1dms & Cochrane,
Thanks for posting the highlights. Here are the numbers in context (with prior numbers).
Revenues increased about 27% QoQ, which is about the same attainment as last quarter. Skechers is celebrating hitting the $3 billion mark. They almost doubled sales since 2011. Pretty nice performance.
Sales growth, however, is slowing down quite a bit. If they hit $900 million (midpoint of their stated comfort zone), sales growth will have been less than 20%, which hasn’t happened since December, 2013. They did, however, announce 30% growth in January and good performance so far in February. Let’s see how the rest of the quarter plays out.
Rev Mar Jun Sep Dec Tot
2011 476.2 434.4 412.2 283.2 1,606
2012 351.3 384.0 429.4 395.6 1,560
2013 451.6 428.2 515.8 450.7 1,846
2014 546.5 587.1 674.2 569.7 2,377
2015 768.0 800.5 856.7 722.7 3,148
2016 **900.0**
RevQoQ Mar Jun Sep Dec Tot
2011
2012 -26% -12% 4% 40% -3%
2013 29% 12% 20% 14% 18%
2014 21% 37% 31% 26% 29%
2015 41% 36% 27% 27% 32%
2016 **17%**
If they hit the earnings midpoint of the range they gave in their press release, earnings growth will will have been about 43%.
EPS Mar Jun Sep Dec Tot
2011 0.08 -0.21 0.06 -0.39 -0.46
2012 -0.02 -0.01 0.07 0.03 0.06
2013 0.04 0.05 0.18 0.09 0.36
2014 0.20 0.23 0.33 0.14 0.91
2015 0.37 0.52 0.43 0.19 1.50
2016 **0.53**
EPSQoQ Mar Jun Sep Dec Tot
2011
2012 -129% -94% 29% -107% -114%
2013 -286% -450% 141% 250% 468%
2014 369% 386% 89% 54% 152%
2015 80% 128% 29% 33% 66%
2016 **43%**
The business is running really well, albeit at a slower growth rate than in the recent past. But at today’s value point (P/E of 18), growth doesn’t need to be as fast as it was in order for the stock to do well.
Here are the historical value ranges. One can see that the price hit a P/E of about 16 or 17 in almost every quarter the past few years. It also hit the mid-20s and 30s. But growth has been faster too.
Qtr EPS QoQGr TTMEPS TTMGr Hi Lo Close P/E P/E Hi P/E Lo 1YrPeg
Mar-11 $0.08 $7.89 $5.95 $6.85
Jun-11 -$0.21 $7.16 $4.43 $4.83
Sep-11 $0.06 $5.96 $4.44 $4.68
Dec-11 -$0.39 $5.14 $3.92 $4.04
Mar-12 -$0.02 -129.2% -0.57 $4.90 $3.74 $4.24 -7.5 -8.6 -6.6
Jun-12 -$0.01 -93.5% -0.37 $7.17 $4.17 $6.79 -18.2 -19.2 -11.2
Sep-12 $0.07 29.4% -0.36 $7.46 $6.02 $6.80 -19.1 -20.9 -16.9
Dec-12 $0.03 -106.8% 0.06 $6.91 $5.06 $6.17 97.4 109.2 79.9
Mar-13 $0.04 -285.7% 0.13 -122.9% $7.54 $5.67 $7.05 54.2 58.0 43.6 -0.44
Jun-13 $0.05 -450.0% 0.19 -150.9% $8.17 $6.66 $8.00 42.1 43.0 35.1 -0.28
Sep-13 $0.18 140.9% 0.29 -182.2% $10.52 $7.98 $10.37 35.4 35.9 27.2 -0.19
Dec-13 $0.09 250.0% 0.36 468.4% $11.65 $8.87 $11.04 30.7 32.4 24.6 0.07
Mar-14 $0.20 369.2% 0.52 300.0% $12.26 $8.82 $12.18 23.4 23.6 17.0 0.08
Jun-14 $0.23 385.7% 0.70 268.4% $15.84 $11.05 $15.23 21.8 22.6 15.8 0.08
Sep-14 $0.33 88.7% 0.86 192.0% $21.56 $14.82 $17.77 20.7 25.2 17.3 0.11
Dec-14 $0.14 53.6% 0.91 151.9% $20.78 $15.92 $18.42 20.3 22.9 17.6 0.13
Mar-15 $0.37 80.3% 1.07 105.8% $24.75 $18.41 $23.97 22.4 23.1 17.2 0.21
Jun-15 $0.52 127.9% 1.36 94.3% $38.26 $23.33 $36.60 26.9 28.1 17.2 0.29
Sep-15 $0.43 29.0% 1.46 70.0% $54.53 $36.53 $44.69 30.7 37.4 25.1 0.44
Dec-15 $0.19 32.6% 1.50 65.8% $49.28 $24.56 $30.21 20.1 32.8 16.3 0.31
In general, the numbers show a nice quarterly result, and the long-term business is doing fine. As long as they can continue executing on the brand, growth should continue, albeit at slower rates in the past.
Their cash position went down a bit from last quarter, and they added about $71 million in LT debt, which makes their balance sheet a little weaker. But it’s still in excellent shape. Diluted shares outstanding increased less than 1/10 of 1%.
So, growth is nice, but slowing. It’s okay, especially since the price of the stock is at the low end of its range the past few years. Continued measured, predictable growth should be a catalyst for price appreciation. Perhaps the market wants to see at which level earnings growth stabilizes before expanding the multiple it will pay for the stock. I don’t really care, because the business is doing really well.
I bought more a few days ago. From the looks of it, I have a nice paper profit on that position as aftermarket trading has pushed the price up to about $29.30 or almost 8%.
I was just thinking, and it has nothing to do with the business, but it will be interesting to see if the $US weakens how it could impact earnings now that international sales is approaching 50% of total sales.
All-in-all a really nice quarter.
DJ