SKX Reports 2017 Q1 Earnings

Looks to be basically in line with what management was guiding for. From the press release:

“First quarter 2017 net sales represent a new quarterly record and the first time we exceeded $1 billion in quarterly sales. We are particularly proud of the growth in the quarter considering the tough comparison to 2016, which included the benefit of an additional day in February and Easter falling in March,” began David Weinberg, chief operating officer and chief financial officer. “The growth was the result of double-digit increases in both our international distributor and subsidiary/joint venture businesses, as well as in our global Company-owned Skechers retail business. Further, in our domestic wholesale business, we shipped 4.5 percent more pairs than in the first quarter of 2016 but average price per pair decreased by 4.8 percent primarily due to stronger sales in our lower-priced lines including BOBS from Skechers and our sandal business.”

Quarterly net sales increased 9.6 percent to $1.073 billion compared to first quarter 2016. The growth was the result of a 16.8 percent increase in the Company’s international wholesale business and a 12.8 percent increase in its Company-owned global retail business which included comparable same store sales increases of 2.9 percent. Additionally, the negative currency translation impact on its gross margins in its international wholesale and international Company-owned retail businesses for the first quarter was $6.1 million. The Company’s domestic wholesale net sales were relatively flat compared to the first quarter of last year.

And CEO Greenberg stated:

“Our global footprint continues to grow with our ongoing success in Canada, Chile and China as well as in India, Australia and Turkey, and many other markets. This success is in part due to the expansion of Skechers retail stores around the world. At quarter end, there were 2,055 Skechers retail stores, including 1,471 third-party-owned locations, of which 551 are in China alone. We’ve come a long way since our first billion dollar year, and our first retail store in Manhattan Beach, but we plan to accomplish much more in product design, marketing and distribution. In the United States, we are the No. 1 Casual, Work, and Walking brand and the No. 2 All Footwear for Women*, and we believe we can reach these coveted positions in numerous other countries around the world. As we’ve begun showing our Spring 2018 lines to accounts this week, I’m looking forward to delivering our back-to-school product in June and July, and continuing to profitably grow Skechers this year and in the coming years.”

Guidance looks okay.

Based on these key indicators, the Company believes it will achieve net sales in the second quarter in the range of $950 million to $975 million, which would be a second quarter sales record, and earnings per share of $0.42 to $0.47. This projection includes flat to slightly positive sales increases in the Company’s domestic wholesale business, and increases in its international business and Company-owned retail stores.

Read the entire press release at…

And here’s a look at the 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	
2016				978.8		877.8		942.4		764.3
2017			       1072.8

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		0.48		0.42		0.04
2017				0.60

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

2017 Q1 Earnings (Current):

Revenue Growth (millions)
2016 Q1 TTM Revenue = 3358.2
2017 Q1 TTM Revenue = 3657.3
Year Over Year Revenue Growth = 8.9%, previous quarter rev growth 13.2%

EPS Growth (diluted)
2016 Q1 TTM Earnings = 1.77
2017 Q1 TTM Earnings = 1.54
Year Over Year EPS Growth = (13%), previous quarter EPS growth 4%

P/E (Check Current Price) = 26.15/1.54 = 17

Right now shares are up about 3% in AH trading.

Long SKX
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