The trade spat between the U.S. and China has left consumer goods investors leery, but in spite of the uncertainty surrounding the dispute, Skechers' (NYSE:SKX) sales keep trudging higher. It happened again in the third quarter of 2019, with the quirky shoemaker shrugging off a sluggish global economy and handily topping its own sales estimates.

It isn't the primo brand that Nike embodies, and in fact, the two companies are at odds with each other again over shoe designs; but that might be a good thing for Skechers as it continues to cater to the comfort- and budget-conscious shoe buyer here and abroad.

A shot from the ground up of three young people running across a bridge.

Image source: Getty Images.

International and domestic sales sizzle

Skechers was on fire in the third quarter, typically one of its busier times of year thanks to the back-to-school shopping season. Results were especially good this year, though, putting a sluggish start to 2019 far in the rearview mirror. Total sales in the third quarter grew 15% -- well ahead of its own projections given a few months prior. Same-store sales for Skechers' retail stores and e-commerce increased 6.8% in the U.S. and 9.9% internationally.

Added to the first half of the year, Skechers is putting together a solid performance with higher revenues and even higher profits.

Metric

Nine Months Ended Sept. 30, 2019

Nine Months Ended Sept. 30, 2018

Change

Revenue

$3.89 billion

$3.56 billion

9.2%

Gross profit margin

47.7%

48.0%

(30 bps)

Operating expenses

$1.45 billion

$1.37 billion

5.6%

Adjusted earnings per share

$1.86

$1.62

14.8%

Bps = basis points. Data source: Skechers.

Total international sales were especially robust, accelerating to a 21.9% year-over-year growth rate (or 25.7% growth when excluding negative impact from foreign currency exchange rates due to a stubbornly strong U.S. dollar). Though now representing 59% of sales, management still thinks overseas markets are the best areas for growth. Emerging markets in China, India, Mexico, and Turkey were called out as performing especially well during the late summer months. Did someone say something about a trade war and sluggish global economy?

Period

International YOY Growth

Q3 2019

21.9%

Q2 2019

19.8%

Q1 2019

9.3%

Full-Year 2018

19.2%

YOY = year over year. Data source: Skechers.

More of the same ahead

Skechers management said it sees its momentum continuing in the fourth quarter and into 2020. Fourth-quarter sales are forecast to fall between $1.225 to $1.250 billion, up 13% year over year at the low end. The $0.35 to $0.40 range for earnings per share would imply a 13% to 29% increase over the same period a year ago. The low end of the earnings outlook was perhaps the lone imperfection for this report card.

It's clear that Skechers' investments in its global selling capabilities are starting to pay off. The shoemaker's marketing efforts are winning over lots of new customers, especially in international markets. Though this is a growth company, it still isn't valued as one. Trailing-12-month price to free cash flow (money left over after operating and capital expenditures are paid) is at 16.3, and one-year forward price to earnings is 14.4. The S&P 500's one-year forward price to earnings is far higher at 18.2, even though earnings are expected to grow much slower than Skechers' pace.

Whether Skechers' shoes are your thing or not, its stock is certainly worth a look right now.