Skechers USA Inc. (NYSE: SKX) designs and markets contemporary footwear for men, women and children under seven individual brands, including the Skechers, Michelle K, and Somethin' Else names.
In general, analysts expect adequate same store sales gains in FY 2008 for Skechers' 150 company-owned stores, and via department store distribution. Analysts also expect new product introductions to proceed cautiously, as the footwear sector braces for continued discretionary spending reductions by U.S. consumers, due to the sluggish U.S. economy.
Meanwhile, costs remain under control and margins are adequate. The Reuters FY 2008/FY 2009 EPS consensus estimates for SKX are $1.97 to $2.26.
The risks? Analysts are keeping an eye on intensifying competition from low-cost footwear producers in China, Vietnam, and India.
The First Call mean rating for SKX is: Buy [8 firms]. Mean 2008 target: $27 [high: $31, low: $19].
Stock Analysis: Skechers is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from SKX's shares. Sell/Stop Loss if you were to purchase shares in this company: $13.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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