10-20-2017, 07:00 AM
Well, we're only three weeks into this portfolio but we already have two big winners with Nutanix and Sketchers. The latter posted stellar Q3 results just now:
Shares of Skechers (NYSE:SKX) soar in after-hours trading after a resounding Q3 profit beat off of broad-based sales leverage. A 26% jump in the company's international wholesales business helped lead to a 16% increase in total revenue during the quarter. Management cited strong results out the U.K. and China. Gross profit was up 190 bps to 47.5% of sales. Skechers guided for Q4 revenue of $860M to $885M. Previously: Skechers beats by $0.15, beats on revenue (Oct. 19) SKX +20.27% AH to $28.90, a level not seen since the middle part of August.
Skechers soars after jogging past profit estimates - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha
And we argued that they were cheap and the worries were overblown:
- No retail apocalypse for Skechers. Its US stores revenues are up 14.5% with same store sales up a whopping 7.7%.
- Its international business is also booming, and after heavy investments this year, that will show off on the bottom line next year.
- Yet the shares went down after the Q2 good news show, except the earnings miss, but that should be redressed next year.
- An EV/S valuation of 0.8 seems too low in this market for a company growing in the mid teens.
- Especially considering a very healthy balance sheet, a solid profit outlook, and plenty of cash generation.
SHU Portfolio: Skechers Is Remarkably Cheap - Skechers USA Inc. (NYSE:SKX) | Seeking Alpha