Skechers Stock Pops. Sales Are Growing Even as Consumers Feel Pinched. -- Barrons.com

Dow Jones04-26

By Angela Palumbo

Skechers USA stock was climbing Friday after the sneaker maker raised its full-year financial guidance and posted strong first-quarter financial results.

Shares of Skechers were up 14% Friday, which would be their largest percentage increase since April 23, 2021, according to Dow Jones Market Data. The stock was also on pace to hit a record closing high as shares hit $67.31. Skechers stock has now gained 8% this year.

Late Thursday, the shoe company reported first-quarter adjusted earnings of $1.37 a share on revenue of $2.25 billion. Analysts surveyed by FactSet were expecting adjusted earnings of $1.10 a share on revenue of $2.2 billion.

Skechers also said it now expects 2024 revenue to be between $8.73 billion and $8.88 billion, which is above the company's previous guidance of $8.6 billion to $8.8 billion. Analysts were expecting full-year revenue of $8.79 billion.

"1Q results show remarkable broad-based strength in lousy macro," Raymond James analyst Rick Patel wrote in a research note Friday. Skechers' sales growth comes as consumers continue to feel pinched by high inflation and interest rates.

Patel raised his price target on the stock to $72 from $66 and maintained an Outperform rating. "We're impressed with SKX's positive momentum which reflects high demand across brand and product," he wrote.

Patel isn't the only analyst with confidence in the company's growth opportunities. Wedbush analyst Tom Nikic increased his price target on the stock to $76 from $68 and maintained an Outperform rating.

"Amid a very tough macro environment, SKX continues to exhibit impressive momentum, with a surprisingly strong beat-and-raise Q1," Nikic wrote in a note. "We believe the brand continues to benefit to from a compelling combination of product innovation, strong marketing, global distribution, and internal execution."

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 26, 2024 10:01 ET (14:01 GMT)

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Skechers Stock Pops. Sales Are Growing Even as Consumers Feel Pinched. -- Barrons.com

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