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Skechers Stock Trading Above 200 & 50-Day SMA: How to Play Ahead?
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Skechers U.S.A., Inc. (SKX - Free Report) has demonstrated strong upward momentum, consistently trading above both its 200-day and 50-day simple moving averages (SMA), which are important indicators of price stability and long-term bullish trends. As of Sept. 13, SKX was trading at $67.30, which surpassed both its 200-day SMA of $63.87 and its 50-day SMA of $65.44, highlighting a continued uptrend.
SMA is a key tool in technical analysis used to assess price trends by smoothing out short-term fluctuations, offering a clearer view of the stock's longer-term direction. This technical strength, along with the stock's sustained momentum, reflects positive market sentiment and investor confidence in Skechers' financial health and growth prospects.
The company has seen a substantial 43.2% jump in its stock price over the past year compared with the Zacks Shoes and Retail Apparel industry’s steep decline of 15.4%. Also, the company outpaced the broader Consumer Discretionary sector's 8.5% growth and the S&P 500 Index's 25.7% rise over the said period. Currently, SKX is trading 10.4% below its 52-week high of $75.09 reached on June 12, 2024.
Image Source: Zacks Investment Research
From a valuation perspective, Skechers’ shares present an attractive opportunity, trading at a discount relative to industry benchmarks. With a forward 12-month price-to-earnings ratio of 14.52, below the five-year industry’s average of 21.78, the stock offers value for investors seeking exposure to the sector. Moreover, SKX’s current Value Score of A reinforces its attractiveness.
Skechers Gains on Multi-Brand Strategy & Global Expansion
SKX is reinforcing its market position through a multi-brand strategy that spans fashion, athletic, non-athletic and work footwear. This approach allows the company to introduce products while minimizing competition within its lines, catering to a broad and diverse customer base. The company's shift toward comfort-driven footwear and apparel aligns with the rising demand for more relaxed styles.
To enhance its omnichannel capabilities and expand its Direct-to-Consumer (DTC) business, Skechers is making significant investments in global infrastructure, including retail stores, e-commerce platforms and distribution centers. Key digital initiatives like improved website features, mobile apps, loyalty programs and upgraded point-of-sale systems aim to boost customer engagement and drive sales.
Skechers’ wholesale segment showed strong growth in fiscal 2024, with a 5.5% year-over-year increase in second-quarter wholesale sales, reaching $1.13 billion. This growth was driven by a 14% rise in domestic wholesale sales, particularly in men’s, women’s and kids’ footwear. The DTC segment also delivered a robust performance, with sales rising 9.2% to $1.03 billion, reflecting the success of Skechers’ efforts to enhance customer engagement and retail experiences.
International operations remain a key driver of growth, accounting for 60% of the total revenues. In the second quarter, international sales grew 6.9% year over year, with strong performances in the EMEA region (up 13.7%) and moderate growth in the APAC and China. This underscores the importance of Skechers’ global reach and ability to adapt to diverse consumer preferences across regions.
Image Source: Zacks Investment Research
SKX Ups 2024 Outlook, Pursues $10B Sales by 2026
Skechers raised its fiscal 2024 outlook, projecting sales between $8.88 billion and $8.98 billion, up from the previously mentioned $8.73-$8.88 billion. This represents growth from the $8 billion in sales reported in fiscal 2023. The company has also increased its earnings per share (EPS) forecast to $4.08-$4.18, higher than the earlier stated $3.95-$4.10, suggesting solid growth from the $3.49 EPS in the prior year.
Skechers is set to invest $325-$375 million in capital expenditure to support key strategic initiatives, such as store openings, omnichannel expansion and improving its distribution infrastructure. These investments align with its goal of reaching $10 billion in annual sales by 2026.
Skechers' Rising Costs & Regional Challenges
While there are positive aspects, rising operating costs could strain margins and profitability if not adequately controlled, particularly as revenue struggles persist in some regions and segments. In the second quarter, operating expenses rose 16% year over year, reaching $977.9 million.
Skechers is grappling with significant regulatory and market hurdles in key regions like China and India, which may negatively impact its stock. Economic instability and weakening consumer demand in China pose ongoing risks, while new regulatory standards in India have hurt sales and caused inventory problems. These issues have already contributed to stagnant international wholesale growth and could weigh on the company’s performance if broader macroeconomic and regulatory challenges persist.
Conclusion
Investors should consider Skechers due to its strong upward momentum and positive technical trends. The company's focus on global expansion, multi-brand strategy and enhancing its omnichannel presence supports its growth potential. Skechers' solid market position and ability to adapt to shifting consumer preferences provide further confidence in its long-term performance.
While regional challenges and rising costs pose risks, the company's strategic initiatives make it poised for continued success in the retail sector. The company currently has a Zacks Rank #3 (Hold).
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 10.7% and 11.6%, respectively, from the fiscal 2023 reported figures. BOOT has a trailing four-quarter average earnings surprise of 7.1%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It has a Zacks Rank #1 at present. ANF delivered a 16.8% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 63.4% and 12.6%, respectively, from the fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 28%.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.5%.
