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Skechers Shares Marching High: Are You Considering? - Analyst Blog

Is Skechers USA Inc. ( SKX ) part of your portfolio? If not, then this is the right time to add the stock as it looks very promising. Moreover, the underlying factors are capable of carrying the momentum further.

The stock sports a Zacks Rank #1 (Strong Buy) and has surged roughly 19% year to date, demonstrating its inherent strength. The stock also hit a 52-week high of $67.13 last Friday. We believe that it could prove to be a solid bet for investors.

Skechers' primary strength is its earnings surprise history. The company has outperformed the Zacks Consensus Estimate in five out of the past seven quarters. In the last four quarters, this developer and distributor of footwear for men, women and children topped the Zacks Consensus Estimate by an average of 41.5%.

Skechers continued its superb financial run in the fourth quarter of 2014 as both top and bottom lines increased year over year. The improvement came on the back of strong sales across its domestic and international wholesale operations, and company-owned retail businesses.

The company posted earnings of 43 cents a share that soared 53.6% from the year-ago period. The company's solid earnings have raised optimism, leading to a positive momentum with respect to the Zacks Consensus Estimate, which increased 7.4% to $3.78 for 2015 and 8.5% to $4.71 for 2016 over the past 7 days.

Aggressive marketing initiatives, product innovation in multiple categories and healthy performance across all revenue channels led to a 26.4% rise in revenues to $569.7 million in the quarter that also surpassed the Zacks Consensus Estimate of $538 million. The domestic wholesale business marked a revenue increase of 24.3%, while international business revenues surged 37.9% and sales across company-owned retail outlets grew 22%.

With an increased focus on the new line of products, cost containment, inventory management, a global distribution platform and backlogs, the company is confident of sustaining the momentum. Skechers, through its distribution networks, subsidiaries and joint ventures, is poised to expand its global reach in the footwear market, with demand expected to remain strong.

Other Stocks That Warrant a Look

Other favorably ranked retail stocks that look promising and are expected to continue with their upbeat performance include Columbia Sportswear Co. ( COLM ), Gildan Activewear Inc. ( GIL ) and Lululemon Athletica Inc. ( LULU ), all carrying a Zacks Rank #2 (Buy).

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

COLUMBIA SPORTS (COLM): Free Stock Analysis Report

LULULEMON ATHLT (LULU): Free Stock Analysis Report

GILDAN ACTVWEAR (GIL): Free Stock Analysis Report

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


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

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