SKX drop…

"Skechers USA Inc. (SKX) dropped the most in almost two years in New York trading after analysts said the shoemaker’s sales are declining as the back-to-school shopping season wraps up.

The shares slumped 9.8 percent to $52.40 at the close, the biggest one-day decline since October 2012. The Manhattan Beach, California-based company had gained 75 percent this year through yesterday amid booming sales and efforts to control costs.

Sales fell about 3 percent in the week ended Sept. 20, led by a slowdown in Skechers’ offerings for children, Sam Poser, an analyst at Sterne Agee & Leach Inc., wrote today in a note that cited SportScanInfo data.

“Once again it was the kids’ business that led to the overall sales decline,” Poser wrote. Sales of Skechers’ children’s shoes, which account for 8 percent of its revenue, dropped 42 percent last week, he said.

Poser maintained his buy rating on the stock, saying Skechers remains “quite healthy,” with average selling prices on its products rising 19 percent at mid-tier department stores."


Here’s the news I got off Schwab:

Sterne Agee analyst Sam Poser is out telling clients to buy Skechers USA on today’s weakness on SportscanInfo info.
Poser commented, “According to SportscanInfo (SSI), Skechers sales declined 3% (+25% on a 2-year stacked basis) last week versus +19% for the past 4 weeks. ASPs in the last week continue to be strong, up 16%. The week ending 9/20 is the smallest volume week for SKX of the last 4 weeks. Feedback from retailers continue to be strong, with most planning the business up double digits. Business is quite healthy as ASPs in the mid-tier department store channel were up 19%.

Poser said business is healthy as evidenced by high teens ASP increase: The deceleration in the last week was largely relegated to the mid-tier department store channel, where SKX sales declined 20.5% in the last week versus +10.4% for the last 4 weeks. We do not believe there is a brand/product issue here, as shown by the 19% ASP increase within the channel. If there was a product/brand issue, department stores would be promoting the product in a very aggressive fashion. We believe that retailers likely ran out of inventory after the strong start of back to school."

For what it’s worth, I added to my position.



By the way, this just shows how idiotic the market can be. The reports on Skechers were that their sales were up as much as 45% year-over-year over the summer, and then, on the basis of one report of one single week, they sell off 10%! Do the sellers think that all of a sudden people have massively changed their minds about the product? Or what? Did no one think that with all those huge sales, maybe some stores ran low on inventory? That maybe the summer back-to-school product sales were more than even the company planned for?



What about a week ago when Skechers dropped on very heavy volume by ~8% on Sep 17, again due to “lower sales number”?

Does that give any pause for concern?


I know next to nothing about the shoe market, but wouldn’t going back to school be like Christmas, a time of unusually good sales?
IOW isn’t this normal?