On Feb 18, we upgraded our recommendation on
Skechers U.S.A., Inc.
), the designer, developer and distributor of footwear and
apparel, to Outperform, following better-than-expected
fourth-quarter 2012 results. The company attained a Zacks Rank #1
(Strong Buy) status shortly after reporting impressive
Why the Upgrade?
Skechers is now showing signs of stability as evident from its
fourth quarter results. The quarterly earnings of 8 cents a share
fared far better than a loss of 54 cents delivered in the
prior-year quarter and the Zacks Consensus Estimate of a loss of
11 cents on the back of growth witnessed across domestic
wholesale, international, and company-operated retail
Following sturdy results, the Zacks Consensus Estimates for
the first and second quarters of 2013 rose by 4.3% and 21.4% to
24 cents and 17 cents, respectively in the last 7 days. For 2013
and 2014, the Zacks Consensus Estimates increased by 4.7% and
3.2%, to 89 cents and $1.28, respectively, over the same
With more emphasis on a new line of products, increased
backlog, cost containment efforts, inventory management and
margin improvement, the company anticipates sustaining growth
momentum in 2013. We believe Skechers, through its distribution
networks, subsidiaries and joint ventures is poised to enhance
its global reach in the footwear market.
Skechers continues to offer a diversified portfolio of brands
that includes a wide range of fashion, athletic, non-athletic and
work footwear at compelling prices. This multi-brand strategy
enables the company to roll out new products without
cannibalizing its existing brands and helps expand the targeted
demographic profile of customers.
Other Stocks to Consider
Other stocks worth considering in the apparel, footwear &
accessories industry are
Francesca's Holdings Corporation
). All the stocks hold a Zacks Rank #2 (Buy).
ADIDAS AG-ADR (ADDYY): Get Free Report
FRANCESCAS HLDG (FRAN): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis
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