Skechers USA Inc (NYSE: SKX) Stock Soars Post Solid Earnings

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Skechers USA Inc (NYSE: SKX) stock rose over 10.2% in the pre-market session of April 23rd, 2021 (Source: Google finance) after the company posted better than expected results for the first quarter of FY 21. During the first quarter, the gross margin expanded 350 basis points to 47.6% due to increased margins in both the International Wholesale and Direct-to-Consumer segments. The strong margin performance was driven by an increase in selling price across all channels and a favorable mix of e-commerce sales. The company delivered net earnings of $98.6 million for the first quarter. Cash, cash equivalents and investments were of total $1.51 billion, which represents a decrease of 4.1% from December 31, 2020. Total inventory was $1.07 billion, which represents an increase of 5% from December 31, 2020

Meanwhile, in the first quarter, the company had increased the marketing efforts in the United States and supported many open international markets, including the airing of new campaigns with football coach.

SKX in the first quarter of FY 21 has reported the adjusted earnings per share of 63 cents, beating the analysts’ estimates for the adjusted earnings per share of 49 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 15 percent to $1.43 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue by 10.85%. This is on back of a 20.2% increase in the Company’s international sales and an 8.5% increase in domestic sales. The growth in the international sales was driven by wholesale. Domestic sales growth was driven by direct-to-consumer, including e-commerce growth of 143.0%, partially offset by a slight decline in wholesale. The Company’s International Wholesale sales grew 23.8% and Direct-to-Consumer sales rose 18.1%, offset by a Domestic Wholesale sales decline of 0.9%. The growth in the Company’s International Wholesale segment were driven by growth in China of 174.4%, which was partially offset by declines in Europe of 8.1% and a 6.5% decline in distributor sales. Direct-to-Consumer comparable same store sales rose 10.2%, driven by an increase of 25.7% domestically, which was partially offset by a decline of 27.4% internationally.

For the fiscal year 2021, the Company expects to achieve sales in the range of $5.8 billion and $5.9 billion and diluted earnings per share are expected to be between $1.80 and $2.00. Further, the Company believes that for the second quarter of 2021, the company will be able to achieve sales in the range of $1.45 billion and $1.50 billion and diluted earnings per share is expected to be between $0.40 and $0.50.

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