As Skechers (SKX, Financial) gears up for its upcoming earnings report, options trading activity has intensified, with volume reaching 1.4 times its normal level. In this pre-earnings period, put options are slightly outpacing call options by a margin of 10 to 7, indicating a cautious sentiment among investors.
Market expectations are set for a significant stock movement upon the release of Skechers' financial results. The implied volatility suggests a predicted swing of approximately 7.4%, equating to a $3.76 change in the stock price. Historically, over the last eight quarters, Skechers has experienced a median earnings-related price move of 8.2%, pointing to the potential for noteworthy volatility.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Skechers USA Inc (SKX, Financial) is $68.14 with a high estimate of $94.00 and a low estimate of $50.00. The average target implies an upside of 34.79% from the current price of $50.55. More detailed estimate data can be found on the Skechers USA Inc (SKX) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, Skechers USA Inc's (SKX, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Skechers USA Inc (SKX, Financial) in one year is $70.09, suggesting a upside of 38.65% from the current price of $50.55. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Skechers USA Inc (SKX) Summary page.
SKX Key Business Developments
Release Date: February 06, 2025
- Full-Year Revenue: $9.04 billion, a 13% increase on a constant currency basis.
- Full-Year Earnings Per Share (EPS): $4.40, a 26% increase.
- Gross Margin: 53.2% for the full year.
- Operating Margin: 10.1% for the full year.
- Fourth-Quarter Revenue: $2.21 billion, a 13% increase.
- Fourth-Quarter EPS: $0.86 on a constant currency basis, a 54% increase year over year.
- Domestic Sales Growth: 18% in the fourth quarter.
- International Sales Growth: 10% in the fourth quarter.
- Wholesale Sales Growth: 17% in the fourth quarter.
- Direct-to-Consumer Sales Growth: 8.4% in the fourth quarter.
- Store Count: 5,296 Skechers stores worldwide at quarter end.
- Cash and Investments: $1.38 billion at quarter end.
- Inventory: $1.92 billion, a 26% increase year over year.
- Capital Expenditures: $133.4 million in the fourth quarter.
- Share Repurchase: Approximately 5.2 million shares repurchased during the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Skechers USA Inc (SKX, Financial) achieved a record annual sales of over $9 billion on a constant currency basis, marking a 13% increase.
- The company reported a strong gross margin of 53.2% and a double-digit operating margin of 10.1%.
- Skechers USA Inc (SKX) expanded its product offerings into new categories such as soccer, basketball, and cricket, leveraging partnerships with world-class athletes.
- The company opened 77 company-owned stores in the fourth quarter, including its first stores in the Philippines and Prague, indicating a strategic expansion.
- Skechers USA Inc (SKX) maintained a healthy balance sheet with $1.38 billion in cash, cash equivalents, and investments, and repurchased approximately 5.2 million shares during the year.
Negative Points
- The strengthening of the US dollar resulted in unfavorable foreign currency exchange headwinds, significantly impacting reported results.
- Skechers USA Inc (SKX) faced challenges in China, with a reported 11% decline in sales due to a difficult macroeconomic environment.
- The company experienced supply chain disruptions, particularly due to the closure of the Suez Canal, leading to increased in-transit inventory.
- Newly implemented global minimum tax regulations are expected to elevate the company's effective tax rate, impacting net earnings.
- Skechers USA Inc (SKX) anticipates headwinds from incremental US tariffs on goods from China, which could affect production costs and pricing strategies.
