Skechers: This Footwear Retailer's Smart Strategies Will Lead to Better Results

Skechers USA (SKX, Financial) reported robust year over year growth in the third quarter that topped the analyst’s consensus. Its numbers were negatively impacted by foreign exchange fluctuations, but these were only minor setbacks. The company has strong fundamentals and continues its strong momentum across all product segments. To strengthen its prospects further, Skechers is investing in its global infrastructure to create high efficiency. In this direction, the company added a new distribution facility in Chile, enhancing its reach in the region.

Growing across the board

During the quarter, Skechers had a strong performance across various product segments such as men's and women's sport, women's sport active, Skechers GO and others. Kids footwear segment although had a slight disappointment, but it was anticipated by the management on account of shift of some back-to-school product into the second quarter. Some analysts had exaggerated this situation on account of some miss conception but it was cleared by the management later. Skechers is determined to perform better in the days ahead and consequently launched animated commercials to attract its young consumers. Going forward it expects the kids segment to stabilize in the beginning of 2015.

Apart from television advertising, the company is promoting its products through various events organized across the country. During the quarter it launched the new Skechers GO GOLF footwear at the Ryder Cup. Similarly for the present quarter it has planned to launch Skechers GO Run 4 at the New York Marathon, which will be followed by further marketing, campaigns. Such promotions will catch customer’s attentions and will help to increase its sales.

The company is also responding well to the needs of its consumers and is placing the products according to their requirements.

Conclusion

With its strong performance during the third quarter it has caught the attention of various analysts and investors. Jale Sole of Morgan Stanley believes that Skechers has a broader product assortment with diverse customer base. It has an efficient supply chain, which is distributed across various geographies. This provides us with a picture of the strong fundamentals of the company that could boost its growth in the days ahead. The stock performed quite well in the past one year, after which it entered a short consolidation. But looking at its performance during the quarter and considering its future prospects it could continue the same momentum in the coming months.