Shares of casual-shoe brand Skechers USA (NYSE:SKX) were surging today after the company posted blowout numbers in its third-quarter earnings report. As of 11:02 a.m. EDT, the stock was up 37.3%.
The global sneaker chain reported a new quarterly sales record as revenue increased 16.2% to $1.095 billion, ahead of estimates of $1.07 billion. Meanwhile, gross margin improved 190 basis points to 47.5%, driving earnings per share up from $0.42 to $0.59. That easily beat expectations of $0.43.
Performance was solid across the company's three divisions: global retail, international wholesale, and domestic wholesale. Retail was the strongest, with sales up 18.6% on a 4.4% increase in comparable sales. Domestic comps were also promising, increasing 3.1% in a difficult retail environment and as the company dealt with damage from hurricanes Harvey, Irma, and Maria. International wholesale revenue jumped 25.7% and domestic wholesale ticked up 1.4%.
CFO David Weinberg said that "continued strength in China, the resurgence of the United Kingdom, and growth all across Europe" fueled sales growth.
With this report, Skechers seems to be finally moving past the doldrums that plagued the stock following a dramatic spike in 2015 that quickly unraveled. Revenue growth was at nearly its fastest pace in over a year, and earnings growth has turned positive again as shares hit a 52-week high on the news. Management called for revenue of $860 million-$885 million and EPS of $0.09-$0.14 in the fourth quarter, both in range of estimates. With the company having digested previous bottom-line headwinds like advertising costs and lower prices, the stock could be ready to rip higher from here. Analysts expect EPS to jump 26% next year to $1.97, giving the stock a P/E of just 16 based on that forecast. That projection is likely to rise after today's report.