Management hinted that extended delivery times also led to the inventory pile-up. However, Skechers indicated that it would try to lower its inventory level over the next two quarters, while generating reasonable margins. We believe that international business should act as a catalyst to normalize the inventory level.
Currently, we are maintaining our Underperform recommendation on the stock, until we find any catalyst triggering a change in our opinion. Our target price of $19.00, 6.5X 2010 EPS, reflects this view.
SKECHERS USA-A (SKX): Free Stock Analysis Report
Zacks Investment Research
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