We maintain our long-term Neutral recommendation on
Skechers USA Inc.
), the footwear retailer, with a target price of $36.00.
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 to expand the
targeted demographic profile of 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 #2 (Buy) stock, which competes with
), stated that the quarterly earnings of 53 cents a share
increased over twofold, whereas revenue 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 growth momentum.
However, we still hold a somewhat conservative stance on the
stock given the lower-than-expected results and maintain our
unbiased view. Both the top and bottom lines of the company fell
short of the Zacks Consensus Estimate. The quarterly earnings
missed the Zacks Consensus Estimate by 13.1%, while revenue of
$515.8 million fell short of the Zacks Consensus Estimate of $519
Other Stocks That Warrant a Look
Other better ranked stocks in the retail sector worth
Deckers Outdoor Corp.
Steven Madden, Ltd.
), both which carry a Zacks Rank #2 (Buy).
DECKERS OUTDOOR (DECK): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
STEVEN MADDEN (SHOO): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
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