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Skechers (SKX) Thrives on Diversification & Digital Expansion
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Skechers U.S.A., Inc. (SKX - Free Report) remains at the forefront due to its strategic focus on diverse brand offerings, advanced digital capabilities and ambitious global expansion. The company's well-formulated growth strategies, particularly evident in its direct-to-consumer (DTC) and international business segments, not only mirror its adeptness in adapting to evolving consumer preferences but also strengthen its position for ongoing growth and market leadership.
This Zacks Rank #1 (Strong Buy) company has demonstrated remarkable market performance over the past six months, significantly outpacing the Zacks Shoes and Retail Apparel industry. During this period, SKX shares surged 16.5% against the industry’s 13.2% decline. This performance underscores Skechers' robust market strategies and its ability to outperform even during challenging economic times.
Image Source: Zacks Investment Research
Let’s Dig Into Details
To sustain its competitive edge and achieve sales targets, Skechers is committed to strategic investments in infrastructure and technology. Plans include opening new retail stores, expanding omnichannel capabilities and establishing a second distribution center in China. These initiatives are designed to enhance the company’s operational efficiency and improve its reach to consumers worldwide, ultimately boosting shareholder value. Skechers' financial strength and strategic investments suggest a strong trajectory toward reaching its operational and financial goals in 2024 and beyond.
Skechers continues to expand its diverse portfolio, which includes a variety of styles such as fashion, athletic, non-athletic and work footwear. The company's strategy of managing multiple brands concurrently allows it to launch new offerings without cannibalizing existing products, thereby attracting a wider array of customers.
The company is intensifying its digital efforts by upgrading its website features, mobile applications and customer loyalty programs. It aims to integrate its physical store experiences with its digital platforms to provide a seamless shopping experience that encourages higher sales volumes. Enhancements to point-of-sale systems are also being implemented to improve customer interactions both online and in store, thus further driving sales and customer satisfaction.
International business remains a pivotal growth driver for Skechers, with international sales increasing 15.2% in the first quarter , thereby accounting for 64.5% of total sales. The APAC region, in particular, has grown 15.9%, reflecting the company’s ability to adapt to diverse consumer preferences and capitalize on emerging market trends.
Wholesale and Direct-to-Consumer Segments - Growth Drivers
The wholesale segment of Skechers continues to show growth prospects through 2024, bolstered by consistent product demand and strategic improvements in logistics and retailer partnerships. In the first quarter, wholesale revenues grew 9.8% year over year to $1.42 billion, with gains across all regions. This growth is supported by enhanced order management systems and improved customer service practices.
Meanwhile, the DTC segment recorded a 17.3% year-over-year increase in sales, reaching $829.9 million in the first quarter. This robust growth is visible across both physical stores and e-commerce platforms, driven by effective marketing strategies and continuous product innovations, especially in comfort technologies.
Outlook and Projections
For the fiscal year 2024, Skechers projects its sales to range between $8.73 billion and $8.88 billion, marking an upward revision from the earlier estimated range of $8.6-$8.8 billion. This forecast represents a notable increase from sales of $8 billion recorded in 2023. Additionally, the company expects its earnings per share to lie between $3.95 and $4.10, up from $3.49 in the previous year.
Skechers plans to invest between $325 million and $375 million in capital expenditures. This funding is earmarked for key strategic initiatives, including the opening of new stores, the expansion of omnichannel capabilities and enhancements to the distribution infrastructure. The company is confidently progressing toward its ambitious target of reaching $10 billion in annual sales by 2026.
The Zacks Consensus Estimate for Canada Goose’s current fiscal-year earnings indicates growth of 13.7% from the year-ago period’s reported figures. GOOS has a trailing four-quarter average earnings surprise of 70.9%.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank of 1, at present.
The consensus estimate for The Gap’s current fiscal-year earnings and sales indicates declines of 0.3% and 3.5% from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently sports a Zacks Rank of 1. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 24.2% and 6.4% from the year-ago period’s reported figures.
