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Analysts Upbeat about Footwear Retailers’ Earnings Growth in 2018

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Analysts’ projections

Analysts expect Foot Locker’s (FL) adjusted EPS (earnings per share) to grow 8.8% to $4.47 in fiscal 2018. The company has guided for its EPS to grow by double digits, driven by expected increases in its top line and a reduced share count in 2H18. Its effective tax rate is expected to be ~27%–28%.

Analysts expect DSW’s (DSW) adjusted EPS to grow 6.8% to $1.62 in fiscal 2018, while the company expects adjusted EPS of $1.52–$1.67. The effective tax rate is expected to be 29%. The company’s EPS guidance does not take into consideration the Ebuys exit and the impact of having one fewer week in 2018 than in 2017.

Analysts expect Skechers’s (SKX) adjusted EPS to grow 28.1% to $2.28. The company has not provided any outlook for fiscal 2018.

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In fiscal 2018, analysts expect Deckers Outdoor’s (DECK) adjusted EPS to rise 42.2% YoY (year-over-year) to $5.43. Deckers has projected fiscal 2018 adjusted EPS of $5.37–$5.42, whereas it reported EPS of $3.82 in fiscal 2017. Its bottom line is expected to benefit from lower tax. The effective tax is expected to be 22.5% in fiscal 2018.

Past performance

Deckers reported adjusted EPS of $5.22 in the first three quarters of fiscal 2018, compared with $3.55 in the first three months of 2017. Lower effective tax drove its bottom-line improvement.

In fiscal 2018, Foot Locker reported adjusted EPS of $3.99, down 17% YoY. It had non-GAAP (generally accepted accounting principles) EPS of -$2.22, compared with $4.91 in fiscal 2017. Its bottom line was impacted by incremental tax expenses, asset impairment charges, and a pre-tax charge related to pension litigation.

DSW’s fiscal 2018 adjusted EPS were $1.52, up 4.1% from fiscal 2017. Its non-GAAP EPS came in at $0.83, compared with $1.52 the year prior. Its EPS were impacted by charges related to its Ebuys exit, tax reform, foreign exchange, and restructuring expenses.

Skechers reported fiscal 2018 adjusted EPS of $1.78, better than fiscal 2017’s figure of $1.57. Its non-GAAP EPS were $1.14, compared with $1.57 in fiscal 2016, impacted by tax reform and selling, general, and administrative expenses.

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