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Why Skechers Stock Gained 16% in April

By Demitri Kalogeropoulos - May 6, 2021 at 9:17AM

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Sales growth trends are looking up.

What happened

Skechers (SKX -0.47%) shareholders beat a booming rally last month. The stock gained 16% in April compared with a 5.2% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.

The boost added to a significant rally for the footwear giant, which is up over 70% in the past year.

A person shops for new shoes.

Image source: Getty Images.

So what

Investors cheered Skechers' latest earnings release on April 22 showing improving demand trends. Sales rose 15% through late March despite continued pandemic pressures in some markets, management revealed.

"The momentum we experienced in the second half of 2020," COO David Weinberg told investors, "continued into the first quarter." Skechers also noted a sharp jump in profitability thanks to rising average prices.

Now what

CEO Robert Greenberg and his team are calling for sales to land between $5.8 billion and $5.9 billion this fiscal year, with roughly $1.5 billion of that haul coming in the current quarter. That Q2 result would mark an over 100% increase compared with a year earlier, when lockdowns and social distancing efforts spurred a 42% slump.

The scale of that growth rebound helps explain why investors remain optimistic about this business while consumer spending remains healthy.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Skechers. The Motley Fool has a disclosure policy.

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Skechers U.S.A., Inc. Stock Quote
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