Skechers USA (SKX) AI Stock Analysis

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Skechers USA

(NYSE:SKX)

72Outperform

Skechers showcases a solid financial foundation with consistent growth and strong international sales. However, technical indicators suggest caution due to limited momentum and trading below key moving averages. The strategic acquisition by 3G Capital could bolster long-term growth prospects, but challenges in China and global trade uncertainties require careful attention. While the valuation is attractive, the lack of dividend and operational hurdles temper the overall positive outlook.

Positive Factors

Acquisition

The acquisition by 3G Capital offers a significant premium above Skechers' recent closing price, indicating a positive valuation for shareholders.

Global Expansion

Skechers holds a strong position as the third largest footwear brand globally with potential growth opportunities in value pricing, comfort technologies, and expansion in Asia.

Tariff Risk Mitigation

The geographic diversity of revenue, with 62% of revenue from outside the U.S., provides a structural advantage in mitigating tariff risk.

Negative Factors

Market Uncertainties

The decision to sell the company was influenced by uncertainties around tariffs, the macro outlook, and the challenges of navigating public markets.

Stock Downgrade

The stock of Skechers USA Inc has been downgraded to an Equal-weight rating with a $63 price target.

Tariff Exposure

The company's significant exposure to China tariffs and revenue could continue to weigh on its financial performance.

Skechers USA (SKX) vs. S&P 500 (SPY)

Market Cap

$9.27B

Dividend YieldN/A

Average Volume (3M)9.47M

Price to Earnings (P/E)14.9

Beta (1Y)0.83

Revenue Growth10.66%

EPS Growth9.44%

CountryUS

Employees10,100

SectorConsumer Cyclical

Sector Strength75

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)1.17

Shares Outstanding130,289,470

10 Day Avg. Volume19,236,212

30 Day Avg. Volume9,470,345

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)1.84

Price to Sales (P/S)0.00

P/FCF Ratio81.73

Enterprise Value/Market Cap1.12

Enterprise Value/Revenue0.29

Enterprise Value/Gross Profit2.16

Enterprise Value/Ebitda2.52

Forecast

1Y Price Target

$61.00

Price Target Upside-1.53% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering15

Skechers USA Business Overview & Revenue Model

Company DescriptionSkechers USA, Inc. (SKX) is a globally recognized footwear brand headquartered in Manhattan Beach, California. The company designs, develops, and markets a diverse range of lifestyle and performance footwear for men, women, and children. Skechers is known for its innovative products that combine style, comfort, and quality. The company operates in the footwear industry and offers a wide selection of casual, sport, and formal shoes, while also expanding into apparel and accessories.

How the Company Makes MoneySkechers USA generates revenue primarily through the sale of its footwear products. The company's revenue streams include wholesale, direct-to-consumer, and international sales. Wholesale revenue is derived from selling products to department stores, specialty retailers, and national chains, while direct-to-consumer sales occur through Skechers' owned retail stores and e-commerce platforms. International sales are a significant contributor to Skechers' earnings, with the company having a strong presence in many global markets. Additionally, the company benefits from strategic partnerships and licensing agreements that help expand its product offerings and market reach. Skechers continues to focus on innovation, marketing, and expanding its retail network to drive growth and profitability.

Skechers USA Key Performance Indicators (KPIs)

Any

Gross Profit by Type

Gross Profit by Type
Shows the profit made from different product lines, highlighting which types contribute most to profitability and where there might be opportunities or challenges.

Chart InsightsSkechers' wholesale gross profit shows significant growth, driven by strong market expansion, particularly in EMEA, despite challenges like declining China sales and foreign exchange impacts. Direct-to-consumer profits also increased, reflecting robust consumer demand and strategic market entries, such as in soccer and basketball. The company’s focus on expanding distribution centers in the U.S. and China suggests a commitment to sustaining this growth trajectory. However, rising inventory levels and macroeconomic pressures in China could pose risks to maintaining momentum.

Data provided by:

Main Street Data

Skechers USA Financial Statement Overview

Summary

Skechers demonstrates strong financial performance with consistent revenue growth and stable profitability margins. The company maintains a robust balance sheet, ensuring financial stability and manageable leverage. Although cash flow generation has faced slight challenges recently, the overall financial health remains solid.

