What Could Drive Skechers’ 3Q17 Top Line


Oct. 16 2017, Updated 4:36 p.m. ET

What to expect from Skechers’ 3Q17 top line

As we’ve discussed in this series, Skechers (SKX) is slated to report its third-quarter results on October 19. Management expects revenues in the $1,050–$1,075 million range, rising 12.5% YoY (year-over-year) at the mid-point. This growth is likely to be driven by double-digit growth in the international wholesale and global retail businesses. Domestic wholesale is, however, expected to remain flat.

Wall Street’s expectations for the quarter are in line with management. Analysts, on average, expect Skechers’ top line to expand 12.5% to $1,060 million.

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Looking at the previous quarter’s performance

During the second quarter of 2017, Skechers recorded a 17.3% YoY jump in its top line to $1 billion. Growth was driven by strong performance from the domestic wholesale (6.4% YoY), international wholesale (18.6% YoY), and global retail (+28% YoY) businesses. The company outdid Wall Street’s top-line expectations of $997 million.

Evaluating competitors’ top-line growths

Sportswear giant Nike (NKE), which reported its quarterly results at the end of September, failed to meet top-line expectations. In fact, the company posted one of its slowest-growth quarters in the last seven years, mainly owing to a tough retail environment. Its total sales rose 0.1% YoY to $9.07 billion during the quarter.

Other sportswear players that are likely to report quarterly results this month are Under Armour (UAA) and Columbia Sportswear (COLM). While UAA is expected to post a top-line increase of 1.1%, total sales of COLM are expected to fall 1.2% YoY this quarter.

ETF investors seeking to add exposure to SKX can consider the iShares Morningstar Small-Cap ETF (JKJ), which invests ~0.5% of its portfolio in the company.

Read on to the next part of this series to learn about Skechers’ expected bottom-line performance.


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