Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Skechers (SKX) .Skechers currently has an average brokerage recommendation ...

Sales and Financial Performance - Skechers reported a significant growth in net sales, with a focus on expanding its product offerings and consumer base[18]. - Sales increased 12.1% to $8.97 billion for the year ended December 31, 2024, setting a new annual record[128]. - Sales for the year ended December 31, 2024, reached $8,969,351, a 12.1% increase from $8,000,342 in 2023[190]. - Net earnings attributable to Skechers U.S.A., Inc. increased by $93.7 million, or 17.2%, to $639.5 million[130]. - Net earnings for the year ended December 31, 2024, were $729.6 million, an increase of 12.3% from $649.9 million in 2023[196]. - Gross profit rose by $615.0 million, or 14.8%, to $4.77 billion, with a gross margin increase of 120 basis points to 53.2% due to lower costs per unit[132]. - Operating expenses increased by $495.6 million, or 14.7%, to $3.86 billion, with selling expenses up 18.3% and general and administrative expenses up 13.8%[133]. - Basic net earnings per share rose to $4.21, a 19.3% increase from $3.53 in the prior year[190]. - Total assets increased to $8,455,758, up from $7,547,351, representing a growth of 12.0% year-over-year[188]. - Cash and cash equivalents were $1,116.5 million, with 92.0% held outside the U.S.[144]. Market Presence and Expansion - The company operates through two segments: Wholesale and Direct-to-Consumer, with growth expected from new partners and expanded shelf space[19][20]. - Skechers aims to expand its market presence through new product introductions and leveraging third-party digital marketplaces[20]. - As of December 31, 2024, the company had 5,296 Skechers-branded retail stores in 122 countries[104]. - The company plans to continue developing new comfort innovations and expanding its distribution infrastructure to support growth[129]. - The company aims to implement market strategies to broaden its global reach and attract new partners and consumers[129]. Employee and Corporate Responsibility - As of December 31, 2024, Skechers employed approximately 20,100 individuals globally, with about 10,100 full-time and 10,000 part-time employees[35]. - Skechers is committed to corporate responsibility, investing in environmental, social, and governance (ESG) initiatives to improve community and environmental health[39]. - In 2024, Skechers donated $1.6 million to Petco Love Foundation and $2.0 million to the Skechers Foundation, supporting community and youth well-being initiatives[43]. - The company has initiated a new employee stock purchase plan, which is expected to enhance employee engagement and retention[194]. Risks and Challenges - The company faces intense competition in the footwear industry, which may lead to price reductions, cost increases, and reduced profit margins if not managed effectively[49]. - Skechers' international sales are primarily derived from manufacturing in China and Vietnam, exposing the company to risks such as political instability and labor cost increases[57]. - Global economic conditions and conflicts may adversely affect the company's ability to sell products, potentially impacting financial results[63]. - A global financial crisis could tighten credit markets and lead to higher inflation, adversely affecting customer demand and distribution channels[64]. - Natural disasters and climate change could disrupt operations and increase costs, affecting revenue and business continuity[66]. - Foreign currency exchange rate fluctuations can impact sales and profitability, complicating financial comparisons across periods[68]. - Changes in tax laws and trade policies may impose additional costs and affect competitive pricing, impacting sales and operations[70][72]. - Compliance with labor and trade laws by contract manufacturers and suppliers is critical; violations could harm the company's reputation and operations[74]. - Unanticipated litigation could divert management's attention and incur substantial legal fees, adversely affecting financial condition[76]. Operational and Logistical Considerations - Skechers' logistics and distribution systems are critical for product delivery, with potential disruptions from natural disasters or system failures impacting operations[61]. - The company has invested in industry-standard security technology to protect personal information, but any compromise could result in legal liabilities and damage to brand reputation[80]. - The company relies heavily on IT systems for e-commerce and customer data management, and disruptions could negatively impact business operations[84]. - A multi-year Enterprise Resource Planning (ERP) implementation is underway, requiring significant investment and carrying risks of operational disruptions and cost overruns[85]. Marketing and Brand Strategy - The company has a diverse marketing strategy, utilizing celebrities and athletes to promote its brand, including partnerships with figures like Harry Kane and Joel Embiid[28][27]. - Skechers focuses on innovative comfort technologies in its footwear, such as Skechers Hands Free Slip-ins® and Skechers Arch Fit®[23]. - The company emphasizes sustainability, with several distribution centers designed for LEED certification, including a LEED Gold certified facility in Southern California[40]. - The company emphasizes environmentally sustainable practices, including the introduction of a collection utilizing recycled materials[41]. Financial Management and Investments - The company has announced a new share repurchase program allowing for the purchase of up to $1.0 billion in shares, with $789.9 million remaining available[152]. - Capital expenditures for 2024 were $416.8 million, with expectations for 2025 to be between $600 million and $700 million[150]. - The company recorded a cumulative foreign currency translation loss of $97.8 million and a gain of $11.5 million for the years ended December 31, 2024 and 2023, respectively[172]. - Total current liabilities increased to $2,256,484, up from $1,660,867, marking a 35.8% rise[188]. - Inventory levels increased to $1,919,386, compared to $1,525,409 in 2023, representing a 25.8% increase[188].

