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Add Skechers to Your Portfolio to Shrug Off Market Volatility

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Possibilities of a U.S.-China trade war have created a chaotic situation, and you might still be working out a strategy to deal with the ongoing scenario. Maybe looking for safe haven or hunting for rights stock to build up a stoic portfolio. To make your task a little less exhaustive, we try to bring your focus on one stock that deserves to be part and parcel of your kitty, Skechers U.S.A., Inc. (SKX - Free Report) . Shares of designer, developer, marketer and distributor of footwear is hovering in near its 52-week high, and we believe the stock has enough potential to create a new benchmark for itself.

A glimpse of share price movement reveals that it has surged roughly 58.1% in the past six months, outperforming the industry’s growth of 28.5%. Certainly, the company’s sound fundamentals, robust fourth-quarter 2017 results and a sturdy outlook have played a significant role behind this Zacks Rank #1 (Strong Buy) stock’s bullish run in the bourses.

Catalysts Working Behind the Stock  

We believe greater emphasis on new line of products, store remodeling projects, cost containment efforts, inventory management, and global distribution platform are the primary catalysts. Skechers’ domestic e-commerce business has also been the driving factor. It currently operates e-commerce sites in Chile, Germany and the U.K., and has launched additional sites in Spain and Canada.

Skechers’ international business remains a considerable sales growth driver for the company with Europe and China being the significant market outside the United States. The company is poised to enhance global reach in the footwear market through distribution networks, subsidiaries and joint ventures (JVs).

Skechers’ international wholesale business revenues, which constituted 41.5% of total sales, advanced 40.2% during the fourth quarter on the back of a 53.6% rise in wholly-owned subsidiary and JV businesses and 3.1% growth in distributor business. The company’s JV business registered growth of 58.9%.

Management now projects first-quarter 2018 net sales in the band of $1,175-$1,200 million compared with $1,072.8 million reported in the prior-year quarter. Additionally, the company anticipates earnings per share in the range of 70-75 cents compared with 60 cents delivered in the year-ago period.



Bottom Line

Skechers offer a diversified portfolio of brands that includes a wide range of 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 existing brands and helps to expand the targeted demographic profile of customers.

Looking for More? Check these 3 Trending Stocks

Guess? (GES - Free Report) delivered an average positive earnings surprise of 34.7% in the trailing four quarters. It has a long-term earnings growth rate of 17.5% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tailored Brands (TLRD - Free Report) delivered an average positive earnings surprise of 50.9% in the trailing four quarters. It has a long-term earnings growth rate of 16.5% and a Zacks Rank #2 (Buy).

G-III Apparel (GIII - Free Report) delivered an average positive earnings surprise of 41.2% in the trailing four quarters. It has a long-term earnings growth rate of 15% and a Zacks Rank #2.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>



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