Skechers (SKX, Financial), the California-based American shoe company, has been on a terrific run since the start of 2015. The stock has shot up over 50%, and the company’s growth doesn’t look like it's stopping any time soon.
Improvement Initiatives
Skechers has detailed an absolutely incredible significant turnaround over the last year, which results in really big jump to a new level in the first quarter 2015.
In the first quarter, the company recorded sales of $768 million, an upsurge of 40.5% over last year. Average price per pair was up by 5.9% or $1.27 in its domestic wholesale business.
Operating earnings and net earnings were $88.2 million and $56.1 million respectively. The company detailed gross margin of 43.3% and diluted earnings per share of $0.10.
Worldwide Growth: The remaining first quarter growth is attributable to the continued strong demand for men’s, women’s and kids footwear collections globally. The company proclaimed double-digit growth in several countries that were adversely obstructed by currency and triple digit increase in two of its largest international markets. There was 59.5% increment in their international wholesale business with an upsurge of 62.7% and 58.5% from their distributors and joint venture partners respectively.
Branding and Marketing: When we talk about footwear performance, Sketchers is not considered in the same league with some of its main competitors like Nike (NKE, Financial). The company also ran TV campaigns presenting the two elite runners during the quarter and is very proud of Meb who at 40 years of age finished in the top 10 at the Boston marathon earlier this week after coming off a 2014 victory at the event. The company is working hard on positioning itself to achieve a strong hold in the market as a lifestyle brand with growing demand among adults.
Smart Endorsement: Over the years, the company has shelled out for some major superstars to promote it. Along with Spears and Aguilera, it’s enlisted Ashlee Simpson, The Voice winner Danielle Bradbery, and most as of late, Demi Lovato (who worked together on an accumulation of tennis shoes, too). Furthermore, much before her Vogue cover and style industry mastery, Kim Kardashian demonstrated for Skechers Shape Up shoes nearby mother Kris Jenner.
In spite of the fact that it’s difficult to accept that these stars really wear Skechers on a usual basis, that is not preventing everybody from scooping them up. Nike may be the most obvious shoe organization at this moment; however, investigators foresee that Skechers could turn into America's second most well known shoe mark a little while later.
Conclusion
Skechers has taken some shrewd initiatives to tackle intense competition. The company in making headway in various segments and is giving Nike a headache. The company is also spending smartly on advertising its brand and should continue to move higher despite its massive YTD rise, making it a great buy.
