“It’s hard to find a company that has as much retail momentum as Skechers, especially in a market like this,” said Jeff Van Sinderen, an analyst with B. Riley & Co. “They’re executing well. Their product is diversified and they have great product innovations.”
Christopher Svezia, an analyst with Susquehanna Financial Group, noted that while Skechers missed earnings expectations, its revenue increases demonstrated a winning quarter.
“They missed the bottom line, but at the end of the day, they put up 20 percent revenue growth and had strong [comparable-store sales] growth. That’s impressive,” said Svezia. “The underlying fundamentals continue to be good.”
He added that Skechers is benefiting from success across a variety of footwear categories, from athletic and fitness to children’s. “They’re not being carried by one thing,” Svezia said, noting that the company is on trend with colors, styles and technology.
Price points are compelling too, the analyst pointed out. “That is helping them catch lost market share,” he said.
David Weinberg, CFO and COO of the Manhattan Beach, Calif.-based footwear company, elaborated on recent successes during a conference call last week, highlighting double-digit increases in the boys’ and girls’ merchandise, and increasing momentum in performance.
“We continue to innovate in our performance division, evolving both our running and walking footwear, which resulted in significant sales in Skechers GoWalk,” Weinberg said.
The firm, which reported backlogs of 19.7 percent, is confident about its opportunity moving forward into the fourth quarter and next year.
“The demand for our product remains high,” Weinberg said on the call. “Our third quarter was one of the strongest third quarters for incoming orders, and October is tracking to be one of our strongest Octobers for incoming orders as well — both positive signs for what we believe will be a strong holiday season and first quarter of 2014.”
Net earnings for the three-month period ended Sept. 30 more than doubled to $26.8 million, or 53 cents a share.
Net sales rose 20 percent to $515.8 million, compared with $429.4 million in the year-ago period. The company’s net sales were the second highest in its history. (Analysts had been expecting earnings per share of 61 cents, on sales of $518.2 million.)
Executives pointed to an increasing tax rate, particularly due to international growth, and rising overhead and administrative costs related to opening 16 new stores as the reasons earnings came in below the Wall Street forecast.