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Skechers USA (SKX)
NYSE:SKX
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Skechers USA
(NYSE:SKX)
73Outperform
Positive Factors
Geographical Diversification
SKX’s diversification across geographies and value proposition relative to peers bodes well in an environment where consumers are tightening the belt on discretionary spending.
Wholesale Opportunities
Investments in sports such as football, basketball, and running could provide additional wholesale opportunities.
Negative Factors
China Market Concerns
Weakness in China is expected to weigh on first-quarter sales growth and operating margin, impacting the overall performance.
Foreign Exchange Impact
FY25 guidance disappointed due to an expected $200M FX revenue headwind, and EPS drag from FX headwinds and the new OECD global minimum tax.
Skechers USA (SKX) vs. S&P 500 (SPY)
Market Cap
$7.31B
Dividend YieldN/A
Average Volume (3M)2.22M
Price to Earnings (P/E)11.8
Beta (1Y)0.97
Revenue Growth12.11%
EPS Growth19.16%
CountryUS
Employees10,100
SectorConsumer Cyclical
Sector Strength46
IndustryApparel - Footwear & Accessories
Share Statistics
EPS (TTM)4.15
Shares Outstanding130,041,030
10 Day Avg. Volume1,916,295
30 Day Avg. Volume2,222,627
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)N/A
Price to Sales (P/S)0.93
Price to Cash Flow (P/CF)9.00
P/FCF Ratio8.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$78.20Price Target Upside55.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Skechers USA Business Overview & Revenue Model
Company DescriptionSkechers USA, Inc. (SKX) is a globally recognized footwear brand headquartered in Manhattan Beach, California. The company designs, develops, and markets a diverse range of lifestyle and performance footwear for men, women, and children. Skechers is known for its innovative products that combine style, comfort, and quality. The company operates in the footwear industry and offers a wide selection of casual, sport, and formal shoes, while also expanding into apparel and accessories.
How the Company Makes MoneySkechers USA generates revenue primarily through the sale of its footwear products. The company's revenue streams include wholesale, direct-to-consumer, and international sales. Wholesale revenue is derived from selling products to department stores, specialty retailers, and national chains, while direct-to-consumer sales occur through Skechers' owned retail stores and e-commerce platforms. International sales are a significant contributor to Skechers' earnings, with the company having a strong presence in many global markets. Additionally, the company benefits from strategic partnerships and licensing agreements that help expand its product offerings and market reach. Skechers continues to focus on innovation, marketing, and expanding its retail network to drive growth and profitability.
Skechers USA Financial Statement Overview
Summary
Skechers shows robust financial health with strong revenue growth, improved profitability, and a stable balance sheet. While there are concerns about declining free cash flow, the company maintains a conservative leverage position and efficient equity utilization. Continued focus on operational efficiency and cash flow management will be key to sustaining its growth trajectory.Income Statement
Skechers has demonstrated strong revenue growth with a 12.15% increase from 2023 to 2024. The Gross Profit Margin improved to 53.18%, indicating efficient cost management. Net Profit Margin also rose to 7.13%, showcasing improved profitability. However, EBIT and EBITDA margins remained stable, suggesting room for operational efficiency improvements.87
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 0.39, indicating a conservative use of leverage. Return on Equity improved to 13.52%, reflecting efficient use of equity to generate profits. The Equity Ratio stands at 55.93%, suggesting a strong equity base and financial stability. The balance sheet shows solid fundamentals with manageable debt levels.82
Very Positive
Cash Flow
Free Cash Flow experienced a significant decline of 70.19% from 2023 to 2024, primarily due to higher capital expenditures. The Operating Cash Flow to Net Income Ratio is 1.07, indicating healthy cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio has decreased to 0.42, signaling potential challenges in maintaining free cash flow levels.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.97B | 8.00B | 7.44B | 6.29B | 4.60B | Gross Profit |
| 4.77B | 4.15B | 3.52B | 3.10B | 2.19B | EBIT |
| 904.26M | 784.79M | 392.95M | 458.61M | 28.25M | EBITDA |
| 904.26M | 968.31M | 700.39M | 737.76M | 276.49M | Net Income Common Stockholders |
| 639.47M | 545.80M | 373.03M | 741.50M | 146.23M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.23B | 1.26B | 717.90M | 894.86M | 1.47B | Total Assets |
| 8.46B | 7.55B | 6.89B | 6.49B | 5.81B | Total Debt |
| 1.83B | 1.68B | 1.64B | 1.66B | 2.00B | Net Debt |
| 710.83M | 493.90M | 1.03B | 865.73M | 633.58M | Total Liabilities |
| 3.64B | 3.15B | 3.02B | 2.95B | 3.09B | Stockholders Equity |
| 4.73B | 4.02B | 3.57B | 3.26B | 2.48B |
| Cash Flow | Free Cash Flow | |||
| 270.60M | 907.44M | -120.67M | -97.52M | 21.54M | Operating Cash Flow |
| 687.39M | 1.23B | 238.32M | 212.15M | 331.45M | Investing Cash Flow |
| -485.36M | -418.02M | -287.49M | -344.67M | -312.47M | Financing Cash Flow |
| -253.46M | -234.68M | -118.06M | -433.92M | 533.30M |
Skechers USA Technical Analysis
Negative
50.20
Price Trends
62.58
Negative
64.87
Negative
65.23
Negative
Market Momentum
-1.50
Negative
43.69
Neutral
65.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKX, the sentiment is Negative. The current price of 50.2 is below the 20-day moving average (MA) of 56.21, below the 50-day MA of 62.58, and below the 200-day MA of 65.23, indicating a bearish trend. The MACD of -1.50 indicates Negative momentum. The RSI at 43.69 is Neutral, neither overbought nor oversold. The STOCH value of 65.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKX.
