Market Watch: Skechers, Deckers, Under Armour to Report Earnings

Market Watch: Skechers, Deckers, Under Armour
An ad for Teva's Originals Collection

The Week Ahead

Monday, July 21:
Crocs Inc. Q2 results
Chicago Fed national activity index for June

Tuesday, July 22:
U.S. consumer price index for June
U.S. existing home sales for June

Wednesday, July 23:
Skechers USA Inc. Q2 results
Rocky Brands Inc. Q2 results

Thursday, July 24:
Deckers Outdoor Corp. Q2 results
Under Armour Inc. Q2 results
Amazon.com Inc. Q2 results
U.S. initial weekly jobless claims
U.S. continuing weekly jobless claims

Friday, July 25:

U.S. durable goods orders for June

Stock Watch

Concerns about rising tensions between Russia and the West weighed on the stock market on Monday ahead of a busy earnings week, with Skechers USA Inc., Rocky Brands Inc. and Crocs Inc. among those companies slated to report results.

Investors will be looking for commentary around the continued sales momentum at Skechers when the company delivers its second-quarter earnings on Wednesday.

Skechers footwear sales increased 35.1 percent in June and 27.5 percent in the first week of July, according to SportScanInfo.

“We believe that Skechers will continue to perform well and gain market share as the result of the combination of compelling product assortment and on-target price points,” said Sterne Agee analyst Sam Poser, adding that he expects company-owned retail revenue gains for the period to be greater than that of Skechers’ wholesale business.

The company also benefited from higher-than-average selling prices in the second quarter, according to Poser.

“We view strong ASPs as a clear sign of healthy business and clean inventory levels,” he said.

Meanwhile, analysts expect Deckers could beat the Street’s forecast for diluted earnings per share loss of $1.29 when it reports its results for the period on Thursday.

Market watchers said they have noted strong sales of the company’s Teva sandals throughout the quarter, which should translate into robust spring ’15 order growth for the brand for the full year.

Additionally, investors will be looking for guidance on Ugg’s product positioning for fall and winter, which is tipped to consist of transitional and fashion product that has been engineered at a lower price point in addition to updates to the Ugg classics.

“Based on the results of our June independent retailer surveys, we suspect Deckers realized stronger reorder activity this year than last, notably in the sandal category,” said Baird Equity Research analyst Mitch Kummetz.

“Encouragingly, on its fourth-quarter earnings conference call, management noted that seasonal product for its brands picked up on the arrival of spring weather,” Kummetz added.

Also set to report on Thursday is Under Armour Inc., which is expected to benefit from continued strength in the athletic space.

The Street is forecasting the company will post earnings of seven cents on revenue of $573.6 million, according to analysts polled by Yahoo Finance.

“We continue to like the way Under Armour sets up in the back half, partly on management’s conservative fourth-quarter outlook,” Kummetz said, noting that the company’s guidance for the full year reflects conservative assumptions around winter weather.

“And while not baked into guidance, Under Armour plans to position itself to benefit from favorable weather if it occurs,” he said.