We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Skechers Marches Ahead of the Industry: What's Driving It?
Read MoreHide Full Article
Skechers U.S.A., Inc. (SKX - Free Report) with its strategic endeavors has been able to sustain momentum. Effective inventory management, well-knit global distribution, cost containment efforts and greater emphasis on introducing new products bode well for this Zacks Rank #3 (Hold) stock.
Moreover, the company’s shares have been performing better than the Zacks categorized Shoe & Retail Apparel industry and the overall Consumer Discretionary sector in the past six months. In the said time frame, shares of Skechers increased 18.2% compared with the industry’s gain of 4.5%. On the other hand, the sector displayed growth of 11%.
Let’s have a detailed look into some of the factors that have been aiding Skechers’ growth and a few of the challenges that the company has been dealing with.
Diversified Portfolio & Strong International Business
Skechers follows a multi-brand strategy whereby it offers a wide range of products including fashion, athletic, non-athletic and work footwear at compelling prices. We believe that this multi-brand strategy enables the company to roll out new products without cannibalizing its existing brands.
Skechers international business remains a considerable sales growth driver with Europe being the significant market outside the U.S. The company’s international wholesale business revenues constituted 45.7% of total sales and advanced 16.8% during the first quarter of 2017. The company has undertaken expansion of its distribution networks, subsidiaries and JVs to further expand its global reach.
Other Growth Drivers
Skechers e-Commerce business has also contributed towards the company’s sales growth. The company currently operates e-Commerce sites in Chile, Germany and the U.K., and has plans to launch additional sites in Spain and Canada. Additionally, sustained efforts of cost containment, inventory management, product innovation and additional store openings have acted in the favor of the company.
Skechers portrays a healthy balance sheet with cash and cash equivalents of $607.8 million at the end of the first quarter of 2017. The company maintains lower long-term borrowings (net of current installments) of $68.8 million. The blend of ample liquidity and innovative products positions it to capitalize on future growth opportunities.
Comparison With Industry
A Few Concerns
A certain degree of apprehensions arose regarding Skechers’ bottom line performance. In the last four quarters, earnings per share have declined year over year. Further, the company did not provide an encouraging outlook for the second quarter of 2017. Moreover, we believe that the higher operating expenses and foreign currency translation have also been aspects of concern for the company.
Bottom Line
The company made a sharp come back in first-quarter 2017 delivering a positive earnings surprise, after three straight quarters of earnings miss. Moreover sales also came ahead of the estimate for the second quarter in row. We remain confident in the company’s ability to sustain momentum given its strong growth plans related with product development and business expansion.
Children's Place delivered an average positive earnings surprise of 36.6% in the trailing four quarters and has a long-term earnings growth rate of 8%.
Best Buy delivered an average positive earnings surprise of 33.8% in the trailing four quarters and has a long-term earnings growth rate of 11.8%.
Burlington Stores delivered an average positive earnings surprise of 22.6% in the trailing four quarters and has a long-term earnings growth rate of 15.9%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Skechers Marches Ahead of the Industry: What's Driving It?
Skechers U.S.A., Inc. (SKX - Free Report) with its strategic endeavors has been able to sustain momentum. Effective inventory management, well-knit global distribution, cost containment efforts and greater emphasis on introducing new products bode well for this Zacks Rank #3 (Hold) stock.
Moreover, the company’s shares have been performing better than the Zacks categorized Shoe & Retail Apparel industry and the overall Consumer Discretionary sector in the past six months. In the said time frame, shares of Skechers increased 18.2% compared with the industry’s gain of 4.5%. On the other hand, the sector displayed growth of 11%.
Let’s have a detailed look into some of the factors that have been aiding Skechers’ growth and a few of the challenges that the company has been dealing with.
Diversified Portfolio & Strong International Business
Skechers follows a multi-brand strategy whereby it offers a wide range of products including fashion, athletic, non-athletic and work footwear at compelling prices. We believe that this multi-brand strategy enables the company to roll out new products without cannibalizing its existing brands.
Skechers international business remains a considerable sales growth driver with Europe being the significant market outside the U.S. The company’s international wholesale business revenues constituted 45.7% of total sales and advanced 16.8% during the first quarter of 2017. The company has undertaken expansion of its distribution networks, subsidiaries and JVs to further expand its global reach.
Other Growth Drivers
Skechers e-Commerce business has also contributed towards the company’s sales growth. The company currently operates e-Commerce sites in Chile, Germany and the U.K., and has plans to launch additional sites in Spain and Canada. Additionally, sustained efforts of cost containment, inventory management, product innovation and additional store openings have acted in the favor of the company.
Skechers portrays a healthy balance sheet with cash and cash equivalents of $607.8 million at the end of the first quarter of 2017. The company maintains lower long-term borrowings (net of current installments) of $68.8 million. The blend of ample liquidity and innovative products positions it to capitalize on future growth opportunities.
Comparison With Industry
A Few Concerns
A certain degree of apprehensions arose regarding Skechers’ bottom line performance. In the last four quarters, earnings per share have declined year over year. Further, the company did not provide an encouraging outlook for the second quarter of 2017. Moreover, we believe that the higher operating expenses and foreign currency translation have also been aspects of concern for the company.
Bottom Line
The company made a sharp come back in first-quarter 2017 delivering a positive earnings surprise, after three straight quarters of earnings miss. Moreover sales also came ahead of the estimate for the second quarter in row. We remain confident in the company’s ability to sustain momentum given its strong growth plans related with product development and business expansion.
Other Picks
Investors may consider better-ranked stocks such as The Children's Place, Inc. (PLCE - Free Report) , sporting a Zacks Rank #1 (Strong Buy) as well as Best Buy Co., Inc. (BBY - Free Report) and Burlington Stores, Inc. (BURL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place delivered an average positive earnings surprise of 36.6% in the trailing four quarters and has a long-term earnings growth rate of 8%.
Best Buy delivered an average positive earnings surprise of 33.8% in the trailing four quarters and has a long-term earnings growth rate of 11.8%.
Burlington Stores delivered an average positive earnings surprise of 22.6% in the trailing four quarters and has a long-term earnings growth rate of 15.9%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>