As Skechers U.S.A., Inc. SKX gears up to unveil its third-quarter 2024 earnings results on Oct. 24 after market close, investors are eager to gauge the company's performance. Known for its innovative footwear and strong brand presence, Skechers has been navigating through changing market dynamics and evolving consumer preferences.

The company is expected to register an increase in the top line, with the Zacks Consensus Estimate for revenues standing at $2.32 billion, which indicates a notable 14.8% improvement from the prior-year figure.

The Zacks Consensus Estimate for third-quarter earnings per share has been stable at $1.15 over the past 30 days, which suggests an increase of 23.7% from the year-ago period. Skechers has a trailing four-quarter earnings surprise of 11.2%, on average. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by a margin of 3.2%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Key Factors to Observe for Skechers' Q3 Earnings

Skechers' growing emphasis on direct-to-consumer (DTC) channels has been a key growth driver, and this trend is likely to have continued into the third quarter. The company’s focus on expanding its physical retail footprint globally, as well as boosting its e-commerce presence, ensures increased brand visibility and better engagement with customers. By streamlining its retail operations and continuing to open more company-owned stores, Skechers is set to benefit from a broader consumer reach. For the third quarter, the Zacks Consensus Estimate for DTC sales is pegged at $955.4 million, suggesting an increase of 12.3% from the year-ago period.

Skechers has seen strong performance in its wholesale business, particularly domestically, with growing demand across key product categories. The company’s focus on expanding in international markets like India and China, combined with local production and regulatory improvements, offers significant potential for top-line growth. The consensus estimate for wholesale sales is projected at $1,333.4 million, indicating year-over-year growth of 11.9%. 

Skechers' focus on innovation in comfort technologies and performance footwear, combined with celebrity endorsements, is driving consumer demand globally. The brand's ability to resonate with diverse consumer groups from athletes to everyday consumers positions it well for sustained growth. By continuously expanding its product categories and keeping its offerings relevant and trendy, the brand is capturing consumer interest, driving both repeat purchases and attracting new customers. 

While Skechers has several tailwinds, investors should be mindful of margin pressures. The company's increased marketing and demand-generation investments, while crucial for long-term growth, come with significant upfront costs. Seasonal variations and changes in consumer spending patterns may impact sales volume and operational efficiency. Competitive pressures from other brands, along with macroeconomic factors like inflation and fluctuating exchange rates, could also affect profitability.

What the Zacks Model Says About Skechers

As investors prepare for Skechers’ third-quarter results, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Skechers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. 

Skechers carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -0.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

3 Stocks With the Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:

Abercrombie & Fitch ANF has an Earnings ESP of +3.97% and sports a Zacks Rank of 1 at present. ANF is likely to register top-line growth when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.18 billion, which suggests 11.3% growth from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Abercrombie & Fitch’s third-quarter earnings is pegged at $2.31 per share, which calls for 26.2% growth from the figure reported in the year-ago quarter. ANF delivered an earnings beat of 28%, on average, in the trailing four quarters.

Tapestry TPR currently has an Earnings ESP of +1.95% and a Zacks Rank of 2. TPR's top line is anticipated to decline year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.47 billion, which suggests a 2.6% fall from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Tapestry’s first-quarter earnings is pegged at 95 cents a share, up 2.2% from the year-ago quarter. TPR has a trailing four-quarter earnings surprise of 10.3%, on average.

Deckers Outdoor DECK has an Earnings ESP of +1.27% and currently carries a Zacks Rank of 3. DECK's top line is anticipated to advance year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.20 billion, which suggests a 9.4% increase from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Deckers’ second-quarter earnings is pegged at $1.22 per share, up 7% from the year-ago quarter. DECK has a trailing four-quarter earnings surprise of 47.2%, on average.

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