Skechers USA (SKX 31.82, +4.12, +14.87%) is trading higher today after reporting Q4 earnings results last night and guiding for Q1. This was an impressive showing to close out 2018 and it was a very good result for the key holiday period in Q4. Also, this was the second gap higher on earnings in a row for SKX as Q3 was a strong report as well.
Non-GAAP EPS jumped 48% yr/yr to $0.31, well above prior guidance of $0.20-0.25. Revenue rose 11.4% yr/yr to a Q4 record $1.08 bln, generally in-line with prior guidance of $1.100-1.125 bln but perhaps a little light. In terms of guidance for Q1, SKX sees EPS of $0.70-0.75, which is much better than market expectations. Revenue in Q1 is expected at $1.275-1.300 bln, which is slightly below market expectations. SKX is tempering sales a bit due to FX headwinds and a shift in some sales from Q1 to Q2 due to the timing of Easter this year.
Breaking down the sales number, international wholesale was the star of the show with 18.4% growth. SKX also posted a 7.5% increase in its company-owned global retail business, and a 4.8% in its domestic wholesale business. In terms of same store comps, company-owned retail stores, including e-commerce, increased +1.1%, which included an increase of +3.0% in international stores and +0.4% in the US.
While international growth is driving overall results, SKX's domestic wholesale business is more mature and has slower growth. With that said, its 4.8% growth in Q4 was better than the full year result of +0.8% so that was good to see. For the year, SKX maintained its position in the US as the number one walking, work, casual lifestyle, and casual dress brand and moved up one position to be the third largest footwear brand in the US.
SKX saw strength across several categories such as Men's USA and Women's Performance, BOBS and work and in numerous styles such as Skechers D'Lites and men's slip-on. SKX aired sport and casual slip-on spots starring Tony Romo and sport and casual wide-width footwear featuring Howie Long.
In sum, this was another solid quarter for SKX. After the stock traded lower following Q1 and Q2 results earlier this year, investors are happy to see a nice bounce in the stock this morning. It was a nice way to close out 2018.
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