01-06-2016, 09:31 AM
Some info on the Q3 miss, that caused the major sell-off:
The Manhattan Beach, CA-based company reported earnings of 58 cents per share, topping analysts' 54 cents per share expectations. The company had reported sales of $856.2 million, missing analysts' $877 million expectations. On a non-adjusted basis, the company reported earnings of 43 cents per share after being hurt by currency headwinds that totaled $13.5 million and legal expenses of about $5 million from personal injury settlements tied to its toning footwear business. Additionally, the company has paid $6 million in legal fees and costs related to its ongoing litigation against rival Converse, which made a claim of trademark infringement over shoes it says resemble Converse's iconic Chuck Taylor sneaker.
Skechers (SKX) Stock Plunges as Revenue Misses Expectations - TheStreet
Skechers U.S.A. Inc. lost almost a third of its value after quarterly sales trailed analysts’ estimates for the first time in two years, raising concern that the shoemaker’s growth streak is waning. While revenue rose 27 percent to $856.2 million in the third quarter, that fell short of analysts’ $876.6 million average estimate. The last time Skechers’ sales missed projections was in the quarter that ended in October 2013. Skechers had been on a roll, with surging sales of its shoes helping the shares more than double this year. That hot streak made the miss especially disappointing for investors. Chief Operating Officer David Weinberg said in a statement Thursday that the "sluggish" economic environment in the U.S. affected domestic sales, while the dollar’s strength restrained its growth abroad. Net income rose 30 percent to $66.6 million, or 43 cents a share.
Skechers Shares Plunge After First Sales Miss in Two Years - Bloomberg Business
Citigroup’s Corinna Van der Ghinst and Kate McShane contend that the “bear concerns are overdone” after Skechers USA (SKX) big earnings miss: Ann Parry/ ZUMAPRESS.com 1) We acknowledge US retail challenges could continue into holiday as retailers are likely to get increasingly promotional, which could carry over into cautious orders/cancellations for Spring. As a result, we reduced our US wholesale ests for Q4 & all of FY16 to assume a softer environment. Our TP goes to $44 (details below). However, Skechers’ Q3 US wholesale was still +DD despite a tougher environ.; 2) We’ve noted Skechers is a stock where investors tend to pull the trigger first & ask questions later. However, the LT thesis remains intact in our view, led by int’l & signif. margin upside. With after-mkt shares at ~18x our updated FY16 EPS (in-line w/ peers), today’s pullback creates a rare buying oppty that we haven’t seen w/ the stock up 150% YTD. Even on our reduced ests, Skechers is still poised to deliver EPS growth at 3x the peer avg (+LDD%).
Skechers: A Rare Buying Opportunity? - Stocks to Watch - Barrons.com