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Skechers (SKX) Q4 Earnings: Disappointment in the Cards?
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Leading designer and marketer of footwear, Skechers U.S.A., Inc. (SKX - Free Report) is slated to report fourth-quarter 2016 results on Feb 9, 2017. The company missed the Zacks Consensus Estimate in two out of the trailing four quarters, with an average of 1.1%. Let’s delve deeper how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Skechers is likely to beat earnings estimates in the quarter under review. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Skechers has an Earnings ESP of 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at 11 cents. Moreover, the company carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing This Quarter
Soft domestic retail environment, stiff competition and foreign currency headwinds are the major concerns that weigh upon Skechers’ performance.
Further, the company’s top and bottom lines missed the Zacks Consensus Estimate for the second straight quarter when it reported the third quarter. Foreign currency adversities, rise in general and administrative expenses and higher effective tax rate hurt its bottom line in the quarter. In addition, the company’s domestic wholesale business remained a drag in the quarter. Moreover, the rate of sales growth in the third and second quarters diminished significantly from the first quarter.
We note that Skechers’ shares have declined nearly 12.4% in the past one year, clearly underperforming the Zacks categorized Shoes and Retail Apparel industry that dipped 4.6%.
However, Skechers’ multi-brand strategy enables the company to roll out new products, along with expanding its targeted demographic profile of customers. Further, management is focusing on the new line of products, cost containment efforts, inventory management and global distribution platform, which might prove to be the game changer, going forward.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Lululemon Athletica Inc. (LULU - Free Report) has an Earnings ESP of +0.99% and a Zacks Rank #2.
NIKE, Inc. (NKE - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #3.
Activision Blizzard, Inc. has an Earnings ESP of +2.78% and a Zacks Rank #3.
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Skechers (SKX) Q4 Earnings: Disappointment in the Cards?
Leading designer and marketer of footwear, Skechers U.S.A., Inc. (SKX - Free Report) is slated to report fourth-quarter 2016 results on Feb 9, 2017. The company missed the Zacks Consensus Estimate in two out of the trailing four quarters, with an average of 1.1%. Let’s delve deeper how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Skechers is likely to beat earnings estimates in the quarter under review. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Skechers U.S.A., Inc. Price and EPS Surprise
Skechers U.S.A., Inc. Price and EPS Surprise | Skechers U.S.A., Inc. Quote
Skechers has an Earnings ESP of 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at 11 cents. Moreover, the company carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing This Quarter
Soft domestic retail environment, stiff competition and foreign currency headwinds are the major concerns that weigh upon Skechers’ performance.
Further, the company’s top and bottom lines missed the Zacks Consensus Estimate for the second straight quarter when it reported the third quarter. Foreign currency adversities, rise in general and administrative expenses and higher effective tax rate hurt its bottom line in the quarter. In addition, the company’s domestic wholesale business remained a drag in the quarter. Moreover, the rate of sales growth in the third and second quarters diminished significantly from the first quarter.
We note that Skechers’ shares have declined nearly 12.4% in the past one year, clearly underperforming the Zacks categorized Shoes and Retail Apparel industry that dipped 4.6%.
However, Skechers’ multi-brand strategy enables the company to roll out new products, along with expanding its targeted demographic profile of customers. Further, management is focusing on the new line of products, cost containment efforts, inventory management and global distribution platform, which might prove to be the game changer, going forward.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Lululemon Athletica Inc. (LULU - Free Report) has an Earnings ESP of +0.99% and a Zacks Rank #2.
NIKE, Inc. (NKE - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #3.
Activision Blizzard, Inc. has an Earnings ESP of +2.78% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>