Skechers U.S.A., Inc. (SKX) is riding high as its shoes are on trend worldwide. This Zacks Rank #1 (Strong Buy) is expecting sales to hit a new record high for the year in 2024.

Skechers makes a diverse range of lifestyle and performance footwear, apparel and accessories for men, women and children. It sells its collections in 180 countries through department and specialty stores and direct-to-consumers through Skechers e-commerce sites and about 5,200 company- and third party owned- physical retail stores.

Although headquartered in Southern California, it’s a truly global company, with more than half of its total sales from the international business.

A Record First Quarter

On Apr 25, 2024, Skechers reported its first quarter results and beat on the Zacks Consensus by $0.23. Earnings were $1.33 versus the consensus of $1.10.

It was the 6th consecutive earnings beat in a row.

Sales jumped 12.5% to a record $2.3 billion from $2 billion a year ago. Direct-to-consumer was up 17% while wholesale rose 10%.

International sales rose 15% while US domestic gained 8%. For the quarter, international sales represented 65% of total sales. All geographic regions were higher with growth rising 17% in Europe, the Middle East and Africa, 16% in Asia Pacific and 8% in the Americas.

Domestic wholesale, which had lagged in the fourth quarter, returned to growth, rising 8% year-over-year.

It’s celebrity branding is driving sales including signature capsules with Martha Stewart and Snoop Dogg. The comfort technology is also a catalyst as its Skechers Hands Free Slip-ins footwear has become the number one Skechers comfort technology product in most markets.

Gross margin increased 360 basis points to 52.5%, primarily due to lower costs per unit, driven by lower freight costs and higher average selling prices.

Inventory fell 10.8% to $1.36 billion, a decline of $164.8 million, from Dec 31, 2023.

Raised Full Year Guidance

After such a strong first quarter, it’s not surprising that Skechers raised its full year earnings and sales guidance.

For earnings, it raised the earnings to between $3.95 and $4.10 per share, that’s up from the guidance it gave in Feb 2024 which was a range of $3.65 to $3.85.

As a result, the analysts raised their estimates for 2024. 6 estimates have been revised higher over the last month, pushing the Zacks Consensus up to $4.02.

That’s earnings growth of 15.2% as the company made $3.49 last year.

The analysts are bullish about the momentum sticking around too as 6 estimates were also revised higher for 2025 at the same time. The Zacks Consensus has jumped 13% to $4.55.

Image Source: Zacks Investment Research

Shares at New All-Time Highs

Shares of Skechers jumped after this latest earnings beat and continue to hit new all-time highs.

Image Source: Zacks Investment Research

Skechers is still attractively valued, with a forward P/E of just 16.9.

It’s also shareholder friendly. The company repurchased 1 million shares, for $60 million in the first quarter. As of Mar 31, 2024, it had $205.7 million remaining under the share repurchase program.

For investors looking for a retailer with sales momentum, Skechers should be on your short list.

— Tracey Ryniec

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Source: Zacks