Skechers U.S.A., Inc.’s SKX shares are currently trading 9.8% below its 52-week high of $75.09 attained on June 12, 2024, making investors contemplate their next moves. In the past year, the SKX stock has gained 8.1%, comfortably outperforming the Zacks Shoes and Retail Apparel industry’s 22.9% decline.

SKX Stock Past-Year Performance

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This leading designer and producer of innovative, niche footwear and accessories closed Tuesday’s trading session at $67.73. The stock is trading above its 50 and 200-day simple moving averages of $64.30 and $65.22, respectively, highlighting a continued uptrend.

SKX Trades Above 50 & 200-Day Moving Averages

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From a valuation perspective, the company stands out as a compelling value play within the industry, trading at a forward 12-month price-to-earnings ratio of 14.06, below the industry average of 27.29 and the Consumer Discretionary average of 19.16. This undervaluation highlights its potential for investors seeking attractive entry points. SKX's Value Score of A emphasizes its investment appeal.

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Skechers’ Multi-Brand Expansion & DTC Success

SKX is adopting a multi-brand strategy to diversify its portfolio, focusing on comfort-oriented footwear to appeal to a wide range of consumers. The company is making investments to enhance its infrastructure, including e-commerce and retail operations, supporting its omnichannel expansion and direct-to-consumer (DTC) growth.

Skechers’ DTC segment highlights its commitment to enhancing consumer engagement, optimizing the retail experience and leveraging online platforms to broaden its reach. In the third quarter, the DTC segment delivered robust results, with sales climbing 9.6% year over year to $931.7 million, reflecting strong consumer demand for Skechers' products. Notably, international DTC sales grew 14.4%, whereas domestic DTC sales experienced a 3.7% increase in the same period.

SKX’s Solid Wholesale Segment: Key Growth Driver

The company remains optimistic about continued growth of its wholesale segment throughout fiscal 2024, driven by consistent product demand, and investments in logistics and retailer relationships. In the third quarter, the wholesale segment delivered impressive results, with sales increasing 20.6% year over year to $1.42 billion. This growth was propelled by a 26% increase in domestic sales and an 18% rise in international sales.

The robust domestic performance underscores strong consumer reception of the company’s comfort technologies, leading to double-digit sales growth across men’s, women’s and children’s footwear categories, accompanied by significant volume gains. Internationally, wholesale growth was especially strong in the EMEA region, supported by sustained demand for innovative products and improved shipment efficiency.

SKX Gains on International Expansion, Retail Initiatives

Skechers' international operations and retail expansion are pivotal to its growth strategy. In the third quarter, international revenues rose 16.4% year over year and accounted for 61% of total revenues. EMEA led with a 30.2% increase, whereas the Americas grew 13.6% and the APAC saw a 7.4% rise, driven by markets like Japan, Korea and India, which posted 24% growth. 

The company expanded its retail presence, operating 5,332 branded stores globally, including 1,743 company-owned locations. In the third quarter, 68 company-owned and 121 third-party stores were opened across key markets such as China, the United States and India. The company plans to open 55-60 stores in the fourth quarter, reflecting its focus on global reach and customer engagement.

Skechers Raises 2024 Outlook, Eyes $10B Sales Target by 2026

SKX revised its fiscal 2024 sales forecast. It expects revenues of $8.93-$8.98 billion, up slightly from the previously mentioned $8.88-$8.98 billion. This marks solid growth from the $8-billion achieved in fiscal 2023. The company also increased its earnings per share (EPS) guidance to $4.20-$4.25 from the prior stated $4.08-$4.18, reflecting a notable rise from last year’s EPS of $3.49.

To achieve its ambitious goal of $10 billion in annual sales by 2026, Skechers plans a capital expenditure of $375-$400 million. These investments will prioritize store openings, bolstering omnichannel capabilities and enhancing its distribution infrastructure, supporting sustained growth and operational efficiency.

Final Thoughts on SKX

Skechers presents a compelling investment opportunity due to its strong performance and growth initiatives. The company’s focus on expanding its multi-brand portfolio, enhancing its DTC segment and driving growth in its wholesale business demonstrates its ability to meet evolving market demands. SKX's international expansion and ongoing investments in retail infrastructure position it for continued growth.

With an appealing valuation and optimistic prospects, Skechers is a bullish choice for long-term investors. The company currently has a Zacks Rank #2 (Buy).

Other Key Picks

Some other top-ranked stocks are The Gap, Inc. GAP, Abercrombie & Fitch Co. ANF and Steven Madden, Ltd. SHOO.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP has a trailing four-quarter average earnings surprise of 101.2%.

Abercrombie is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15%, respectively, from the fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 14.8%.

Steven Madden designs, sources, markets, and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2.

The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 8.6% and 13.6%, respectively, from the year-ago actuals. SHOO delivered a trailing four-quarter average earnings surprise of 9.8%.

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