Group 1 - The core viewpoint is that Skechers U.S.A. has shown significant revenue growth, increasing from $7.44 billion to $8.97 billion, which represents a 20% total increase [1] - The company's performance has exceeded previous revenue estimates, with an anticipated revenue of $8 billion for 2024 being surpassed [1] - The focus of the analysis is on intrinsic value, prioritizing undervalued and growing companies, particularly those in early development stages [1]

Core Insights - National nonprofit Petco Love, in collaboration with BOBS® from Skechers®, awarded a total of $500,000 to 25 winning animal welfare organizations, with the grand prize of $100,000 going to the Animal Rescue League of Iowa [1][3][5] Group 1: Awards and Grants - The $500,000 in grants is aimed at supporting animal shelters and rescues across the United States, coinciding with Valentine's Day [1][5] - Winning grants range from $10,000 to $100,000, with the Animal Rescue League of Iowa receiving the largest grant [6][7] Group 2: Campaign and Participation - The Petco Love Stories campaign received thousands of submissions from pet parents, highlighting the transformative impact of adopted pets on their lives [5][6] - This year's campaign introduced new submission formats, allowing participants to share their stories in written form or via social media videos [6] Group 3: Impact and Community Engagement - The winning stories emphasize the importance of pet adoption and the positive changes it brings to both pets and their owners [5][9] - Since 2013, the Petco Love Stories campaign has awarded over $8 million in grants to animal welfare organizations, showcasing the significance of pet adoption [9] Group 4: Organizational Background - Petco Love has invested nearly $410 million in adoption and lifesaving efforts since its founding in 1999, helping find homes for nearly 7 million pets [10] - BOBS from Skechers has contributed over $12 million to support shelter pets, aiding more than 2.3 million animals over the past nine years [12]

Core Insights - Skechers' international operations are crucial for assessing its financial strength and growth potential, especially given the interconnected global economy [2][3] Group 1: Financial Performance - The total revenue for Skechers in the quarter ending December 2024 was $2.21 billion, reflecting a 12.8% increase [4] - Revenue from Europe, Middle East & Africa was $478.6 million, accounting for 21.63% of total revenue, which was a surprise decline of -2.42% compared to analyst expectations [5] - Asia Pacific contributed $642.4 million, or 29.04% of total revenue, also showing a surprise decline of -4.4% from expectations [6] Group 2: Revenue Projections - Analysts project Skechers will report $2.41 billion in total revenue for the current fiscal quarter, a 7.1% increase year-over-year, with Europe, Middle East & Africa expected to contribute 30.4% and Asia Pacific 26.7% [7] - For the full year, total revenue is projected to reach $9.78 billion, indicating a 9.1% rise from the previous year, with regional contributions of 26.1% from Europe, Middle East & Africa and 27% from Asia Pacific [8] Group 3: Market Dynamics - The reliance on foreign markets presents both opportunities and challenges for Skechers, necessitating close monitoring of international revenue trends to forecast future performance [9] - The current geopolitical landscape and global interconnections are critical factors influencing earnings predictions for companies with international operations [10]