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Skechers Stock Trading Above 200 & 50-Day SMA: How to Play Ahead?
Skechers U.S.A., Inc. (SKX - Free Report) has demonstrated strong upward momentum, consistently trading above both its 200-day and 50-day simple moving averages (SMA), which are important indicators of price stability and long-term bullish trends. As of Sept. 13, SKX was trading at $67.30, which surpassed both its 200-day SMA of $63.87 and its 50-day SMA of $65.44, highlighting a continued uptrend.
SMA is a key tool in technical analysis used to assess price trends by smoothing out short-term fluctuations, offering a clearer view of the stock's longer-term direction. This technical strength, along with the stock's sustained momentum, reflects positive market sentiment and investor confidence in Skechers' financial health and growth prospects.
The company has seen a substantial 43.2% jump in its stock price over the past year compared with the Zacks Shoes and Retail Apparel industry’s steep decline of 15.4%. Also, the company outpaced the broader Consumer Discretionary sector's 8.5% growth and the S&P 500 Index's 25.7% rise over the said period. Currently, SKX is trading 10.4% below its 52-week high of $75.09 reached on June 12, 2024.
Image Source: Zacks Investment Research
From a valuation perspective, Skechers’ shares present an attractive opportunity, trading at a discount relative to industry benchmarks. With a forward 12-month price-to-earnings ratio of 14.52, below the five-year industry’s average of 21.78, the stock offers value for investors seeking exposure to the sector. Moreover, SKX’s current Value Score of A reinforces its attractiveness.
Skechers Gains on Multi-Brand Strategy & Global Expansion
SKX is reinforcing its market position through a multi-brand strategy that spans fashion, athletic, non-athletic and work footwear. This approach allows the company to introduce products while minimizing competition within its lines, catering to a broad and diverse customer base. The company's shift toward comfort-driven footwear and apparel aligns with the rising demand for more relaxed styles.
To enhance its omnichannel capabilities and expand its Direct-to-Consumer (DTC) business, Skechers is making significant investments in global infrastructure, including retail stores, e-commerce platforms and distribution centers. Key digital initiatives like improved website features, mobile apps, loyalty programs and upgraded point-of-sale systems aim to boost customer engagement and drive sales.
Skechers’ wholesale segment showed strong growth in fiscal 2024, with a 5.5% year-over-year increase in second-quarter wholesale sales, reaching $1.13 billion. This growth was driven by a 14% rise in domestic wholesale sales, particularly in men’s, women’s and kids’ footwear. The DTC segment also delivered a robust performance, with sales rising 9.2% to $1.03 billion, reflecting the success of Skechers’ efforts to enhance customer engagement and retail experiences.
International operations remain a key driver of growth, accounting for 60% of the total revenues. In the second quarter, international sales grew 6.9% year over year, with strong performances in the EMEA region (up 13.7%) and moderate growth in the APAC and China. This underscores the importance of Skechers’ global reach and ability to adapt to diverse consumer preferences across regions.
Image Source: Zacks Investment Research
SKX Ups 2024 Outlook, Pursues $10B Sales by 2026
Skechers raised its fiscal 2024 outlook, projecting sales between $8.88 billion and $8.98 billion, up from the previously mentioned $8.73-$8.88 billion. This represents growth from the $8 billion in sales reported in fiscal 2023. The company has also increased its earnings per share (EPS) forecast to $4.08-$4.18, higher than the earlier stated $3.95-$4.10, suggesting solid growth from the $3.49 EPS in the prior year.
Skechers is set to invest $325-$375 million in capital expenditure to support key strategic initiatives, such as store openings, omnichannel expansion and improving its distribution infrastructure. These investments align with its goal of reaching $10 billion in annual sales by 2026.
Skechers' Rising Costs & Regional Challenges
While there are positive aspects, rising operating costs could strain margins and profitability if not adequately controlled, particularly as revenue struggles persist in some regions and segments. In the second quarter, operating expenses rose 16% year over year, reaching $977.9 million.
Skechers is grappling with significant regulatory and market hurdles in key regions like China and India, which may negatively impact its stock. Economic instability and weakening consumer demand in China pose ongoing risks, while new regulatory standards in India have hurt sales and caused inventory problems. These issues have already contributed to stagnant international wholesale growth and could weigh on the company’s performance if broader macroeconomic and regulatory challenges persist.
Conclusion
Investors should consider Skechers due to its strong upward momentum and positive technical trends. The company's focus on global expansion, multi-brand strategy and enhancing its omnichannel presence supports its growth potential. Skechers' solid market position and ability to adapt to shifting consumer preferences provide further confidence in its long-term performance.
While regional challenges and rising costs pose risks, the company's strategic initiatives make it poised for continued success in the retail sector. The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks are Boot Barn Holdings, Inc. (BOOT - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Steven Madden, Ltd. (SHOO - Free Report) .
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 10.7% and 11.6%, respectively, from the fiscal 2023 reported figures. BOOT has a trailing four-quarter average earnings surprise of 7.1%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It has a Zacks Rank #1 at present. ANF delivered a 16.8% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 63.4% and 12.6%, respectively, from the fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 28%.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.5%.