Skechers USA Inc. (SKX) seems to be on a roll as the company’s shares hit yet another 52-week high of $63.56, yesterday and eventually closed at $62.78, amassing a year-to-date return of 86.2%. The company also hit a 52-week high of $63.06 on the previous day.
For Skechers, 2014 is turning out to be an exceptional year. After a robust first quarter performance, the company yet again came up with stellar second quarter results, and since then has been witnessing rising earnings estimates. Following the sturdy results, the Zacks Consensus Estimate for 2014 and 2015 increased by 26.2% and 20.8% to $2.60 and $3.25, respectively, in the last 60 days.
In fact, this Zacks Rank #1 (Strong Buy) stock has risen 29.7% since it released its second-quarter earnings on Jul 23, 2014.
The quarterly earnings came in at 68 cents a share that fared significantly better than the Zacks Consensus Estimate of 41 cents and the prior-year quarter earnings of 14 cents on the back of strong top-line growth and effective cost management.
Skechers is now showing signs of stability, having delivered positive earnings surprises for three successive quarters — 65.9% in the second quarter of 2014, 84.9% in the first quarter and 64.7% in the fourth quarter of 2013.
Further, increased demand for products and their innovation across multiple categories as well as a healthy performance across all revenue channels led to a 37.1% rise in net sales to $587.1 million in the quarter, which handily surpassed the Zacks Consensus Estimate of $505 million.
With more emphasis on a new line of products, increased backlog, cost containment efforts, inventory management and margin improvement, the company anticipates sustained growth momentum in 2014. We believe Skechers, through its distribution networks, subsidiaries and joint ventures is poised to enhance its global reach in the footwear market.
Also, Skechers, which competes with Deckers Outdoor Corp. (DECK) and Nike Inc. (NKE), portrays a healthy balance sheet with cash and cash equivalents of $414.8 million at the end of the second quarter of 2014. The blend of ample liquidity and innovative products position it to capitalize on future growth opportunities.
All the aforementioned factors underscore the company’s strong fundamentals and hint at a promising future for Skechers, instilling confidence among investors.
Apart from Skechers, Barnes & Noble, Inc. (BKS) also hit a 52-week high of $24.62 on Sep 9, 2014.
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