We upgraded our long-term recommendation on
Skechers USA Inc.
), the footwear retailer, to Outperform with a target price of
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
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
), 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
Deckers Outdoor Corporation
Gildan Activewear Inc.
) both carrying a Zacks Rank #2 (Buy).
DECKERS OUTDOOR (DECK): Free Stock Analysis
GILDAN ACTVWEAR (GIL): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis
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