Skechers Posts Record Sales In 1Q; Results Beat Estimates

Skechers USA Inc. posted record quarterly results in 1Q with sales of $1.43 billion up 15% year-on-year and beating consensus estimates of $1.35 billion. The footwear company reported adjusted diluted EPS of $0.68 that came in ahead of analysts’ estimates of $0.49 per share.

Skechers (SKX) CEO, Robert Greenberg said, “Skechers new sales record in the first quarter is a remarkable achievement, especially given the lockdown measures in many key countries, including across Europe. This significant growth is the result of continued demand for Skechers product as consumers desire comfort and quality in their footwear and walking remains a top COVID-19 pandemic activity.”

“With warmer weather and increased vaccination rates around the world, traffic is improving in many of our retail stores, and our digital business continues to be a very strong growth driver. In the first quarter, we increased our marketing efforts in the United States and supported many open international markets, including the airing of new campaigns…” Greenberg added.

The record sales in 1Q were driven by a 20.2% year-on-year rise in international sales and an 8.5% growth in domestic sales. The increase in domestic sales was largely fueled by a year-on-year jump of 143% in e-commerce sales. (See Skechers stock analysis on TipRanks)

For FY21, SKX expects sales to land between $5.8 billion and $5.9 billion and diluted EPS in the $1.80 to $2 range. In the fiscal second quarter, SKX has forecast sales between $1.45 billion and $1.50 billion and diluted EPS of between $0.40 and $0.50.

Following the earnings, Morgan Stanley analyst Kimberly Greenberger upgraded the stock from a Hold to a Buy and raised the price target from $44 to $56. Greenberger commented, “SKX reported impressive 1Q21 results. It also delivered on all of the items we were looking for to upgrade the stock: improved EBIT flow-through, P&L visibility, & a more balanced mgmt. compensation structure.”

Shares of SKX have rallied 15.8% in the past five days.

Overall, consensus on the Street is that SKX is a Moderate Buy based on 8 Buys, 1 Hold and 1 Sell. The average analyst price target of $52.11 implies that the stock is fully priced at current levels.

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