Core Viewpoint - Skechers reported a decline in stock price following its Q4 2024 financial results, indicating investor concerns over slowing growth and lower-than-expected earnings per share [1][2][3]. Financial Performance - In Q4 2024, Skechers achieved sales of $2.21 billion, reflecting a 13% year-over-year increase, which was near the high end of management's guidance but slightly below market expectations [2]. - The company reported earnings per share (EPS) of $0.65, falling short of management's forecast of $0.70 to $0.75 [2][3]. Growth Outlook - Despite achieving double-digit growth in 2024 and setting all-time sales records, Skechers anticipates a slowdown in growth, projecting sales of at least $9.7 billion in 2025, which represents an increase of 8% [3]. - EPS guidance for 2025 is set at $4.30 to $4.50, indicating a modest year-over-year growth of only 3% to 8%, which suggests a potential contraction in profit margins [3]. Valuation and Stock Buyback - Skechers is currently trading at approximately 15 times forward earnings, which is considered a fair valuation, especially in the context of the stock's recent decline [4]. - The company has authorization to repurchase nearly $800 million in stock, which could be advantageous given the lower share price [4]. Market Position and Long-term Perspective - The company does not appear to be facing significant competitive pressures, as sales have increased in 2024 and are expected to continue rising in 2025 [5]. - Skechers is viewed as a solid long-term investment, although the market may experience fluctuations, and 2025 could present challenges [5].

Core Insights - Skechers U.S.A., Inc. reported fourth-quarter 2024 results with sales exceeding estimates but earnings per share (EPS) falling short, although both metrics showed year-over-year growth [1][4]. Financial Performance - The company achieved sales of $2.212 billion, slightly above the consensus estimate of $2.211 billion, reflecting a 12.8% year-over-year increase driven by 18% growth in domestic sales and 9.8% in international sales [5][6]. - EPS was reported at 65 cents, missing the Zacks Consensus Estimate of 74 cents, but representing a 16.1% increase from the previous year [4]. - On a constant currency basis, EPS was 86 cents, marking a 53.6% increase year-over-year [4]. Sales Breakdown - Wholesale sales increased 17.5% year-over-year to $1.13 billion, while Direct-to-Consumer (DTC) sales rose 8.4% to $1.08 billion [6]. - Region-wise, sales grew 14.2% in the Americas to $1.09 billion, 24.8% in EMEA to $478.6 million, and 3.3% in APAC to $642.4 million [8]. Cost and Margin Analysis - Gross profit increased 13.1% year-over-year to $1.18 billion, with a gross margin of 53.3%, up 20 basis points [9]. - Total operating expenses rose 11.2% to $1.01 billion, but as a percentage of sales, it decreased by 70 basis points to 45.8% [9][10]. Capital Expenditure and Financial Health - As of December 31, 2024, cash and cash equivalents totaled $1.12 billion, with long-term borrowings at $68.5 million and shareholders' equity at $4.28 billion [11][12]. - The company plans capital expenditures of $600-$700 million for 2025, primarily for expanding distribution centers [12]. Share Repurchase and Store Update - In Q4 2024, Skechers repurchased 1.9 million shares for $120 million, with $789.9 million remaining under the share repurchase program [13]. - As of December 31, 2024, Skechers operated 5,296 stores globally, with a net increase of 62 domestic and 206 international stores during the quarter [14]. Future Outlook - For 2025, management targets sales between $9.70 billion and $9.80 billion, with EPS expected between $4.30 and $4.50 [15]. - For Q1 2025, sales are projected to be between $2.40 billion and $2.43 billion, with EPS between $1.10 and $1.15 [15].

Core Insights - Skechers' shares fell 12% in premarket trading due to a disappointing outlook and CEO comments regarding potential tariff impacts [2][6] - The company reported adjusted earnings of $130.3 million (86 cents per share) for Q4, with revenue of $2.21 billion, which was in line with analyst expectations [2][3] - Forward-looking projections for Q1 revenue are expected to be between $2.4 billion and $2.43 billion, with EPS between $1.10 and $1.15, both below analyst consensus estimates [3][4] Financial Performance - Skechers' full-year revenue guidance is between $9.7 billion and $9.8 billion, and EPS is projected to be between $4.30 and $4.50, which are below the expected $9.86 billion and $4.86 per share [4] - The company's Q4 adjusted profits exceeded projections, but the overall outlook has raised concerns among investors [2][7] CEO Commentary - CEO John Vandemore highlighted "several headwinds and uncertainties" for 2025, including exchange rates and macroeconomic weakness in China [5] - The CEO mentioned that the recently announced US tariffs on Chinese goods have affected the company's visibility and may lead to changes in production and pricing strategies [6][7]