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Skechers (SKX) Thrives on Diversification & Digital Expansion
Skechers U.S.A., Inc. (SKX - Free Report) remains at the forefront due to its strategic focus on diverse brand offerings, advanced digital capabilities and ambitious global expansion. The company's well-formulated growth strategies, particularly evident in its direct-to-consumer (DTC) and international business segments, not only mirror its adeptness in adapting to evolving consumer preferences but also strengthen its position for ongoing growth and market leadership.
This Zacks Rank #1 (Strong Buy) company has demonstrated remarkable market performance over the past six months, significantly outpacing the Zacks Shoes and Retail Apparel industry. During this period, SKX shares surged 16.5% against the industry’s 13.2% decline. This performance underscores Skechers' robust market strategies and its ability to outperform even during challenging economic times.
Image Source: Zacks Investment Research
Let’s Dig Into Details
To sustain its competitive edge and achieve sales targets, Skechers is committed to strategic investments in infrastructure and technology. Plans include opening new retail stores, expanding omnichannel capabilities and establishing a second distribution center in China. These initiatives are designed to enhance the company’s operational efficiency and improve its reach to consumers worldwide, ultimately boosting shareholder value. Skechers' financial strength and strategic investments suggest a strong trajectory toward reaching its operational and financial goals in 2024 and beyond.
Skechers continues to expand its diverse portfolio, which includes a variety of styles such as fashion, athletic, non-athletic and work footwear. The company's strategy of managing multiple brands concurrently allows it to launch new offerings without cannibalizing existing products, thereby attracting a wider array of customers.
The company is intensifying its digital efforts by upgrading its website features, mobile applications and customer loyalty programs. It aims to integrate its physical store experiences with its digital platforms to provide a seamless shopping experience that encourages higher sales volumes. Enhancements to point-of-sale systems are also being implemented to improve customer interactions both online and in store, thus further driving sales and customer satisfaction.
International business remains a pivotal growth driver for Skechers, with international sales increasing 15.2% in the first quarter , thereby accounting for 64.5% of total sales. The APAC region, in particular, has grown 15.9%, reflecting the company’s ability to adapt to diverse consumer preferences and capitalize on emerging market trends.
Wholesale and Direct-to-Consumer Segments - Growth Drivers
The wholesale segment of Skechers continues to show growth prospects through 2024, bolstered by consistent product demand and strategic improvements in logistics and retailer partnerships. In the first quarter, wholesale revenues grew 9.8% year over year to $1.42 billion, with gains across all regions. This growth is supported by enhanced order management systems and improved customer service practices.
Meanwhile, the DTC segment recorded a 17.3% year-over-year increase in sales, reaching $829.9 million in the first quarter. This robust growth is visible across both physical stores and e-commerce platforms, driven by effective marketing strategies and continuous product innovations, especially in comfort technologies.
Outlook and Projections
For the fiscal year 2024, Skechers projects its sales to range between $8.73 billion and $8.88 billion, marking an upward revision from the earlier estimated range of $8.6-$8.8 billion. This forecast represents a notable increase from sales of $8 billion recorded in 2023. Additionally, the company expects its earnings per share to lie between $3.95 and $4.10, up from $3.49 in the previous year.
Skechers plans to invest between $325 million and $375 million in capital expenditures. This funding is earmarked for key strategic initiatives, including the opening of new stores, the expansion of omnichannel capabilities and enhancements to the distribution infrastructure. The company is confidently progressing toward its ambitious target of reaching $10 billion in annual sales by 2026.
Stocks to Consider
A few better-ranked stocks are Canada Goose (GOOS - Free Report) , The Gap, Inc. (GPS - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
Canada Goose is a global outerwear brand. The company sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal-year earnings indicates growth of 13.7% from the year-ago period’s reported figures. GOOS has a trailing four-quarter average earnings surprise of 70.9%.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company sports a Zacks Rank of 1, at present.
The consensus estimate for The Gap’s current fiscal-year earnings and sales indicates declines of 0.3% and 3.5% from the year-ago period’s reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently sports a Zacks Rank of 1. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 24.2% and 6.4% from the year-ago period’s reported figures.