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Skechers Stock Struggled after 1Q18 Results

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Apr. 25 2018, Published 7:57 a.m. ET

What’s happening to Skechers stock?

Skechers (SKX) investors were concerned after the company reported its 1Q18 earnings last week. Though the footwear retailer outdid Wall Street expectations on both top and bottom lines, its second-quarter guidance left investors fretting. The stock plunged 27% on Friday, April 20, and another 5% on Monday, April 23. The company is now among the worst-performing sportswear stocks with YTD (year-to-date) losses of about 23%. Wall Street also took some quick action on the company by lowering its ratings and cutting its price target. 

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Skechers results weren’t all bad

Skechers’s total sales increased 16.5% YoY to $1.23 billion, beating the Thomson Reuters consensus expectations by $50 million. This was the sixth consecutive revenue beat for the company. Earnings per share increased 25% YoY to 75 cents, topping expectations by one cent.

Read part two and three of this series to know more about the key revenue drivers and profitability numbers for the quarter. Read part four to know about the management’s guidance, the company’s YTD stock market performance, and rating changes.

About Skechers

Founded in 1992, Skechers is an American footwear company that designs and markets footwear for men, women, and children. It operates in more than 160 countries through 2,651 retail stores as well as departmental stores, specialty stores, and websites.

The company clocked total sales of $4.3 billion over the last 12 months. It has a market capitalization of $4.7 billion as of April 23, 2018. In comparison, industry leader Nike (NKE) recorded trailing-12-month sales of $35.2 billion and has a market capitalization of $107.8 billion.

ETF investors seeking to add exposure to SKX can consider the First Trust Consumer Discretionary AlphaDEX Fund (FXD), which invests ~1.2% of its portfolio in the company.

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