Skechers USA Inc. (SKX) Soaring on Quarterly Sales Forecast

01:25 10/19/2018

Months after gapping from $33.50 to $24.50, Skechers SKX  is showing big signs of life. In fact, the stock is up 14% on the day to $29.75. All thanks to its quarterly sales forecast. While it may have provided a mixed third quarter report, Q4 guidance was strong. In fact, the company says sales this quarter will be at least $1.1 billion, says the company. EPS is expected to fall in a range of $0.20 and $0.25. Analysts were expecting revenue and EPS of $1.08 billion and $0.18, respectively. In its third quarter, SKX posted revenue of $1.176 billion – up 7.5% year over year. However, that did fall short of analyst expectations of $40 million. Much of that can be blamed on currency headwinds, which reduced revenue growth by a percentage point. Revenue was driven by an 11.8% increase in international wholesale revenue, and a 10.6% jump in global retail sales. EPS for the quarter was 58 cents, which was a penny short from last year. However, it was still six cents better than expectations. Gross margins were up 0.4 percentage points, which offset a jump in operating expenses. Technically, after refilling a July 2018 bearish gap, we’d like to see a gap frill at $42. We believe it’s possible if the company can turn in even better numbers going forward.

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