We remain impressed with the year-over-year growth in the top and bottom lines that Skechers U.S.A., Inc. ( SKX ) witnessed during the first quarter of 2014, owing to strong sales across its domestic and international wholesale operations, and company-owned retail businesses.
Skechers witnessed the second straight quarter of positive earnings surprise of 84.9%, after registering an earnings beat of 64.7% in the fourth quarter of 2013. The first-quarter 2014 earnings of 61 cents a share beat the Zacks Consensus Estimate of 33 cents, and rose over fourfold from 13 cents in the prior-year quarter.
The improved results were owing to strong top-line growth, effective cost management and a shift in a portion of the advertising expenses to second quarter as Easter fell in April this year.
Increased demand for products, product innovation across multiple categories and healthy performance across all revenue channels led to a 21% rise in revenue to $546.5 million in the quarter, which surpassed the Zacks Consensus Estimate of $507 million.
The domestic wholesale business marked a revenue increase of 20.7%, international business revenue surged 26.3% and retail business sales, on a combined basis, grew 15.9%.
With 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 throughout 2014. Skechers, through its distribution networks, subsidiaries, and joint ventures, is poised to expand its global reach in the footwear market with demand remaining strong.
Skechers continues to offer a diversified portfolio of brands that include a wide range of fashion, athletic, non-athletic, and work footwear 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.
Currently, Skechers sports a Zacks Rank #1 (Strong Buy).
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