Skechers USA Reports Q4 Beat, Shares Down 9% on Weak Guidance
Skechers USA (NYSE:SKX) shares fell more than 9% on Friday despite the company reporting its Q4 results, with EPS of $0.48 coming in better than the Street estimate of $0.36. Revenue increased 13.5% year-over-year to $1.88 billion, beating the Street estimate of $1.77 billion. Wholesale revenue increased by 15.7% and Direct-to-Consumer revenue increased by 10.8%.
Logistical challenges once again led to a miss in operating income, which came in at $87 million, compared to the Street estimate of $96 million. Management expects the company to incur some additional logistics costs over the next two quarters but to a much lesser extent than in fiscal 2022 (approximately $90 million). For Q1/23, the company expects revenue in the range of $1.80-$1.85 billion and diluted EPS in the range of $0.55-$0.60, significantly worse than the Street estimate of $0.86.
For fiscal 2023, the company expects revenue in the range of $7.75-$8.0 billion and diluted EPS of $2.80-$3.00.
| Symbol | Price | %chg |
|---|---|---|
| NKE.BA | 7840 | -0.51 |
| 7936.T | 2564 | 0 |
| 241590.KS | 7880 | 3.55 |
| METROBRAND.NS | 1345.85 | 0 |
UBS Reiterates Buy Rating on Skechers, Cites Potential for Earnings Surprises and Growth
UBS analysts reaffirmed their Buy rating on Skechers USA (NYSE:SKX), maintaining a price target of $88 on the stock. The analysts highlighted the potential for Skechers to exceed earnings expectations over the next twelve months, which could drive the stock higher. They believe Skechers is on track to reach $10 billion in revenue by 2026, solidifying its position as the world's third-largest footwear company. According to the analysts, the market currently undervalues the strength of the Skechers brand and its growth potential.
A recent meeting with Skechers management strengthened the analysts' confidence in their outlook. They project that Skechers will achieve an approximate 15% compound annual growth rate (CAGR) in EPS over the next five years. This level of growth could result in multiple positive earnings surprises in the near term, potentially pushing the stock toward the $88 price target.
Skechers USA Drops 6% on Weak Guidance
Skechers USA (NYSE:SKX) saw its stock plummet by more than 6% intra-day today following the announcement of its first-quarter sales, which did not meet expectations.
The company reported earnings per share (EPS) of $0.56, marginally surpassing the forecasted $0.55. Nevertheless, Skechers' quarterly revenue of $1.96 billion was below the consensus estimate of $2.04 billion.
For the full year, Skechers USA set its EPS forecast in the range of $3.65 to $3.85, significantly under the consensus of $4.18. The company also anticipates its annual revenue to fall between $8.6 billion and $8.8 billion, which is less than the expected $8.94 billion.
Looking into the first quarter, Skechers expects sales to range from $2.175 billion to $2.225 billion, compared to the consensus of $2.19 billion. The projected EPS for the quarter is between $1.05 and $1.10, below the anticipated $1.20.
Additionally, Skechers USA detailed its capital expenditure forecast for the year, estimating total investments to be between $350 million and $400 million.
Skechers USA Drops 6% on Weak Guidance
Skechers USA (NYSE:SKX) saw its stock plummet by more than 6% intra-day today following the announcement of its first-quarter sales, which did not meet expectations.
The company reported earnings per share (EPS) of $0.56, marginally surpassing the forecasted $0.55. Nevertheless, Skechers' quarterly revenue of $1.96 billion was below the consensus estimate of $2.04 billion.
For the full year, Skechers USA set its EPS forecast in the range of $3.65 to $3.85, significantly under the consensus of $4.18. The company also anticipates its annual revenue to fall between $8.6 billion and $8.8 billion, which is less than the expected $8.94 billion.
Looking into the first quarter, Skechers expects sales to range from $2.175 billion to $2.225 billion, compared to the consensus of $2.19 billion. The projected EPS for the quarter is between $1.05 and $1.10, below the anticipated $1.20.
Additionally, Skechers USA detailed its capital expenditure forecast for the year, estimating total investments to be between $350 million and $400 million.
Skechers Stock Upgraded to Overweight at Piper Sandler
Skechers USA (NYSE:SKX) received an upgrade from Piper Sandler analysts, who shifted the stock rating from Neutral to Overweight and raised the price target to $59 per share.
The analysts are more positive about Skechers' international business and believe it has the potential for medium-term earnings growth in the mid-teens.
Despite challenges in the U.S. wholesale market, strong direct-to-consumer trends indicate robust demand, which is expected to drive restocking. Additionally, Skechers is set to improve its gross margins, making it an appealing investment choice.
Skechers Stock Upgraded to Overweight at Piper Sandler
Skechers USA (NYSE:SKX) received an upgrade from Piper Sandler analysts, who shifted the stock rating from Neutral to Overweight and raised the price target to $59 per share.
The analysts are more positive about Skechers' international business and believe it has the potential for medium-term earnings growth in the mid-teens.
Despite challenges in the U.S. wholesale market, strong direct-to-consumer trends indicate robust demand, which is expected to drive restocking. Additionally, Skechers is set to improve its gross margins, making it an appealing investment choice.
Skechers Shares Plunge 9% on Q3 EPS Miss & Weak Guidance
Skechers USA (NYSE:SKX) shares dropped more than 9% today following the company’s reported Q3 results, with EPS of $0.64 coming in worse than the Street estimate of $0.73. Revenue was $1.88 billion, above the Street estimate of $1.81 billion.
The EPS miss was driven by an incremental $50 million from logistics costs (approximately $0.25 impact to EPS) in addition to FX headwinds ($106 million vs. its modeled $90 million) and COVID-related challenges in APAC, particularly China. Significant improvements in transit times along with strong demand led to capacity challenges and ultimately higher costs as the company worked to mitigate the impact to customers. This involved adding more labor and capacity to fulfill orders.
The company provided its Q4 outlook, expecting revenue to be in the range of $1.73-1.78 billion, worse than the Street estimate of $1.79 billion.
