Yahoo Finance Bull of the Day: Skechers (SKX)
Skechers U.S.A., Inc. SKX continues to give customers what they want: great shoes. This Zacks Rank #1 (Strong Buy) had record first quarter sales.
Skechers designs, develops and markets lifestyle and performance footwear, apparel and accessories for men, women and children. Its collections are available in 180 countries and territories through department and specialty stores, online, and at over 4,500 company, and third-party-owned, physical retail stores.
Big Beat in the First Quarter
On Apr 27, 2023, Skechers reported its first quarter 2023 results and crushed the Zacks Consensus Estimate by $0.41. It reported earnings of $1.02 versus the consensus of $0.61.
It was the third beat in the last four quarters.
Quarterly sales were a record, up 10% to $2 billion from $1.81 billion last year. Skechers saw broad strength in most markets globally, including regional sales improvements of 21% in both EMEA and APAC, which includes 3% growth in China.
Direct-to-Consumer increased 24.5% worldwide due to improved inventory availability in stores and strong demand for its new comfort product offering.
Gross margins expanded by 360 basis points to 48.9% from 45.3% last year.
Inventory, which has been the bane of many retailers, fell 17.4%, or $315.8 million, to $1.5 billion from Dec 31, 2022. Inventory levels decreased in AMER, EMEA and APAC.
Analysts Raise Full Year Estimates
Skechers gave 2023 earnings guidance of between $3.00 to $3.20.
The analysts had been too conservative. Business is hotter than they thought. 8 estimates for 2023 have been revised higher in the last 30 days. The Zacks Consensus has jumped to $3.14 from $2.93, which is in the higher end of the company's guidance range.
This is earnings growth of 31.9% over last year as the company made just $2.38.
The analysts are also bullish about 2024, with 7 estimates revised higher for next year too in the last month. The 2024 Zacks Consensus Estimate has jumped to $3.78 from $3.63. That's another 20.3% growth.
Shares at 5-Year Highs
It's been a wild ride for Skechers shares. They performed well during the pandemic and hit new highs in summer of 2021 before selling off the next 12 months.
But in the last year, the shares are up 41.3% and are back to those 2021 5-year highs.
Image Source: Zacks Investment Research
It's still attractively valued, with a forward P/E of 17.1.
Skechers doesn't pay a dividend, but it does have a share repurchase program. During the first quarter Skechers repurchased $30 million in shares. As of Mar 31, 2023, it had approximately $395.7 million remaining in the program.
If you're looking for a global retailer that has growth and is still a value, Skechers should be on your short list.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
