On Jul 31, we upgraded our recommendation on
Skechers U.S.A., Inc.
), the designer, marketer and distributor of footwear, to
Outperform, following better-than-expected second-quarter 2013
results. The company attained a Zacks Rank #1 (Strong Buy) status
on Jul 19.
Why the Upgrade?
Skechers showcased a strong operating performance during the
second quarter, marking a sharp recovery from a loss posted in
the year-ago quarter on the back of strong sales across
international wholesale and company-owned retail businesses.
The quarterly earnings came in at 14 cents a share compared
with a loss of 4 cents delivered in the prior-year quarter, and
handily surpassed the Zacks Consensus Estimate of 3 cents.
Increased demand of products and healthy performance across all
revenue channels led to an 11.5% surge in revenue to $428.2
million, which also came ahead of the Zacks Consensus Estimate of
The stronger-than-anticipated results triggered an uptrend in
the Zacks Consensus Estimates, as analysts become more
constructive on the stock's future performance. This is evident
from the movement witnessed in the Zacks Consensus Estimate that
surged 17% to $1.10 for 2013 and 20.4% to $1.83 per share for
2014 in the past 30 days.
With more emphasis on the new line of products, cost
containment efforts, inventory management and global distribution
platform, the company anticipates sustaining the growth momentum
in 2013. Moreover, Skechers expects to benefit from
back-to-school deliveries and projects significant growth for the
upcoming quarter as the demand for the company's products remains
Other Stocks to Consider
Apart from Skechers, the other stocks worth considering in the
Footwear & Accessories industry include
Brown Shoe Co. Inc.
) holding a Zacks Rank #1 (Strong Buy), and
Wolverine World Wide Inc.
Deckers Outdoor Corp.
), both carrying a Zacks Rank #2 (Buy).
BROWN SHOE CO (BWS): Free Stock Analysis
DECKERS OUTDOOR (DECK): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
WOLVERINE WORLD (WWW): Free Stock Analysis
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