Skechers waves bye to red and tops estimates

ANALYSIS_ American shoes brand Skechers USA Inc. has waved bye to the red as it has just posted second-quarter net income of 7 million dollars or 0.14 dollars per share, compared with net loss of 1.8 million dollars or 0.04 dollars per share last year.

"We believe the momentum we are experiencing will continue through this year and into next year," CEO Robert Greenberg said.

Greenberg credited the company’s performance to a more diversified balance of products. As the company began cutting its losses from the toning shoe two years ago, Skechers also revamped and updated its lines, with a new athletic-casual shoe called the Relaxed Fit now performing well.

Revenue rose 12 percent to 428.2 million dollars from 384 million dollars last year, what compares to the average market estimate of revenue of 427.6 million dollars.

Revenue in stores open at least a year rose 16.5 percent, while net income for the three months ended June 30 totalled 7.1 million dollars, or 14 cents per share. That compares with a loss of 1.8 million dollars, or 4 cents per share, a year ago. Analysts polled by FactSet expected net income of 3 cents per share.

On the back of the news, shares of Skechers rose 35 cents to 27 dollars in aftermarket trading, after ending the day down 33 cents at 26.55 dollars, reported Associated Press.

This is the fourth straight quarter that Skechers has reported a profit.

“The positive feedback we have received … is unlike any we have previously experienced,” Greenberg said in a statement. "We believe the momentum we are experiencing will continue through this year and into next year.”

Skechers returns to profit

Revenues for the quarter were up 11 percent at 428 million dollars, compared with 384 million dollars in the prior year. Sales growth was led by double-digit gains in international wholesale and company-owned retail businesses as well as single-digit improvement in domestic wholesale division, as the company explained in a communication Wednesday.

Revenues for the quarter were up 11 percent at 428 million dollars, compared with 384 million dollars in the prior year and the analysts polled by Thomson Reuters estimated earnings of 0.03 dollars per share on revenues of 427.62 million dollars for the quarter.

Skechers USA (NYSE:SKX) had its price objective reviewed at rise by Wedbush from 20 dollars to 24 in a report released on Monday, ‘AnalystRatingsNetwork’ reports. Wedbush currently has a ‘neutral’ rating on the stock.

Meanwhile, analysts at Zacks have maintained their Rank #1 (Strong Buy) over the stock, although they have stressed that the rating “lowers the predictive power of ESP because the Zacks Rank #1 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.”