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]

Financial Performance - Skechers reported quarterly earnings of $0.65 per share, missing the Zacks Consensus Estimate of $0.74 per share, but showing an increase from $0.56 per share a year ago, representing an earnings surprise of -12.16% [1] - The company posted revenues of $2.21 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.05%, and up from $1.96 billion year-over-year [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.52 on revenues of $2.47 billion, and for the current fiscal year, it is $4.79 on revenues of $9.82 billion [7] - The estimate revisions trend for Skechers is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Market Performance - Skechers shares have increased approximately 10.7% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The Shoes and Retail Apparel industry, to which Skechers belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Skechers demonstrated strong earnings growth in the fourth quarter of 2024 despite falling just shy of estimates.Skechers U.S.A. (SKX 1.63%), a global leader in footwear, presented its fourth quarter 2024 earnings on February 6, 2025, showcasing a robust performance. Despite a minor shortfall in revenue against estimates, the company reported significant earnings growth. It achieved earnings per share of $0.65 but missed the $0.75 analyst consensus. Revenues reached $2.212 billion, slightly under the $2.220 ...