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Skechers (SKX) Gains Momentum Following Stellar Q1 Results - Analyst Blog

Skechers USA Inc.SKX has been gaining momentum following its impressive first-quarter 2015 performance. Shares of this designer, developer, marketer, and distributor of footwear have surged roughly 31% since Apr 22 when the company announced its results. We believe that the company's strong fundamentals are capable of providing further impetus to the stock.

After delivering a negative earnings surprise of 2.3% in the final quarter of 2014, this Zacks Rank #3 (Hold) company commenced 2015 on an upbeat note. Although the first quarter was marred by foreign currency headwinds, adverse weather conditions and West Coast port-related dispute, the company delivered earnings of $1.10 per share that beat the Zacks Consensus Estimate by 8.9% and surged from 61 cents recorded in the year-ago quarter.

Net sales of $768 million steered ahead of the Zacks Consensus Estimate of $707 million and soared 40.5% from the prior-year quarter. The top line was driven by aggressive marketing initiatives, product innovation across multiple categories and healthy performance across all revenue channels. Moreover, the growth rate accelerated from 26.4% in the fourth quarter of 2014.

With increased focus on the new line of products, cost containment, inventory management, a global distribution platform and sturdy backlogs, the company remains confident of sustaining its growth momentum. However, cautious discretionary spending on the part of consumers due to macro-economic factors such as interest rate hikes, rise in fuel costs and unemployment levels, may act as an impediment.

Nevertheless, for the time being, Skechers is showcasing strength. This is also apparent from the upward movement in the Zacks Consensus Estimate over the past 30 days. The Zacks Consensus Estimate increased 6.5% to $4.23 per share for 2015 and 5.4% to $5.03 per share for 2016.

Favorably Ranked Stocks

Investors interested in the retail space may consider favorably ranked stocks such as Carter's, Inc. CRI , sporting a Zacks Rank #1 (Strong Buy), Deckers Outdoor Corp. DECK and Columbia Sportswear Company COLM , each carrying a Zacks Rank #2 (Buy).

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COLUMBIA SPORTS (COLM): Free Stock Analysis Report

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

DECKERS OUTDOOR (DECK): Free Stock Analysis Report

CARTERS INC (CRI): 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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