Analyst Bumps Up Skechers Price Forecast, Cites Strong Wholesale and European Growth Despite Earnings Miss

Wedbush analyst Tom Nikic reiterated an Outperform rating on Skechers U.S.A., Inc. SKX, raising the price forecast to $79 from $76.  

Skechers reported quarterly earnings of 91 cents per share, which missed the analyst consensus estimate of 94 cents by 3.19%. The company reported quarterly sales of $2.16 billion.

According to the analyst, the company saw strength in U.S. wholesale, Europe DTC, and gross margins, resulting in raised FY sales/EPS guidance.

In addition, the quarter would have been more robust if not for a pushout of revenue to the third quarter.

Also Read: Skechers Reports Q2 Results: Here’s The Details

On the flip side, U.S. DTC and China slowed meaningfully, Nikic cautioned. All in all, the analyst sees favorable risk/reward here.

The analyst raised FY24/25 EPS forecasts to $4.16/ $4.92 (from $4.06/$4.75).

According to the analyst, the domestic wholesale channel benefited not only from easy comparisons but also from strong consumer response to Slip-Ins and other new products.

However, U.S. DTC trends continued to slow, growing just 1% YoY against the year’s toughest compare (+29%), owing to slowing foot traffic in stores, though digital traffic improved.

The analyst adds that the company’s 2H guidance embeds modest expectations in U.S. DTC.

Price Action: SKX shares are trading higher by 1.90% to $64.92 at last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Wikimedia Commons

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