Zacks Investment Research Lowers Skechers USA (SKX) to Sell

Zacks Investment Research downgraded shares of Skechers USA (NYSE:SKX) from a hold rating to a sell rating in a report issued on Tuesday.

According to Zacks, “Shares of Skechers have slid and underperformed the industry in the past six months. This may be attributed to the year-over-year earnings per share decline and top-line miss during third-quarter 2018. Also, sluggish domestic wholesale business performance hurt investor sentiment. Moreover, higher general & administrative expenses remain a concern. Nevertheless, Skechers’ is emphasizing on new line of products, cost containment efforts, inventory management and global distribution platform. Skechers’ posted double-digit increase in both international wholesale and global company-owned retail businesses. The company delivered earnings beat in the third quarter which encouraged management to provide an upbeat view for the final quarter. Management now expects both the top and bottom lines to increase year over year during the final quarter. Further, Skechers’ domestic e-commerce business continues to gain traction.”

A number of other analysts also recently issued reports on SKX. Cowen downgraded Skechers USA from an outperform rating to a market perform rating and decreased their target price for the stock from $32.00 to $28.00 in a research report on Thursday, September 20th. Citigroup decreased their target price on Skechers USA from $30.00 to $29.00 and set a neutral rating for the company in a research report on Monday, October 22nd. Wells Fargo & Co set a $30.00 target price on Skechers USA and gave the stock a hold rating in a research report on Friday, October 19th. Buckingham Research decreased their target price on Skechers USA from $35.00 to $30.00 and set a buy rating for the company in a research report on Wednesday, October 17th. Finally, Stifel Nicolaus started coverage on Skechers USA in a research report on Monday, December 17th. They issued a buy rating and a $32.00 target price for the company. Three research analysts have rated the stock with a sell rating, eight have issued a hold rating and six have issued a buy rating to the stock. The company has an average rating of Hold and a consensus target price of $31.62.

Shares of SKX traded up $0.63 on Tuesday, reaching $25.53. 83,205 shares of the company’s stock traded hands, compared to its average volume of 2,127,238. The company has a current ratio of 3.43, a quick ratio of 2.29 and a debt-to-equity ratio of 0.03. The company has a market capitalization of $3.94 billion, a price-to-earnings ratio of 14.32, a PEG ratio of 1.83 and a beta of 0.56. Skechers USA has a 52-week low of $21.45 and a 52-week high of $43.08.

Skechers USA (NYSE:SKX) last issued its quarterly earnings results on Thursday, October 18th. The textile maker reported $0.58 EPS for the quarter, beating the Zacks’ consensus estimate of $0.51 by $0.07. The company had revenue of $1.18 billion during the quarter, compared to the consensus estimate of $1.22 billion. Skechers USA had a return on equity of 13.81% and a net margin of 4.13%. Skechers USA’s revenue was up 7.5% on a year-over-year basis. During the same period last year, the business posted $0.59 earnings per share. As a group, equities research analysts predict that Skechers USA will post 1.85 earnings per share for the current year.

In other news, President Michael Greenberg sold 75,630 shares of Skechers USA stock in a transaction on Friday, November 2nd. The stock was sold at an average price of $29.28, for a total value of $2,214,446.40. Following the completion of the transaction, the president now directly owns 593,309 shares in the company, valued at $17,372,087.52. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. 27.88% of the stock is currently owned by insiders.

Several hedge funds and other institutional investors have recently made changes to their positions in SKX. US Bancorp DE grew its position in shares of Skechers USA by 169.5% in the second quarter. US Bancorp DE now owns 4,069 shares of the textile maker’s stock valued at $122,000 after purchasing an additional 2,559 shares in the last quarter. First Mercantile Trust Co. bought a new stake in Skechers USA during the third quarter valued at $139,000. NuWave Investment Management LLC boosted its stake in Skechers USA by 92.2% during the third quarter. NuWave Investment Management LLC now owns 5,011 shares of the textile maker’s stock valued at $140,000 after buying an additional 2,404 shares during the period. NumerixS Investment Technologies Inc bought a new stake in Skechers USA during the second quarter valued at $141,000. Finally, Strs Ohio bought a new stake in Skechers USA during the second quarter valued at $184,000. Institutional investors own 74.26% of the company’s stock.

About Skechers USA

Skechers U.SA, Inc designs, develops, markets, and distributes footwear for men, women, and children; and performance footwear for men and women under the Skechers GO brand worldwide. It operates through three segments: Domestic Wholesale Sales, International Wholesale Sales, and Retail Sales. The company offers casual boots, shoes, and sandals for men; shoes, oxfords and slip-ons, lug outsole and fashion boots, and casual sandals for women; dress casuals, seasonal sandals and boots, classic and wide fit, and relaxed fit casuals for men and women; and casual athletic line for men and women under the Skechers USA brand.

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