Yahoo Finance Skechers (SKX) Omnichannel Initiatives Appear Robust
Skechers U.S.A., Inc. SKX looks well-poised for growth, thanks to its focus on boosting omnichannel growth via expanding the direct-to-consumer business and enhancing its international foothold. SKX has been gaining from growth in its domestic and international channels for a while. In addition, continued global demand for its Comfort Technology footwear remains a key driver. These initiatives have aided this Zacks Rank #3 (Hold) stock to increase 19.7% in the past six months, outperforming the industry’s 6% growth.
Let’s Delve Deeper
Skechers has been directing resources to enhance its digital capabilities along with the advancement of its websites, mobile application and loyalty program. Management has updated its point-of-sale systems to better engage with customers, both offline and online. Initiatives such as “Buy Online, Pick-Up in Store” and “Buy Online, Pickup at Curbside” are worth mentioning. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales. In addition, Skechers has been enhancing its distribution facilities and supply-chain production capabilities.
We note that a solid double-digit increase in the digital commerce channels aided domestic DTC sales growth in the third quarter of 2022. During the reported quarter, Skechers continued the rollout of its e-commerce platform. Management launched e-commerce sites in Poland, Switzerland and Japan. It intends to launch more e-commerce sites in the coming year.
Skechers continues to offer a diversified portfolio of brands that includes 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 and reach a wide range of customers. Additionally, the company is focusing on comfort-based footwear and apparel products as consumers are embracing a relaxed lifestyle.
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Furthermore, Skechers’ international business remains a significant sales driver for the company. The company is poised to enhance its global reach in the footwear market through its distribution networks, subsidiaries and joint ventures. In third-quarter 2022, international sales increased 24.6% year over year. Region-wise, sales increased 16.2% year over year to $948 million in the Americas and 47.6% to $469.8 million in EMEA. The metric grew 8.6% year over year to $460.6 million in APAC.
We believe that a greater emphasis on the new line of products, cost-containment efforts, inventory management and the global distribution platform is likely to keep driving SKX’s results ahead. Skechers had envisioned fourth-quarter 2022 sales between $1.725 billion and $1.775 billion and earnings of 30-40 cents a share. In the earlier year, the company posted sales of $1.77 billion and earnings per share of 34 cents.
Stocks to Consider
Here we have highlighted three better-ranked stocks, namely, Designer Brands DBI, Delta Apparel DLA and Caleres CAL.
Designer Brands designs, manufactures, and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and earnings per share (EPS) suggests growth of 5.2% and 4.7%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 32%, on average.
Delta Apparel is a manufacturer of active wear and lifestyle apparel products. DLA has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales suggests growth of 6.3% from the year-ago corresponding figure. DLA has a trailing four-quarter earnings surprise of 7%, on average.
Caleres, a footwear dealer, has a Zacks Rank of 2 at present. CAL has a trailing four-quarter earnings surprise of 26%, on average.
The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.7% and 1.6%, respectively, from the year-ago corresponding figures.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
Caleres, Inc. (CAL) : Free Stock Analysis Report
Delta Apparel, Inc. (DLA) : Free Stock Analysis Report
Designer Brands Inc. (DBI) : Free Stock Analysis Report