Financial Data and Key Metrics Changes - In 2024, Skechers achieved constant currency sales of over $9 billion, a 13% increase, and diluted earnings per share of $4.40, representing a 26% increase [8][25] - The company recorded a strong gross margin of 53.2% and a double-digit operating margin of 10.1% [8][25] - Fourth-quarter sales reached $2.21 billion, reflecting a 13% increase, with earnings per share of $0.65, a 16% increase compared to the prior year [28][35] Business Line Data and Key Metrics Changes - Wholesale sales grew by 17%, with domestic sales increasing by 31% and international sales by 10% [19][30] - Direct-to-consumer sales increased by 8.4%, with international improving by 9.3% and domestic by 6.8% [20][28] - The performance division, including soccer and basketball footwear, is expected to become increasingly important for growth [45] Market Data and Key Metrics Changes - Domestic sales rose 18%, while international sales improved by 10% [9][17] - In the Americas, sales increased by 14%, with EMEA growing by 25% and APAC by 3.3%, led by strong performance in India, Japan, South Korea, and Thailand [18][31] - China experienced a decline of 11% in sales due to a challenging macroeconomic environment [18][32] Company Strategy and Development Direction - Skechers is focused on expanding its product offerings and enhancing its distribution network to meet global consumer needs [13][16] - The company plans to invest in expanding distribution centers in the U.S., Europe, and China to support growth [24][41] - Strategic partnerships and innovative marketing campaigns are being leveraged to enhance brand awareness and drive sales [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as unfavorable foreign currency exchange rates and macroeconomic weakness in China but expressed confidence in long-term strategies [39][41] - The company expects sales in 2025 to range from $9.7 billion to $9.8 billion, with earnings per diluted share projected between $4.30 and $4.50 [40][41] - Management emphasized the importance of maintaining a durable balance sheet and ample liquidity while navigating uncertainties [38][41] Other Important Information - Skechers repurchased approximately 5.2 million shares at a cost of about $330 million during the year [38] - The company ended the year with 5,296 Skechers stores worldwide, including 1,787 company-owned locations [21] Q&A Session Summary Question: Guidance on gross margin for fiscal 2025 - Management indicated that they do not anticipate a material change in gross margin overall, expecting stability with some fluctuations [50][56] Question: US wholesale growth expectations - Management expects to gravitate back to mid-single-digit growth for the wholesale channel, acknowledging the challenges of duplicating last year's nearly 20% growth [65][68] Question: Impact of foreign exchange on EPS - Management noted that foreign exchange impacts are significant, estimating a hit of between 15 and 20 cents on EPS due to the strengthening of the US dollar [70][72] Question: International revenue deceleration - Management clarified that the decline in international revenue was primarily due to challenges in China, while other markets showed robust growth [78][80] Question: Mitigation strategies for tariffs - Management plans to redirect manufacturing relationships, engage with vendors, and consider pricing adjustments to mitigate tariff impacts [90][91]

Core Insights - Skechers reported revenue of $2.21 billion for the quarter ended December 2024, reflecting a year-over-year increase of 12.8% [1] - The earnings per share (EPS) was $0.65, up from $0.56 in the same quarter last year, but fell short of the consensus estimate of $0.74, resulting in an EPS surprise of -12.16% [1] Revenue Performance - Revenue from the Asia Pacific region was $642.40 million, a 3.3% increase year-over-year, but below the average estimate of $671.99 million [4] - Revenue from Europe, Middle East & Africa reached $478.60 million, marking a significant 24.8% year-over-year increase, though it was slightly below the estimate of $490.49 million [4] - The Americas generated $1.09 billion in revenue, exceeding the estimated $1.06 billion, with a year-over-year growth of 14.2% [4] Sales Breakdown - Total wholesale sales amounted to $1.13 billion, surpassing the average estimate of $1.12 billion, and reflecting a 17.5% increase year-over-year [4] - Direct-to-consumer sales totaled $1.08 billion, slightly below the estimate of $1.09 billion, with an 8.4% year-over-year increase [4] - International direct-to-consumer sales were $669.80 million, under the estimate of $701.78 million, showing a 9.3% year-over-year growth [4] - International wholesale sales reached $701 million, below the estimated $730.37 million, with a year-over-year increase of 10.4% [4] - Domestic wholesale sales were $429.70 million, exceeding the estimate of $388.09 million, representing a robust 31.2% year-over-year growth [4] - Domestic direct-to-consumer sales were $411.90 million, slightly above the estimate of $402.75 million, with a year-over-year increase of 6.9% [4] Stock Performance - Skechers shares have returned +7.4% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]