Back in early May, when Rex Moore recommended shares of shoemaker K-Swiss
Third-quarter sales rose 12% to $136 million, helped in large part by a nearly 56% rise in international business. (International sales made up about a fifth of K-Swiss' top line.) Expanded gross and operating margins, meanwhile, helped drive a big pop in net income. Net profit jumped 37% to $21 million, while earnings per share (EPS) raced ahead even more quickly as the company bought back nearly half a million shares during the quarter.
All told, things look pretty darn good at K-Swiss these days. The balance sheet is strong, with inventories actually down year over year. According to management, the company was able to clear out excess stock without sacrificing margins -- a good indicator of strong demand for its products. K-Swiss, it appears, is competing well with the likes of Nike
Now management is directing investors to expect full-year sales of between $473 million and $477 million and EPS of between $1.69 and $1.73. The market is currently asking about 15 times the low-end earnings estimate for a share of K-Swiss stock -- much more than the shares commanded back in May -- but the company appears to be on significantly better footing now than it was then.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.