn’t get past, however was that Skechers forecast both lower revenues and earnings for Q2. Sales are expected to be inn the range of $1.12B to $1.14B and earnings were predicted to be between $0.38/share and $0.43/share.
Estimated quarterly sales estimate included a “shift in shipments from the second quarter to the back half of the year for several key international distributors and domestic accounts.” which was seen as an indication of softening demand for Skechers products.
Traditional Retail Model
Several analysts also questioned the logic of Skechers growing retail aspirations. With 2,600 retail stores worldwide, Skechers plans to open at least 450 more in the coming year. With most apparel manufacturers moving increasingly toward online sales and a reduced footprint in expensive brick and mortar retail locations, Skechers seems to be headed in the opposite direction, investing in new stores, but without an expectation of increasing revenues.
All five of the analysts covering Skechers in the Zacks Consensus lowered their estimates for 2018 in the past 30 days and the average now stands at $2.07/share, down from $2.30/share a month ago. Thanks to the slew of downgrades, Skechers is a Zacks Rank #5 (Strong Sell).
One potential bright spot for Skechers is that in Q1 they completed only $3M of a planned $150M share repurchase program leaving $147M available to buyback shares at the currently depressed price, though investors seem to think it’s too little too late.
Big Earnings Beats After Tuesday’s Close: DIS, TRIP & ETSY
Posting fiscal Q2 earnings results after the closing bell Tuesday, The Walt Disney Company outperformed estimates on both top and bottom lines, and rather significantly. Earnings of $1.84 per share was well in front of the $1.68 in the Zacks consensus, while revenues of $14.58 billion easily outpaced the $14.23 billion estimated, up 9% year over year. This also marks Disney's 5th positive earnings beat in its past 6 quarters.
The oft-maligned Media Networks division, which had felt the drag from cable cord-cutting as well as softer numbers at ESPN, beat expectations on both top and bottom lines. But the real news came from the Parks & Recreation and Studio Entertainment segments, which well-outperformed expectations in both sales and earnings. The Studio business, in particular, benefitted greatly from the successful release of the "Black Panther" feature film in the quarter. For more on DIS's earnings, click here.
Taking a big leg up in after-market trading Tuesday following its Q1 earnings release, TripAdvisor nearly doubled bottom-line expectations to 30 cents per share on revenues that soared to $378 million from the projected $361 million. The company reported User Reviews up 26% and Monthly Unique Visitors up 12% in the quarter, and the company raised its guidance figures. As a result, shares zoomed up 18% immediately upon the report being issued.
Ecommerce firm Etsy also doubled up expectations on its bottom line, posting 10 cents per share versus the 5 cents in the Zacks consensus. Revenues of $120.9 million edged past estimates, up almost 25% year over year. The company also ratcheted up guidance for its Gross Merchandise Sales category. For more on ETSY's earnings, click here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.