Skechers USA Risk Analysis
Skechers USA disclosed 30 risk factors in its most recent earnings report. Skechers USA reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Skechers USA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $5.38B | 6.01 | 57.76% | ― | 3.53% | 24.55% | |
76 Outperform | $15.31B | 16.37 | 39.80% | ― | 19.40% | 32.70% | |
73 Outperform | $7.31B | 11.79 | 15.42% | ― | 12.11% | 19.16% | |
63 Neutral | $3.72B | 17.61 | 12.01% | 1.78% | -3.35% | -6.09% | |
63 Neutral | $82.21B | 18.49 | 31.93% | 2.77% | -7.16% | -12.12% | |
61 Neutral | $38.18B | 46.87 | 15.39% | 0.22% | 10.59% | ― | |
59 Neutral | $12.18B | 11.09 | -1.08% | 3.77% | 1.26% | -19.82% |
* Consumer Cyclical Sector Average
Performance Comparison
SKX
Skechers USA
50.20
-7.80
-13.45%
COLM
Columbia Sportswear
68.84
-5.54
-7.45%
CROX
Crocs
100.65
-33.44
-24.94%
DECK
Deckers Outdoor
106.02
-40.63
-27.71%
NKE
Nike
57.25
-29.96
-34.35%
ADDYY
Adidas
107.77
-1.07
-0.98%
Skechers USA Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -33.62% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects a robust performance by Skechers with record revenue and EPS growth, driven by strong expansion into new markets and regions. However, challenges such as a decline in China sales and negative foreign exchange impacts slightly offset these achievements.Highlights
Record Revenue and EPS Growth
Skechers achieved record sales of over $9 billion, a 13% increase year-over-year, and diluted earnings per share of $4.40, representing a 26% increase.
Strong Fourth Quarter Performance
Fourth-quarter sales reached $2.24 billion with earnings per share of $0.86, driven by 17% growth in wholesale and 8% in direct-to-consumer.
Expansion into New Markets
Skechers expanded into soccer and basketball markets, introduced cricket footwear and apparel in India, and engaged with a roster of elite athletes globally.
EMEA Region Growth
Sales in the EMEA region increased by 25% year-over-year, driven by strength across almost all markets.
Healthy Balance Sheet and Share Repurchase
Maintained a strong balance sheet with $1.38 billion in cash and executed a repurchase of approximately 5.2 million shares.
Lowlights
Decline in China Sales
Sales in China declined by 11% in the fourth quarter due to challenging macroeconomic conditions.
Foreign Exchange Impact
Unfavorable foreign currency changes resulted in a $34.7 million impact on other expenses in the fourth quarter.
Increased Inventory Levels
Inventory increased by 26% year-over-year, attributed to elevated in-transit inventory, especially in EMEA due to shipping delays.
Company Guidance
In the Skechers earnings call, the company provided guidance for fiscal year 2025 with sales projected to be between $9.7 billion and $9.8 billion, despite facing headwinds from foreign currency fluctuations and new global minimum tax regulations. Earnings per diluted share are expected to range from $4.30 to $4.50, with the effective tax rate anticipated to rise to 22-23%. The company plans capital expenditures between $600 million and $700 million, primarily to expand distribution centers in the U.S. and China. For Q1 2025, sales are forecasted to be between $2.4 billion and $2.425 billion, with net earnings per share projected at $1.10 to $1.15.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.