04-22-2016, 11:28 PM
Yes, we mostly agree with this. Comparing Skechers to Kors:
With that said, any time a retailer seemingly comes from nowhere with incredible growth, its stock is always punished. I know that sounds crazy, but the reason lies in the market's desire to look ahead, and bet on a high flying retailer's eventual collapse, whenever that may be. After all, consumers are trendy, and the hottest brands never seem to last. The best example that comes to mind is Michael Kors (NYSE:KORS).
With that said, there is one big difference between KORS and SKX: Skechers is nowhere near the end of its growth line -- its first quarter results and second quarter guidance proves that -- and it has a much better chance to maintain its growth rate long-term. For one, Skechers operates in a footwear space that is far larger than a niche industry like luxury, high-end handbags. Despite Skechers reporting upwards of $900 million per quarter, it is still a small player relative to the footwear industry as a whole. At last tally, Skechers's market share was less than 5% according to SportsOneSource, thereby giving it room to gain more share down the road.
Skechers Is Here To Stay - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha
Only if there is a substantial derailment from the present growth path, or a general market selldown will the stock buckle, in our view.