It's been a tough week for some corporate earnings, but it appears that there were two winners in the world of footwear fashion. Both Deckers Outdoor (Nasdaq: DECK) and Skechers (NYSE: SKX) performed much better in their recently reported quarters than investors thought they would. That's probably a relief for their shareholders, after seeing Crocs' (Nasdaq: CROX) continued pain last week.

Nothing ugly about Uggs
Deckers continues to be an impressive success story. It beat Wall Street's expectations with a first-quarter net income increase of 19.5% to $11.3 million, or $0.86 per share. Revenue surged 34.4% to $97.5 million. Last quarter, some Deckers shareholders investors got seriously cold feet when the company reduced its first-quarter guidance to $0.75 per share from its previous guidance of $0.92.

The big shocker was that Deckers' Uggs brand continues to excel, with sales growing 83.6% to $54.8 million. Uggs sheepskin boots have been wildly trendy, but it's also been fair to wonder whether they were a fad -- that concern has hit Crocs and Heelys (Nasdaq: HLYS) -- and if so, how long the fad might last. So far, though, Uggs still have legs.

Sales for the Teva line weren't nearly as heartening -- they decreased by 2.6% to $37.7 million. Deckers' eco-friendly Simple brand shoes put a better foot forward, with sales increasing 25.2%, but bear in mind that Simple makes up a tiny fraction of the company's overall sales -- just $5.1 million in the quarter.

Last but not least, Deckers increased its 2008 guidance -- it now sees a 31% increase in revenue, versus the previous expectation for a 25% bump, and a 27% increase in earnings per share, versus the earlier forecast for a 20% jump. The company also said it expects earnings per share to increase by 30% in the second quarter and for revenues to surge by 50%.

Less sketched out about Skechers?
Skechers also delivered a pleasant surprise to investors by beating Wall Street's expectations. The company's first-quarter net income increased 37.4% to $32.8 million, or $0.70 per share, and revenue gained 11.6% to hit $384.9 million. As has been the case for a while, Skechers' international exposure has helped bolster its results.

The company's earnings far exceeded its previous first-quarter guidance for a range of $0.57 to $0.62 per share. Skechers said it now expects second-quarter revenue to come in at $350 million to $365 million and earnings of $0.30 to $0.38 per share.

Skechers, in line with what many other companies have revealed in recent months, has some cash in auction-rate securities, and the market for those has frozen. The company said that although it's cautiously optimistic that liquidity will return, it has shifted classification of those securities to long-term assets.

A perfect fit?
 Steve Madden (Nasdaq: SHOO) and Timberland (NYSE: TBL) are two examples of shoe companies that have stumbled lately, and it hasn't been a cakewalk for shoe retailer DSW (NYSE: DSW), either. But Deckers and Skechers both strike me as sound stock ideas in an often challenging consumer-goods niche. Back in February, I outlined Skechers as Stock of the Week; I'd say it still looks reasonable trading for less than 10 times forward earnings and with a PEG ratio of 0.63.

Deckers makes me a wee bit more nervous, given its status as a longtime hot stock and the continued concerns over whether Uggs can become a permanent fashion fixture for shoppers. However, Deckers has an impressive growth history, and assuming it can keep up the performance trend, it doesn't look unreasonable trading at 19 times forward earnings, compared with past valuations. Its PEG ratio also looks tantalizing at 0.75.  

Both companies do face a challenging macroeconomic environment, and that's no small risk -- for the short term, anyway. The U.S. consumer is pinched, and new shoes may be one of the first luxuries to come off the personal budget. Today's ratios could go out the window, too, if the companies' outlooks change dramatically.

Even so, both companies' better-than-expected quarters may give potential investors more good reason to contemplate taking a walk in these shoes, especially if they're strolling toward a long-term horizon.

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