Report
Valens Research

SKX - Embedded Expectations Analysis - 2019 05 03

Skechers U.S.A., Inc. (SKX:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with an 11.9x Uniform P/E, implying bearish expectations for the firm, and management has concerns about wholesale retail sales, store remodeling, and their e-commerce platform.

Specifically, management may lack confidence in their ability to increase sales from wholly-owned subsidiaries and normalize ad spend. Moreover, they may be concerned about the impact of retail bankruptcies and soft demand on sales and the progress of their distribution center opening and store remodeling efforts. Furthermore, they may be exaggerating their ad coverage and the potential of their new e-commerce platform, and may be downplaying concerns about Mexican joint venture accretion. Finally, they may be concerned about their ability to maintain their performance trajectory, grow their women's apparel business, and provide customers with products through any channel.
Underlying
Skechers U.S.A. Inc. Class A

Skechers USA designs and markets Skechers-branded lifestyle footwear for men, women and children, and performance footwear for men and women under the Skechers Performance brand name. The company also designs and markets men's and women's Skechers branded lifestyle apparel, and license the Skechers brand to others for accessories, leather goods, eyewear and scrub manufacturers, among others. The company's product offering is sold through department and specialty stores, athletic and independent retailers, boutiques and internet retailers. In addition to wholesale distribution, the company's footwear is available at its direct-to-consumer websites and its own retail stores.

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Valens Research
Valens Research

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