But down 20%!?
I agree completely. If SKX’s current and forward-looking P/E was in the 20s’ or 30’s or more, reflective of the expectation of a very high growth rate, such a drop might be more understandable. But unless I’m mistaken, it’s P/E hasn’t been above the low 20s lately, and now is below 15. That’s well below the market as a whole and seems to indicate that the market thinks that SKX will be growing much more slowly than the rest of the economy (as represented by market prices). That’s just a bit too hard for me to believe.
[Note that the alternative explanation is that the market doesn’t believe that SKX’s current earnings are sustainable and therefore the current P/E is not an accurate estimate of its “true” P/E, but that’s sort of equivalent to it saying that it won’t be able to continue growing.]
as always, i am full of carp