Skechers USA Earnings Preview

Investors never know what to expect for Skechers USA (NYSE: SKX  ) , as it has wavered between topping and missing analysts' estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Oct. 26. Skechers designs, develops, markets and distributes footwear. It also operates retail stores and an e-commerce business.

What analysts say:

• Buy, sell, or hold?: Analysts are bullish on Skechers, as two analysts rate it as a buy and only one analyst rates it as a sell. Analysts don't like Skechers as much as competitor Brown Shoe Company overall.
• Revenue forecasts: On average, analysts predict $464.7 million in revenue this quarter. That would represent a decline of 16.2% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.01 per share. Estimates range from a loss of $0.14 to a profit of $0.12.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97% granting it an outperform rating. The community at large agrees with the All-Stars, with 94.9% awarding it a rating of outperform. Fools are gung-ho about Skechers and haven't been shy with their opinions lately, logging 230 posts in the past 30 days. Skechers has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Revenue has fallen in the past two quarters. The company's gross margin shrank by 14 percentage points in the last quarter. Revenue fell 13.8% while cost of sales rose 8.9% to $291 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q2	Q1	Q4	Q3
Gross Margin	33.2%	40.6%	40.7%	45.7%
Operating Margin	(11.1%)	3.1%	0.3%	10%
Net Margin	(6.9%)	2.5%	0.7%	6.5%

For all our Skechers-specific analysis, including earnings and beyond, add Skechers USA to My Watchlist.

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