Skechers (SKX) With strong omnichannel initiatives

Skechers USA, Inc. SKX is focused on strengthening its omnichannel capabilities by expanding its direct-to-consumer business and strengthening its international presence. SKX has been enjoying growth in its domestic and international channels for some time, driven by wholesale and direct-to-consumer sales. The continued worldwide demand for its Comfort Technology footwear is steadily generating results.

In a difficult operating environment, shares of this footwear leader have gained 5.6% over the past year, thanks to the aforementioned strengths of this currently ranked No. 2 (buy) player. the industry fell 6.9% over the same period. Additionally, Zacks’ consensus estimate for Skechers’ 2022 sales and earnings per share (EPS) is currently pegged at $7.11 billion and $2.82 each, suggesting growth of 13.2, respectively. % and 8.9% compared to the corresponding figures published a year ago. For the first quarter, Zacks’ consensus estimate for sales and EPS is $1.69 billion and 72 cents, respectively, indicating increases of 18.5% and 14.3% each compared to the corresponding figures of the previous year.

We note that management has forecast sales in the range of $7 billion to $7.2 billion for 2022, higher than the $6.29 billion recorded in 2021. For 2022, management expects earnings per share in the range $2.70 to $2.90, suggesting an increase from adjusted earnings of $2.59 delivered in 2021. Skechers is looking at Q1 2022 sales of between $1.675 billion and $1.725 billion and earnings in the range of 70 to 75 cents per share. SKX had sales of $1.43 billion and earnings of 63 cents per share.

Retail Strategies

Skechers has a diverse portfolio of brands, including a wide range of fashion, sports, non-sports and work shoes at attractive prices. SKX now focuses on comfort-oriented footwear and apparel. Management is constantly making strategic investments to improve infrastructure worldwide, primarily e-commerce platforms and distribution centers. SKX’s focus on increasing omnichannel capabilities, including digital power, bodes well.

SKX has been directing resources for some time to improve its digital capabilities, including increasing website functionality, mobile app, and loyalty program. Investments made to integrate the store and digital ecosystems to develop a seamless omnichannel experience are likely to drive increased sales. Skechers has updated its point-of-sale systems to better interact with customers, both offline and online. Initiatives such as “Buy Online, Pick Up In Store” and “Buy Online, Pick Up Curbside” are worth mentioning.

Skechers continued to roll out e-commerce sites in Q4 2021 as well as launch platforms in the UK, India, Germany and Austria. Management plans to expand its e-commerce business to other markets this year. These investments underscore SKX’s progress as an omnichannel retailer. In the quarter under review, its domestic e-commerce business jumped 115% from the level of the same period in 2019.

Skechers is also committed to designing and developing new products. In 2022, management plans to introduce more innovative and comfortable technology products, create cross-platform marketing campaigns, and launch more e-commerce sites globally. SKX’s comfort, innovation, style and quality resonate well with its consumers’ choice.

In addition, Skechers’ international operations remain an important sales driver. SKX is poised to increase its global reach in the footwear market through its distribution networks, subsidiaries and joint ventures. In the fourth quarter of 2021, international sales increased 34% year-over-year and contributed 65% to total sales. This rise was led by strong wholesale and direct-to-consumer businesses due to lenient pandemic restrictions.

International Wholesale segment sales increased 30%, supported by growth across all channels and brand strength. In addition, the 123.5% growth in Distributor sales, representing a 61.3% sales increase in Europe and an 8.6% sales improvement in China, boosted the International Wholesale business. Global same-store same-store sales increased 21%, of which 36% internationally.

In conclusion, Skechers should continue to perform well with such strong efforts.

Look at these solid picks too

Some higher ranked stocks are Gildan Sportswear GILL, Columbia Sportswear COLM and Delta Clothing DLA.

Gildan Activewear, which manufactures and sells various wearable products, currently sports a Zacks #1 (Strong Buy) rating. Gildan Activewear shares are up 25.3% over the past year. You can see the full list of today’s Zacks #1 Rank stocks here.

Zacks’ consensus estimate for Gildan Activewear’s 2022 sales and EPS suggests growth of 8.9% and 3.3%, respectively, from corresponding figures released a year ago. GIL has a surprise on earnings for the last four quarters of 66.6% on average.

Columbia Sportswear currently has a Zacks Rank #2 (Buy). COLM has a surprise on earnings for the last four quarters of 203.3% on average. Shares of COLM have risen 2.5% over the past year.

Zacks consensus estimate for Columbia Sportswear current year sales suggests growth of 17.7% and the same for EPS indicates growth of 8.1% over reported period figures corresponding to the previous year.

Delta Apparel currently carries a Zacks ranking of 2. DLA has a trailing four-quarter earnings surprise of 21.3%, on average. Shares of DLA are up 11.1% over the past year.

Zacks consensus estimate for Delta Apparel sales and earnings per share for the current fiscal year suggests growth of 12.3% and 19.1%, respectively, over reported figures for the corresponding period of the previous year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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