Sketchers Q1 2016 Results

err Guys - are you all taking the day off or something?
Sketchers just announced a beat (buy a mile on earnings). Sales up 27% and 978m, profits at 97.6m, EPS at .63c (diluted) up 72%. International (growing at 47%) has now overtaken domestic business.…
Conference call taking place now.

  • apologies for the auto spell correct, that should be skechers without a “t”.
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Saw that and got quite excited, but this tempered my enthusiasm slightly:

Mr. Weinberg added: “Last year’s second quarter was extremely strong as shipments were pushed from the first quarter into the second quarter of 2015, while this year shipments were pulled from the second quarter into the first quarter. We believe this was in part due to our European business strengthening and China increasing its wholesale distribution strategy through a franchise store model, both of which concentrated volume into the first quarter."

So, an incredible quarter, but Q2 won’t be as amazing, apparently. Estimated midpoint was 914M. They’re guiding to 888M:

We currently believe second quarter 2016 net sales will be between $875 million and $900 million; this guidance assumes no significant shift or pull forward of orders from the third quarter into the second quarter. Our first and third quarter net sales have the potential to become larger relative to the net sales balance of the other quarters as our international business becomes a greater percentage of our total net sales. We therefore believe there could be upside opportunity for the third quarter of 2016 and the balance of the year.”


With all the Q to Q jockeying of sales mentioned, it seems like YOY or TTM would be a good way to look at their comparables.

Although I know the market will only be fixated on the short term (good or bad for the company).

Yep looking forward to reading the transcript. The guidance didn’t sound great.

Just a hell of a Q1 though.

9.8 percent comp store sales increase over the prior year period


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There’s a lot to like here. Of course, we already knew Q2 was not going to be as good. Whether Wall Street decides to remember this or not, we will have to see:

Net Sales (millions)	        Q1		Q2		Q3		Q4			
2013								515.8		450.7		
2014				546.5		587.1		674.3		569.7	
2015				768.0		800.5		856.2		722.7	
2016				978.8

EPS (diluted)			Q1		Q2		Q3		Q4			
2013								0.18		0.09	
2014				0.20		0.23		0.33		0.14		
2015				0.37		0.52		0.43*		0.19	
2016				0.63

*SKX 3-for-1 stock split 10/15/15, but all EPS figures are split-adjusted

Current (2016 Q1 Earnings):

Revenue Growth (millions)
2015 Q1 TTM Revenue = 2599.1
2016 Q1 TTM Revenue = 3358.2
Year Over Year Revenue Growth = 29.2%, previous quarter rev growth 32.4%

EPS Growth (diluted)
2015 Q1 TTM Earnings = 1.07
2016 Q1 TTM Earnings = 1.77
Year Over Year EPS Growth = 65.4%, previous quarter EPS growth 66.7%

P/E (Check Current Price) = 30.82/1.77 = 17.41

1YPEG = 17.41/65.4 = 0.266

Long SKX
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As I wrote just the day before in my review:

This company is doing wonderfully, with no obvious threat in sight. It sold off for no particular good reason, except that the price had risen a lot this year. I’m comfortable with it as one of my big three largest, and oversized, positions… This is a great company, and selling at a very low price when compared to other companies in the same field.