Skechers Earnings Preview

Investors braced for a bumpy ride ahead of Skechers' (NYSE: SKX  ) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Feb. 15. 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 think investors should stand pat on Skechers, with analysts unanimously rating it hold. Analysts don't like Skechers as much as competitor Brown Shoe Company overall. Two out of five analysts rate Brown Shoe Company a buy compared to zero out of five for Skechers. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $324.3 million in revenue this quarter. That would represent a decline of 28.7% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is a loss of $0.23 per share. Estimates range from a loss of $0.30 to a loss of $0.08.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 96% awarding it an outperform rating. The greater community concurs with the All-Stars, as 94.4% give it a rating of outperform. Fools are impressed with Skechers and haven't been shy with their opinions lately, logging 236 posts in the past 30 days. Even with a robust four out of five stars, Skechers' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 3 percentage points in the last quarter. Revenue fell 25.7% while cost of sales fell 21.5% to $237 million from a year earlier.

Now, a look at how efficient management has been at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. Skechers has seen decreasing gross margins year over year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. See how Skechers has been doing for the last four quarters:

Quarter	Q3	Q2	Q1	Q4
Gross Margin	42.7%	33.2%	40.6%	40.7%
Operating Margin	0.6%	(11.1%)	3.1%	0.3%
Net Margin	2%	(6.9%)	2.5%	0.7%

One final thing: If you want to keep tabs on Skechers' movements, and for more analysis on the company, make sure you add it to your Watchlist.

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Earnings estimates provided by Zacks.