Skechers USA (SKX) AI Stock Analysis

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Skechers USA

(NYSE:SKX)

73Outperform

Skechers scores well due to strong financial performance and a robust earnings call, which highlight significant revenue growth and strategic expansion. The valuation is reasonable, but technical indicators suggest caution due to bearish momentum. Declining free cash flow and external challenges, such as reduced sales in China, are notable concerns.

Positive Factors

Consumer Demand

Management commented demand was 'extremely robust' and 'almost hard to catch,' showing strong consumer interest.

International Sales

International sales momentum is expected to continue with growth across various regions excluding China.

Value Proposition

The brand's value proposition is expected to help drive share gains despite current tariff challenges.

Negative Factors

Guidance Withdrawal

The lack of near-term guidance due to global trade uncertainty clouds the fundamental outlook.

Tariff Impact

The wholesale business is expected to be the first to feel the margin impact due to tariffs, leading to potential missed sales.

Tariff Risk

SKX, and most companies in coverage, face the risk that the additional 145% tariff on Chinese goods remains in place, and that tariffs increase on goods from other countries.

Skechers USA (SKX) vs. S&P 500 (SPY)

Market Cap

$7.44B

Dividend YieldN/A

Average Volume (3M)3.32M

Price to Earnings (P/E)11.9

Beta (1Y)0.95

Revenue Growth12.11%

EPS Growth19.16%

CountryUS

Employees10,100

SectorConsumer Cyclical

Sector Strength56

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)0.65

Shares Outstanding131,181,550

10 Day Avg. Volume5,337,806

30 Day Avg. Volume3,318,660

Financial Highlights & Ratios

PEG RatioN/A

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

$61.67

Price Target Upside29.04% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering13

Skechers USA Business Overview & Revenue Model

Company DescriptionSkechers U.S.A., Inc. designs, develops, markets, and distributes footwear for men, women, and children; and performance footwear for men and women worldwide. The company operates through three segments: Domestic Wholesale, International Wholesale, and Direct-to-Consumer. It offers casual, casual athletic, sport athletic, trail, sandals, boots, and retro fashion footwear for men and women under the Skechers USA, Skechers Sport, Skechers Active, Modern Comfort, Skechers Street, Mark Nason, and BOBS brands; sneakers, casuals, boots, and sandals for boys and girls under the Skechers Mega-Craft, S-Lights, SKECH-AIR, Foamies, Twinkle Toes, Z-Strap, Skechers Stretch Fit, and Skechers Street brands; and technical footwear under the Skechers GOrun, Skechers GOwalk, Skechers GOtrain, Skechers GOtrail, and Skechers GO Golf brands. The company also provides men's and women's slip-resistant and safety-toe casuals, boots, hikers, and athletic shoes; and lifestyle apparel for men, women, and kids. As of December 31, 2021, it operated 4,306 company and third party owned Skechers stores. The company sells its products through department and specialty stores, athletic and independent retailers, boutiques, and online retailers; and through its e-commerce sites, concept stores, and factory and warehouse outlet stores. It also licenses its Skechers brand. Skechers U.S.A., Inc. was incorporated in 1992 and is headquartered in Manhattan Beach, California.

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

Very Positive

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.

Balance Sheet

Very Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Neutral

Last Price47.79

Price Trends

50DMA

56.16

Negative

100DMA

63.17

Negative

200DMA

63.81

Negative

Market Momentum

MACD

-2.49

Negative

RSI

46.13

Neutral

STOCH

63.48

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKX, the sentiment is Neutral. The current price of 47.79 is below the 20-day moving average (MA) of 50.79, below the 50-day MA of 56.16, and below the 200-day MA of 63.81, indicating a bearish trend. The MACD of -2.49 indicates Negative momentum. The RSI at 46.13 is Neutral, neither overbought nor oversold. The STOCH value of 63.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	83 Outperform	$16.79B	17.96	39.80%	―	19.40%	32.70%
CROX	81 Outperform	$5.53B	6.18	57.76%	―	3.53%	24.55%
BIRK	75 Outperform	$9.43B	39.77	8.52%	―	20.40%	134.09%
SKX	73 Outperform	$7.44B	11.92	14.67%	―	12.11%	19.16%
SHOO	70 Outperform	$1.54B	8.99	20.20%	4.10%	15.03%	1.51%
WWW	61 Neutral	$1.04B	22.25	15.57%	3.24%	-21.75%	―
Sector *	60 Neutral	$6.78B	11.63	3.24%	4.20%	2.36%	-21.91%

* Consumer Cyclical Sector Average

Performance Comparison

SKX

Skechers USA

47.79

-17.62

-26.94%

CROX

Crocs

97.68

-27.72

-22.11%

DECK

Deckers Outdoor

109.19

-29.72

-21.40%

SHOO

Steven Madden

20.80

-18.81

-47.49%

WWW

Wolverine World Wide

12.72

2.09

19.66%

BIRK

Birkenstock Holding plc

50.68

5.23

11.51%

Skechers USA Earnings Call Summary

Earnings Call Date: Apr 24, 2025 | % Change Since: -5.35% | Next Earnings Date: Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture. While Skechers achieved record sales and strong growth in several international markets, challenges in China and increased operating expenses and inventory levels highlighted some significant hurdles. The uncertainty in the global trade environment also adds to the complexity of the current situation.

Highlights

Record Sales Achievement

Skechers achieved record sales in the first quarter of 2025, with $2.41 billion in revenue, or $2.46 billion on a constant currency basis. This is a significant milestone for the company.

Strong International Growth

International sales accounted for 65% of the total business, with EMEA growing by 14% and The Americas by 8.3%. Excluding China, APAC sales grew 12%.

Wholesale and Direct-to-Consumer Growth

Wholesale sales increased by 7.8%, and direct-to-consumer sales grew by 6% year over year, indicating strong performance across multiple channels.

Expansion of Retail Footprint

Skechers ended the quarter with 5,318 stores worldwide, opening 51 company-owned stores and planning to open an additional 150 to 170 stores in Q2 2025.

Lowlights

Challenges in China and APAC

Sales in China declined by 16%, leading to an overall decrease of 2.6% in APAC sales. The macroeconomic environment in China remains challenging.

Operating Margin Decrease

Operating expenses increased, leading to a decrease in operating margin to 11% from 13.3% the previous year.

Increased Inventory Levels

Inventory levels increased by 30% compared to the prior year, partly due to elongated transit times related to the Suez Canal closure.

Uncertainty in Global Trade Environment

The global trade environment remains uncertain, with tariffs affecting production costs and necessitating strategic adjustments in sourcing and pricing.

Company Guidance

During Skechers' Q1 2025 earnings call, the company reported a new sales record of $2.41 billion, or $2.46 billion on a constant currency basis, with earnings per share of $1.34. International sales constituted 65% of total business, with EMEA and The Americas seeing growth of 14% and 8.3%, respectively, while APAC saw a 2.6% decline due to soft consumer spending in China. Excluding China, APAC grew 12%. Wholesale sales rose by 7.8%, with domestic growth at 4.2% and international at 9.5%. Direct-to-consumer sales increased by 6%, with domestic up 11% and international up 2.9%; excluding China, international DTC sales grew 12%. The company ended the quarter with 5,318 stores worldwide, including 1,821 company-owned locations, and plans to open 150 to 170 more company-owned stores in Q2 2025. Despite macroeconomic uncertainties, Skechers remains focused on expanding its distribution centers and enhancing product offerings. The company did not provide guidance due to the dynamic environment but expressed confidence in navigating these challenges.

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.