Shares of Skechers (NYSE:SKX), a maker of lifestyle an athletic footwear and apparel, are trading 16% higher as of 11 a.m. EST Friday after the company reported solid fourth-quarter results thanks to strong international sales.
Skechers posted record fourth-quarter sales of $1.08 billion, an 11.4% increase over the prior-year period but just below analysts' estimates calling for $1.1 billion. The bottom-line result, however, was enough to please investors. Skechers' earnings per share checked in at $0.31, well above the prior year's $0.43-per-share loss and better than analysts' estimates calling for earnings of $0.23 per share.
"2018 was a year of record sales -- our first fourth quarter of over a billion dollars and, combined with three previous record quarters, a new annual sales record of $4.64 billion," stated David Weinberg, chief operating officer of Skechers, in a press release. Further, international wholesale sales increased 18.4% and company-owned global retail sales increased 7.5%. The icing on the cake for investors was management's first-quarter guidance for earnings between $0.70 and $0.75 per share, which exceeded analysts' expectations of $0.63 per share.
Skechers' international business is still at the core of its growth story. That's the driving force behind management decision to transition its India joint venture to a wholly owned subsidiary and its agreement to establish a joint venture in Mexico. Those two moves are expected to be accretive to earnings in 2019. Skechers is also focused on expanding its global e-commerce business by improving the functionality of its websites in the U.S. and China, as well as launching a platform in India. If Skechers can focus on international sales to boost its top line and continue to expand its e-commerce business, 2019 has the potential to be a strong year for investors.