Why Excellent Earnings Weren’t Enough for Skechers
Skechers shares plunged Friday even though it reported solid quarterly results late on Thursday.
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When Skechers USA Inc. (NYSE: SKX) reported its most recent quarterly results after the markets closed on Thursday, the company said that it had $0.75 in earnings per share (EPS) on $1.25 billion in revenue. The consensus estimates had called for $0.75 in EPS on revenue of $1.2 billion. The first quarter of last year reportedly had EPS of $0.60and $1.07 billion in revenue.
During this quarter, sales grew 16.5% as a result of a 17.9% increase in the international wholesale business, an 8.5% increase in the domestic wholesale business and a 26.4% increase in its global retail business.
At the same time, comparable same-store sales in company-owned stores worldwide increased 9.5%, including 7.0% in the United States and 17.6% internationally.
Although these quarterly numbers look very strong, they were ultimately outweighed by guidance. For the second quarter of 2018, the firm believes it will see sales in the range of $1.120 billion to $1.145 billion, and EPS of $0.38 to $0.43. Thomson Reuters consensus estimates for the second quarter call for $0.54 in EPS on $1.16 billion in revenue.
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Robert Greenberg, Skechers CEO, took a very optimistic approach to this report:
We truly felt 2017 was a banner year, but yet again we surpassed our expectations and hit a new quarterly sales record. With our men’s, women’s and kids’ product growing year-over-year and resonating with consumers globally, we believe our moment is now. We are experiencing the continued success of our men’s Skechers Sport, women’s sandals and men’s and women’s On the Go collections.
Shares of Skechers were last seen down 27% at $30.50, with a consensus analyst price target of $48.50 and a 52-week range of $22.64 to $43.08.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