Income Statement

Very Positive

Skechers has shown consistent revenue growth with a strong trajectory, increasing from $4.60 billion in 2020 to $9.13 billion in TTM (Trailing-Twelve-Months). Gross profit margins have been stable, reflecting efficient cost management, with the most recent TTM margin at approximately 52.46%. However, EBIT margin has slightly decreased to 9.53% in TTM from 10.08% in 2024, indicating some pressure on operational efficiency. Overall, profitability remains robust with a net profit margin of 6.96% in TTM.

Balance Sheet

Positive

The company's balance sheet is strong, with a healthy equity ratio of 57.63% in TTM, indicating financial stability. The debt-to-equity ratio is modest at 0.38, suggesting manageable leverage. Return on Equity (ROE) has improved to 12.74% in TTM, signifying effective use of shareholder funds. However, the increase in total debt over the years warrants careful monitoring.

Cash Flow

Positive

While Skechers' operating cash flow remains positive, it has decreased to $619 million in TTM compared to $687 million in 2024. The free cash flow has seen a decline, suggesting increased capital expenditure, which could be indicative of strategic investments. The operating cash flow to net income ratio stands at 0.97, reflecting solid cash generation relative to net profits.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
8.97B	8.00B	7.44B	6.29B	4.60B
	Gross Profit
4.77B	4.15B	3.52B	3.10B	2.19B
	EBIT
904.26M	784.79M	392.95M	458.61M	28.25M
	EBITDA
1.11B	968.31M	700.39M	737.76M	276.49M
	Net Income Common Stockholders
639.47M	545.80M	373.03M	741.50M	146.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.23B	1.26B	717.90M	894.86M	1.47B
	Total Assets
8.46B	7.55B	6.89B	6.49B	5.81B
	Total Debt
1.93B	1.68B	1.64B	1.66B	2.00B
	Net Debt
812.62M	493.90M	1.03B	865.73M	633.58M
	Total Liabilities
3.64B	3.15B	3.02B	2.95B	3.09B
	Stockholders Equity
4.73B	4.02B	3.57B	3.26B	2.48B
Cash Flow		Free Cash Flow
270.60M	907.44M	-120.67M	-97.52M	21.54M
	Operating Cash Flow
687.39M	1.23B	238.32M	212.15M	331.45M
	Investing Cash Flow
-485.36M	-418.02M	-287.49M	-344.67M	-312.47M
	Financing Cash Flow
-253.46M	-234.68M	-118.06M	-433.92M	533.30M

Skechers USA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price61.95

Price Trends

50DMA

54.45

Positive

100DMA

61.23

Positive

200DMA

63.10

Negative

Market Momentum

MACD

2.84

Negative

RSI

68.05

Neutral

STOCH

59.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKX, the sentiment is Positive. The current price of 61.95 is above the 20-day moving average (MA) of 55.87, above the 50-day MA of 54.45, and below the 200-day MA of 63.10, indicating a neutral trend. The MACD of 2.84 indicates Negative momentum. The RSI at 68.05 is Neutral, neither overbought nor oversold. The STOCH value of 59.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKX.

Skechers USA Risk Analysis

Skechers USA disclosed 30 risk factors in its most recent earnings report. Skechers USA reported the most risks in the “Macro & Political” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Skechers USA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	83 Outperform	$19.41B	20.76	39.80%	―	19.40%	32.70%
CROX	80 Outperform	$6.43B	7.03	53.70%	―	2.09%	26.18%
BIRK	76 Outperform	$10.65B	39.43	9.35%	―	18.55%	147.70%
SHOO	76 Outperform	$1.90B	11.29	19.51%	3.21%	10.17%	-4.71%
SKX	72 Outperform	$9.27B	14.91	14.67%	―	10.66%	9.44%
WWW	68 Neutral	$1.38B	19.31	25.29%	2.34%	-13.05%	―
Sector *	61 Neutral	$6.97B	11.38	2.88%	3.90%	2.64%	-22.07%

