Bullish View on Skechers - Analyst Blog


We upgraded our long-term recommendation on Skechers USA Inc. ( SKX ), the footwear retailer, to Outperform with a target price of $30.00.

Why the Reiteration?

Skechers continues to offer a diversified portfolio of brands at compelling prices. We believe that 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 its customers. Management remains committed to focus on innovative products, opening of additional stores and increasing distribution channels with the development of international distribution agreements to improve its sales and profitability.

We remain impressed with the year-over-year growth in the top and bottom lines that Skechers witnessed during the third quarter of 2013, owing to strong sales across domestic and international wholesale operations, and company-owned retail and e-Commerce businesses. This Zacks Rank #3 (Hold) stock, which competes with Nike, Inc. ( NKE ), stated that the quarterly earnings of 53 cents a share increased over twofold, whereas revenues rose 20.1%.

We believe with more emphasis on the new line of products, cost containment efforts, inventory management, global distribution platform and strong backlogs, Skechers remains well positioned to sustain the growth momentum in 2014.

Skechers, through its distribution networks, subsidiaries and joint ventures, is poised to enhance its global reach in the footwear market with the demand remaining strong.

Other Stocks that Warrant a Look

Other better-ranked stocks in the retail sector worth considering include, Deckers Outdoor Corporation ( DECK ) and Gildan Activewear Inc. ( GIL ) both carrying a Zacks Rank #2 (Buy).

DECKERS OUTDOOR (DECK): Free Stock Analysis Report

GILDAN ACTVWEAR (GIL): Free Stock Analysis Report

NIKE INC-B (NKE): Free Stock Analysis Report

SKECHERS USA-A (SKX): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: DECK , GIL , NKE , SKX



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