MW Skechers stock jumps, as 'growing awareness' of comfort shoes lifts results

By Bill Peters

CEO cites popularity of slip-on shoes, says Skechers is looking to expand into team sports

Shares of Skechers USA Inc. rallied after hours on Thursday after the sneaker maker boosted its full-year forecast, as enthusiasm for its comfort footwear held up despite a broader backdrop of more tepid demand.

The company said it expected full-year earnings per share of $4.20 to $4.25, better than a forecast in July for between $4.08 and $4.18. It said it expected full-year sales of $8.925 billion to $8.975 billion, with the low end of that forecast a bit more upbeat than July's outlook for $8.875 billion to $8.975 billion.

For the fourth quarter, Skechers forecast sales of $2.165 billion to $2.215 billion. The midpoint of that range was below Wall Street's forecasts for $2.212 billion.

Skechers shares $(SKX)$ were up 5.5% after hours.

With shoppers still anxious after a two-year inflation surge, sneaker demand has suffered. Nike Inc. $(NKE)$ is retrenching, albeit in part due to rising competition from rival casual-sneaker and running-shoe makers.

But executives at Skechers said that during the third quarter, demand at outside retailers, as well as the company's own stores and online network, was up, both domestically and abroad. They cited "growing awareness and broad acceptance of our comfort technology."

During the third quarter, Skechers reported adjusted earnings per share of $1.20, with sales of $2.35 billion. Both were above expectations.

"As more consumers view our comfort features as essential, the importance of newness and advancing our designs with our signature technologies across core and new product offerings remains vital," Chief Executive Robert Greenberg said in a statement.

"Raising awareness of our technologies, such as Skechers Hands Free Slip-ins, has been integral to our global growth," he continued.

The company is also eyeing sports as an area of expansion.

"We are in the early stages of team sports with the global rollout of Skechers court, football (soccer), basketball and cleated styles with a growing roster of Olympians and elite athletes competing in our footwear," Greenberg said,

As of Thursday's close, shares of Skechers were down 1.1% so far this year.

-Bill Peters

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October 24, 2024 18:58 ET (22:58 GMT)

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