Why Skechers Stock Is Diving

Skechers USA Inc SKX shares are trading lower by 4.53% to $47.88 Wednesday morning in sympathy with Foot Locker Inc, which reported a second-quarter revenue miss and lowered its guidance.

Skechers relies on retailers like Foot Locker to sell its products. If Foot Locker, a major distributor of athletic footwear, reports lower revenue and weak guidance, it might indicate weaker consumer demand for such products. This could raise concerns about Skechers' sales, as it suggests that one of its key distribution channels is facing challenges.

Foot Locker's performance may also reflect the overall health of the athletic footwear retail market. Since Skechers is a player in this market, its stock could be influenced by the perception that the demand for athletic shoes is decreasing due to Foot Locker's struggles. Investors might anticipate that Skechers' sales and revenue could be impacted as a result.

What Happened?

Foot Locker stock is slumping more than 30% following its second-quarter results and lowered 2023 sales and earnings guidance. The company is also pausing its dividend to enhance flexibility.

FL reported a second-quarter FY23 sales decline of 9.9% year-on-year to $1.86 billion, missing the analyst consensus of $1.88 billion.

Adjusted EPS of $0.04 was in-line with the analyst consensus...Read More

According to data from Benzinga Pro, Skechers has a 52-week high of $56.53 and a 52-week low of $31.28.