Skechers U.S.A., Inc. (SKX) witnessed a sharp drop of almost 9.8% yesterday, after a market research revealed that sales of the footwear retailer declined 3% for the week ended Sep 20. This compares unfavorably with 19% growth registered in the trailing four weeks, according to the report. Market sources hinted that sales were hit hard with the back-to-school season concluding and held sluggish sales of children’s shoes responsible for the debacle.
If we look at the stock’s performance in the year, this Manhattan Beach, CA based company has surged over 70% before taking a nosedive yesterday. Analysts also pointed that the soft sales data for the week does not overshadow Skechers’ past outstanding performance.
For Skechers, 2014 has been an exceptional year. After a positive surprise of 84.9% in the first quarter, second-quarter earnings surpassed the Zacks Consensus Estimate by 65.9%. The quarterly earnings of 68 cents a share also rose substantially from 14 cents in the prior-year quarter. Increased demand for products, product innovation across multiple categories and healthy performance across all revenue channels led to a 37.1% rise in revenues to $587.1 million, which surpassed the Zacks Consensus Estimate of $505 million.
With more emphasis on the new line of products, cost containment efforts, inventory management, global distribution platform and strong backlog, management anticipates sustaining the growth momentum in 2014.
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 without cannibalizing its existing brands and helps in expanding the targeted demographic profile of customers.
Skechers currently holds a Zacks Rank #1 (Strong Buy).
Other Favorably Ranked Stocks
Other stocks favorably ranked stocks include Brown Shoe Co. Inc. (BWS), Iconix Brand Group, Inc. (ICON) and Foot Locker, Inc. (FL) all carrying a Zacks Rank #2 (Buy).
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