After a catastrophic end to 2018 that sent shares tumbling 40% that year, Skechers (NYSE:SKX) rallied 85% in 2019. The value-oriented shoemaker has overcome trade wars, disgruntled rumblings from investors over inconsistent expense growth, and amusing ongoing disputes with its larger peers like Nike (NYSE:NKE).

In spite of all the volatility, though, Skechers remains my favorite shoe investment as emerging markets continue to power American consumer goods brands -- particularly the U.S. sneaker industry. Skechers stock is simply a great value for the growth it is generating for shareholders, and though bumps in the road are inevitable, it's a great buy-the-dip candidate.

Three young people running across a bridge.

Image source: Getty Images.

Expect more lumpy expense growth

The U.S.-China trade war was a pain point for investors the last couple of years, especially Skechers shareholders, as the company manufactures much of its footwear in the world's most populous country. The resulting question marks over Skechers' supply chain, possible tariffs on cross-border product movement, and disruption to the global economy were among reasons the stock has been so volatile.

However, even more than the trade war, Skechers' lumpy expense outlay caused some serious fits and tantrums. The scrappy shoe company continues to aggressively expand internationally, especially in emerging economies around the globe. In today's retail environment, opening new retail stores is only part of the equation; companies also must invest in distribution centers as well as in the ability to sell directly to consumers via a digital store. Because Skechers is a small outfit (current market cap is only $6.7 billion), that spending to support growth has caused plenty of volatility in earnings the last few years.

SKX Total Operating Expenses (Quarterly) Chart

Data by YCharts.

In Q3 2019, though, some signs of serious payoff began to appear. Earnings per share grew 16% year over year on the back of a 22% surge in international sales. Management also forecast a 13% to 29% increase in earnings for Q4. While that kind of double-digit growth is more in line with what investors have been looking for, that's quite the variable range of outcomes.

The fact is, investors should expect earnings to remain volatile. Skechers is still expanding worldwide by opening new stores, supporting new retail distributors, and investing in digital selling capabilities. The company also recently broke ground on its headquarters expansion project. That could cause more fits for the stock in the year ahead if investors grow impatient with bottom-line performance.

Stay focused on the top line

Nevertheless, it's important to remember that Skechers is a growth company, and international markets are where it's at. Thus, it's the top line that's of primary importance here. Q3 2019 international sales accelerated to a 22% pace and accounted for 59% of Skechers' total revenue. With overseas markets well on their way to accounting for two-thirds of the shoemaker's results, double-digit growth in that department is sure to have a positive impact in the years ahead.

Full-disclosure: I did lock in some of my profits on the stock at the end of the year. However, my plan is to use any inevitable pullback in the stock to add to my remaining position. Another tumble in share prices is certainly in the cards given that the first quarter is usually a sleepy one for Skechers, so any underwhelming guidance could create a pullback, as it has in years past.

Shares remain a value, though, especially when looking at Skechers' peers. Shares trade for just 14.8 times one year forward expected earnings -- compared with 29.1 for Nike and 33.4 for Under Armour (NYSE:UAA) (NYSE:UA). For the sake of comparison, Nike's international growth was up 14% and Under Armour's just 5% in the last comparable period.

Thus, Skechers stock remains a buy in my book for 2020. I fully expect the ups and downs to continue but plan on using the pullbacks to build up my position again. The stock is just too cheap, and its success outside the U.S. is just too strong to ignore.