Please ensure Javascript is enabled for purposes of website accessibility

Fourth-Quarter Earnings Propel Skechers Shares Nearly 19% Higher Friday Morning

By Daniel Miller – Updated Apr 14, 2019 at 9:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

International growth helped the footwear company surpass earnings expectations.

What happened

Shares of Skechers (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.

So what

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. 

man and woman looking at tennis shoe in a retail store.

Image source: Getty Images.

"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.

Check out the latest earnings call transcript for Skechers.

Now what

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.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Skechers. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Skechers Stock Quote
Skechers
SKX
$40.10 (%)

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.