SKX - Embedded Expectations Analysis - 2021 04 09
Skechers U.S.A., Inc. (SKX:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 19.8x Uniform P/E. Even at these levels, the market has bullish expectations for the firm, but management may have concerns about their selling expenses, wholesale business growth, and pandemic-related headwinds affecting their businessSpecifically, management may have concerns about the impact of digital advertising on their selling expenses, continued increases in warehouse and distribution expenses from their e-commerce business, and potential retail closures driven by the pandemic. Furthermore, they may lack confidence in their ability to continue to manage their inventory flow through a difficult market environment, spend prudently in markets most impacted pandemic, and sustain wholesale business growth. Moreover, management may be overstating the growth opportunities in international markets as well as the potential of their new Max Cushioning campaign with Tony Romo. Finally, they may be concerned about the quality of their direct-to-consumer experience
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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