SKX meets 4Q profit forecasts

On a per-share basis, the Manhattan Beach, California-based company said it had profit of 19 cents. Earnings, adjusted for pretax expenses, came to 20 cents per share.

The results met Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was also for earnings of 20 cents per share.

http://finance.yahoo.com/news/skechers-meets-4q-profit-forec…

A little more detail here, shares up about 8% AH.

-Record Annual Sales of $3.147 Billion

-Record Fourth Quarter 2015 Net Sales of $722.7 Million, an Increase of 26.8 Percent

-Fourth Quarter 2015 Earnings from Operations of $54.7 Million, an Increase of 65.7 Percent

-Fourth Quarter 2015 Net Earnings of $29.4 Million

-Fourth Quarter 2015 Diluted Earnings Per Share of $0.19

The first link I provided is more accurate as it states EPS is .20 after a pretax expense adjustment. Up 8% after hours.

http://finance.yahoo.com/news/skechers-announces-fourth-quar…

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Some up to date numbers:


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	

EPS (diluted)			Q1		Q2		Q3		Q4			
2013								0.53		0.28	
2014				0.61		0.68		0.99		0.43		
2015				1.10		1.55		0.43*		0.19	

*SKX 3-for-1 stock split 10/15/15

Current (2015 Q4 Earnings):

Revenue Growth (millions)
2014 Q4 TTM Revenue = 2377.6
2015 Q4 TTM Revenue = 3147.4
Year Over Year Revenue Growth = 32.4%, previous quarter rev growth 32.6%

EPS Growth (diluted)
2014 Q4 TTM Earnings = 2.71 (non-split adjusted)
2015 Q4 TTM Earnings = 1.50 (split adjusted)
Year Over Year EPS Growth = 66.7%, previous quarter EPS growth 70.7%

P/E (Check Current Price) = 27.17/1.50 = 18.11

1YPEG = 18.11/66.7 = 0.27

Matt
MasterCard (MA) Ticker Guide
Long SKX
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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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

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Here’s a Foolish take from Rick Munarriz:

It’s easy to see why Skechers (NYSE:SKX) investors could have been gun shy ahead of this afternoon’s quarterly results. The country’s leading maker of walking footwear had seen its stock shed nearly a third of its value the day after reporting disappointing quarterly results last time out.

Things weren’t as earth-rattling this time around. Net sales hit $722.7 million for the holiday quarter, 27% ahead of the prior year’s showing. That was in line with the same 27% rate that it checked in with when the stock got slammed after its previous report – and well below the 40% and 37% growth rates in showed off during the first two quarters of 2015 – but at least the market was ready for it this time. Steady growth is better than decelerating growth.

Gross margins inched higher, and that’s another welcome sight. Skechers’ operating profit soared 66% to $54.7 million. Some of that margin expansion eroded on the way to the bottom line, as reported earnings climbed just 34% to $29.4 million, or $0.19 a share.

Read the whole thing at http://www.fool.com/investing/general/2016/02/10/skechers-ea…

And, yes, I love how last quarter’s results will always be known as “disappointing”. Oh well, that perception let me buy my shares at cheaper entry points, so I’m not complaining.

Matt
MasterCard (MA) Ticker Guide
Long SKX
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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