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Skechers (SKX) Omnichannel Efforts Look Solid: The Road Ahead
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Skechers U.S.A., Inc.’s (SKX - Free Report) focus on boosting omnichannel growth via expanding the direct-to-consumer business and strengthening its foothold internationally appears commendable. Management has been directing SKX’s resources for a while to enhance its digital capabilities. It is also advancing its websites, mobile application and loyalty program. SKX has been gaining from growth in its domestic and international channels for a while now. In addition, sturdy demand for its comfort technology footwear remains a key driver. Shares of this designer and marketer of footwear have increased 15.6% in the past six months against the industry’s 9.6% decline.
Strategic Details
Skechers 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. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales. SKX has also been enhancing its distribution facilities and supply-chain production capabilities for sometime.
In second-quarter 2022, SKX continued the rollout of its new e-commerce platform, including the launch of sites in Belgium, the Czech Republic, Hungary, Italy, the Netherlands and Portugal. Management plans to launch two additional locations in Europe, two in South America and one in Japan. Skechers’ direct-to-consumer sales rose 4.3% in the reported quarter. Hence, management aims at accomplishing the $10-billion target in annual sales by 2026.
SKX’s international business remains a significant sales driver. Skechers is poised to enhance its global reach in the footwear market through its distribution networks, subsidiaries and joint ventures. In second-quarter 2022, international sales increased 10% year over year. Region-wise, sales increased 21% year over year to $1,033.9 million in the Americas and 8% to $374.5 million in EMEA. Strength in India, South Korea and Malaysia acted as key drivers.
Skechers’ diversified portfolio of brands includes a wide range of fashion, athletic, non-athletic, and work footwear at compelling prices. We believe that this multi-brand strategy enables it to roll out products and reach a wider range of customers. Additionally, SKX is focusing on comfort-based footwear and apparel products as consumers are embracing a relaxed lifestyle. These factors have been driving SKX’s overall sales for a while now.
What’s New?
Buoyed by the aforementioned catalysts, Skechers is likely to register top and bottom-line growth from the respective year-ago reported figures when it reports third-quarter 2022 earnings on Oct 25, after the closing bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,842 million, indicating growth of 18.4% from the prior-year quarter’s reported figure. The consensus mark for the quarterly earnings per share (EPS) stands at 74 cents, hinting at an improvement of 12.1% from the year-ago period’s tally. SKX has a trailing four-quarter earnings surprise of 8.2%, on average.
Our proven Zacks model predicts an earnings beat for Skechers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. SKX has a favorable combination of a Zacks Rank #3 and an Earnings ESP of +0.23% to beat on earnings this reporting cycle. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We believe that a greater emphasis on the new line of products, cost-containment efforts, inventory management and the global distribution platform are likely to keep driving SKX’s results ahead. (Read:Skechers to Report Q3 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.
Caleres, a footwear dealer, carries a Zacks Rank #2 at present. CAL has a trailing four-quarter earnings surprise of 34.9%, on average.
The Zacks Consensus Estimate for Caleres’ current financial year sales and EPS suggests growth of 5.6% and 0.9%, respectively, from the corresponding year-ago period’s readings.
G-III Apparel designs, sources and markets apparel and accessories under owned, licensed and private-label brands. The stock currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for G-III Apparel’s current financial-year revenues and EPS suggests growth of 13.8% and 8.2%, respectively, from the corresponding year-ago reported figures. G-III Apparel has a trailing four-quarter earnings surprise of 97.5%, on average.
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Skechers (SKX) Omnichannel Efforts Look Solid: The Road Ahead
Skechers U.S.A., Inc.’s (SKX - Free Report) focus on boosting omnichannel growth via expanding the direct-to-consumer business and strengthening its foothold internationally appears commendable. Management has been directing SKX’s resources for a while to enhance its digital capabilities. It is also advancing its websites, mobile application and loyalty program. SKX has been gaining from growth in its domestic and international channels for a while now. In addition, sturdy demand for its comfort technology footwear remains a key driver. Shares of this designer and marketer of footwear have increased 15.6% in the past six months against the industry’s 9.6% decline.
Strategic Details
Skechers 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. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales. SKX has also been enhancing its distribution facilities and supply-chain production capabilities for sometime.
In second-quarter 2022, SKX continued the rollout of its new e-commerce platform, including the launch of sites in Belgium, the Czech Republic, Hungary, Italy, the Netherlands and Portugal. Management plans to launch two additional locations in Europe, two in South America and one in Japan. Skechers’ direct-to-consumer sales rose 4.3% in the reported quarter. Hence, management aims at accomplishing the $10-billion target in annual sales by 2026.
SKX’s international business remains a significant sales driver. Skechers is poised to enhance its global reach in the footwear market through its distribution networks, subsidiaries and joint ventures. In second-quarter 2022, international sales increased 10% year over year. Region-wise, sales increased 21% year over year to $1,033.9 million in the Americas and 8% to $374.5 million in EMEA. Strength in India, South Korea and Malaysia acted as key drivers.
Skechers’ diversified portfolio of brands includes a wide range of fashion, athletic, non-athletic, and work footwear at compelling prices. We believe that this multi-brand strategy enables it to roll out products and reach a wider range of customers. Additionally, SKX is focusing on comfort-based footwear and apparel products as consumers are embracing a relaxed lifestyle. These factors have been driving SKX’s overall sales for a while now.
What’s New?
Buoyed by the aforementioned catalysts, Skechers is likely to register top and bottom-line growth from the respective year-ago reported figures when it reports third-quarter 2022 earnings on Oct 25, after the closing bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,842 million, indicating growth of 18.4% from the prior-year quarter’s reported figure. The consensus mark for the quarterly earnings per share (EPS) stands at 74 cents, hinting at an improvement of 12.1% from the year-ago period’s tally. SKX has a trailing four-quarter earnings surprise of 8.2%, on average.
Our proven Zacks model predicts an earnings beat for Skechers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. SKX has a favorable combination of a Zacks Rank #3 and an Earnings ESP of +0.23% to beat on earnings this reporting cycle. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We believe that a greater emphasis on the new line of products, cost-containment efforts, inventory management and the global distribution platform are likely to keep driving SKX’s results ahead. (Read:Skechers to Report Q3 Earnings: What's in the Offing?)
Eye These Solid Picks
Here we highlighted three better-ranked stocks namely, Designer Brands (DBI - Free Report) , Caleres (CAL - Free Report) and G-III Apparel (GIII - Free Report) .
Designer Brands designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.
Caleres, a footwear dealer, carries a Zacks Rank #2 at present. CAL has a trailing four-quarter earnings surprise of 34.9%, on average.
The Zacks Consensus Estimate for Caleres’ current financial year sales and EPS suggests growth of 5.6% and 0.9%, respectively, from the corresponding year-ago period’s readings.
G-III Apparel designs, sources and markets apparel and accessories under owned, licensed and private-label brands. The stock currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for G-III Apparel’s current financial-year revenues and EPS suggests growth of 13.8% and 8.2%, respectively, from the corresponding year-ago reported figures. G-III Apparel has a trailing four-quarter earnings surprise of 97.5%, on average.