Why Skechers' Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of shoe specialist Skechers (NYSE: SKX  ) ran up today, gaining as much as 12% before closing with a 4% gain.

So what: We can't really say that Skechers' results for the second quarter look good but, hey, when a company is struggling, investors need to take what they can get. For the quarter, sales slipped 11% from last year to $384 million, while the company lost $0.04 per share. While that may sound like a lousy quarter, the per-share loss was much smaller than the $0.62 loss last year, and also better than the $0.07 per share loss that analysts had expected. Revenue, likewise, topped Wall Street's views, as the average analyst estimate called for just $373 million in sales.

Now what: What do you do when you fall off a horse? If you're Skechers, you dust yourself off, and hop right back on. The company took a significant lump when its toner shoes -- like the Shape-Ups pushed by Kim Kardashian -- ended up costing the company a bunch of money and generally made it look silly. It's quickly putting that experience in its past, though, and is trying to grab new hot-at-the-moment slices of the market. Notably, it introduced the performance GOrun line -- low-profile, minimalist running shoes that have received good reviews and were a bright spot in the second quarter.

Of course, while the Shape-Ups may not be the centerpiece of Skechers anymore, shaping up its financial results still has a ways to go.

Want to keep up to date on Skechers? Add it to your watchlist.

Motley Fool newsletter services have recommended buying shares of Skechers. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.


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