What happened
Shares of Skechers (SKX -0.56%) climbed 88.7% in 2019, according to data from S&P Global Market Intelligence, easily outpacing the S&P 500's 29% gain as the casual footwear specialist managed to successfully weather macroeconomic challenges and tariff concerns.
So what
It certainly helped that Skechers stock had entered last year having plunged nearly 40% in 2018, including a 15% drop in December 2018 alone amid concerns over the effect slowing global economic growth might have on consumer discretionary names.
But Skechers' gain last year wasn't exactly a straight line up. After rallying nearly 50% from January through the end of March, shares pulled back almost 20% through the end of May as the company grappled with what CFO John Vandemore described as "challenging conditions" that left first-quarter revenue up a weaker-than-expected 2.1%.
Image source: Skechers.
However, Skechers began to rebound in a big way over the next few months. Revenue growth accelerated to 10.9% in the second quarter, to a company-record $1.259 billion, as 19.8% international sales growth helped prop up a 1.5% gain from domestic stores.
In the company's earnings press release, CEO Robert Greenberg noted that at the time they were "continuing to strategically view our business with a global lens as trends are traveling faster," elaborating that many key product styles are now "introduced at virtually the same time around the world."
Now what
More recently, when Skechers released third-quarter results in October, investors celebrated yet another top-line growth acceleration to 15%, including 21.9% international growth and a much more respectable 6.7% domestic gain.
This time, Greenberg boasted that his company was "firing on all cylinders," adding: "Our global marketing efforts are creating awareness and generating demand."
And that momentum should continue. When Skechers releases its fourth-quarter 2019 results early next month, the market will be looking for the company to live up to guidance for sales in the range of $1.225 billion to $1.25 billion, or growth of roughly 13% to 15.3%, with adjusted earnings of $0.35 to $0.40 per share (up 13% to 29% year over year). If Skechers can manage to extend its habit of exceeding that outlook with global momentum on its side, I won't be the least bit surprised if shares have further to rise from here.