* Consumer Cyclical Sector Average

Performance Comparison

SKX

Skechers USA

61.95

-6.29

-9.22%

CROX

Crocs

114.73

-24.59

-17.65%

DECK

Deckers Outdoor

127.41

-23.07

-15.33%

SHOO

Steven Madden

25.77

-15.17

-37.05%

WWW

Wolverine World Wide

17.07

3.98

30.40%

BIRK

Birkenstock Holding plc

56.08

8.07

16.81%

Skechers USA Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 22.70%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture. While Skechers achieved record sales and strong growth in several international markets, challenges in China and increased operating expenses and inventory levels highlighted some significant hurdles. The uncertainty in the global trade environment also adds to the complexity of the current situation.

Q1-2025 Updates

Positive Updates

Record Sales Achievement

Skechers achieved record sales in the first quarter of 2025, with $2.41 billion in revenue, or $2.46 billion on a constant currency basis. This is a significant milestone for the company.

Strong International Growth

International sales accounted for 65% of the total business, with EMEA growing by 14% and The Americas by 8.3%. Excluding China, APAC sales grew 12%.

Wholesale and Direct-to-Consumer Growth

Wholesale sales increased by 7.8%, and direct-to-consumer sales grew by 6% year over year, indicating strong performance across multiple channels.

Expansion of Retail Footprint

Skechers ended the quarter with 5,318 stores worldwide, opening 51 company-owned stores and planning to open an additional 150 to 170 stores in Q2 2025.

Negative Updates

Challenges in China and APAC

Sales in China declined by 16%, leading to an overall decrease of 2.6% in APAC sales. The macroeconomic environment in China remains challenging.

Operating Margin Decrease

Operating expenses increased, leading to a decrease in operating margin to 11% from 13.3% the previous year.

Increased Inventory Levels

Inventory levels increased by 30% compared to the prior year, partly due to elongated transit times related to the Suez Canal closure.

Uncertainty in Global Trade Environment

The global trade environment remains uncertain, with tariffs affecting production costs and necessitating strategic adjustments in sourcing and pricing.

Company Guidance

During Skechers' Q1 2025 earnings call, the company reported a new sales record of $2.41 billion, or $2.46 billion on a constant currency basis, with earnings per share of $1.34. International sales constituted 65% of total business, with EMEA and The Americas seeing growth of 14% and 8.3%, respectively, while APAC saw a 2.6% decline due to soft consumer spending in China. Excluding China, APAC grew 12%. Wholesale sales rose by 7.8%, with domestic growth at 4.2% and international at 9.5%. Direct-to-consumer sales increased by 6%, with domestic up 11% and international up 2.9%; excluding China, international DTC sales grew 12%. The company ended the quarter with 5,318 stores worldwide, including 1,821 company-owned locations, and plans to open 150 to 170 more company-owned stores in Q2 2025. Despite macroeconomic uncertainties, Skechers remains focused on expanding its distribution centers and enhancing product offerings. The company did not provide guidance due to the dynamic environment but expressed confidence in navigating these challenges.

Skechers USA Corporate Events

Delistings and Listing ChangesM&A Transactions

Skechers USA Announces Acquisition by 3G Capital

Positive

May 5, 2025

On May 4, 2025, Skechers U.S.A., Inc. announced an agreement to be acquired by 3G Capital, a global investment firm, in a merger that will see Skechers become a privately held company. The transaction, valued at $63.00 per share in cash, represents a 30% premium over the company’s 15-day volume-weighted average stock price. This strategic move, unanimously approved by Skechers’ board, aims to support the company’s long-term growth and strategic initiatives, with the current management team continuing to lead the company alongside 3G Capital.

Spark’s Take on SKX Stock

According to Spark, TipRanks’ AI Analyst, SKX is a Outperform.

Skechers presents a solid financial foundation with consistent revenue growth and stable margins. However, technical indicators suggest a cautious outlook due to the stock trading below key moving averages and limited momentum. The valuation is attractive, but the absence of a dividend and uncertainty from the earnings call contribute to a moderate overall score. Key strengths include robust international sales and a strong balance sheet, while challenges in China and global trade uncertainties pose risks.

To see Spark’s full report on SKX stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.