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Skechers USA Inc. Message Board

  • pepepino85 pepepino85 Sep 24, 2010 3:36 PM Flag

    Industry Viewpoint

    Amazing amount of uninformed drivel on the site. I’ve spent about a week researching SKX, talking to all of my industry contacts, even internationally, plus store visits and many calls to store managers across the country. I’ve also talked with industry ‘experts’ who advise hedge funds (for big fees). I’ve been adding aggressively as a result, 5k shares today up to total 31k shares for a long term hold, targeting $50 by end of 2011. I’ll write a long piece over the weekend from my notes. But, Shape-ups story is still strong and will continue growing next year. The buyers think that the new Fall collection is great (lighter and more aesthetically pleasing).
    The original Shape-up has become a basic / classic product which people keep returning to buy, so no aging or inventory provisioning issue at year end. Management have figured out that below $99 is the magic price point. The recent $10 to $20 discount has got volumes moving again.
    International a year behind US, so still huge growth ahead there. Major inroads developing in countries like UK and Germany. Specific retailers like Famous Footwear made silly mistakes in doubling the Shape-ups inventory prior to BTS (back to school) treating shape-ups as an athletic category, but Shape-ups has nothing to do with BTS, it’s for regular folks, like nurses and workers on their feet a lot.
    Mums don’t buy for themselves during BTS, so the sales slow down was seasonal and expected. Retail sell through has picked up again last two weeks to previous levels and is still the number one selling shoe in all family footwear outlets. SKX have totally outflanked arrogant Nike developing this new category which is analoguous to what Reebok did to Nike womens cat with the Aerobic shoe in the 80s/90s. Nike is apparently sticking with the Free tech training shoe for women, but we know in the trade that this will never work in the broad walking mkt. SKX are going to ‘own’ the ‘fitness walking’ category which is going to be a $1.5 billion mkt within 2 years. No one else is committing the scale of A&P $ and PD effort to this opportunity like SKX.
    The Reebok toner is uncomortable and laterally unstable, so the only material competitor is going to fade. The copy cat brands will lose store presence due to disassorted sizes, slow sales, heavy dicounting and lack of A&P clout. SKX will be the Nike of this category.
    Stellar growth to continue. A big squeeze ahead for the 29% short interest when mgt elaborate on their plans for 2011. I think Oct 29th is 3rd qtr conf call.
    But, members should do their own research. Go to and call stores. Ask the store managers what customers think about Shape-ups. Buy a pair for yourself and wifey, try them out. See the reviews an Zappos.com (the $billion web retailer of footwear). The health benefit claims are being validated.
    No idea what will happen to stock price short term as first news catalyst only Oct 29th. Analysts will probably wait until then before changing hold ratings. But, industry experts I’ve talked to are now advising hedge funds that all is fine with SKX.

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    • Nice work, pepe. This is some really helpful information.

      Shorts have been making this a very dysfunctional board; good to hear reasonable people with facts, not hyperbole.

    • I have the latest short interest at a little over 9 million shares. Thanks to those with informative posts on this board who are few and far between. This is a good example of why so many investors have left the market. The company has done everything right, grown revenue 40-50% this year, hugely profitable, great balance sheet, great brand and with no news since reporting earnings on July 28th, the stock is down 40%. The average investor has his money in a bank cd earning 1% for 3 years and I can't really blame him. As for me, I am aggressively buying a company at 6 times earnings, 3 times ebitda with 6 bucks cash and no debt, 18 bucks in book value and who has a huge opportunity to grow internationally. Are there questions about shape ups and its ability to continue to grow? Absolutely, but that is what makes it so cheap. Go on zappo's to see the customer reviews for shape ups. The vast majority of buyers love them. I say the company can manage the product and new product line roll outs and the uncertainly will be lifted in 3 months and the stock is back to 35. Will they do a buyback with the 300 million in cash they have? Everything says they won't because they never have, but I say they just might. Cash earns nothing and a buyback makes earnings go higher by about 15% for each share bought back. Don't be surprised if they do and they announce it soon. I also can't figure out how 9 million shares can be sold short here. Again, all naked short I am sure, Wall Street at its absolute best.

    • I got in and out of SKX around $38, still wondering where it will bottom. As for Shape-ups, I have real doubts. I bought MBTs two years or so ago--same theory, same shape. They're OK for walking but not for standing--unless you like feeling like you're falling over all the time. Definitely not a relaxing shoe!

      Even as a walking shoe, the MBT ranks behind others in my closet.

    • The 3rd qtr results are on 27th Oct per the PR guys...

    • 29 percent short before any of this crap came out in September I bet short interest is closer to 40 percent now, almost half the float

      • 1 Reply to alibabeshome
      • Ali,

        The shorts often do that - short a stock heavily (especially when they have a corroborating story to go with it), deliver some well placed news articals, and post incessently as if the world were coming to an end for the company involved.

        Today is short interest dissemination date, but when I go to the NASDAQ site, which is my source, it reads "ticker symbol not found."

        If you can come up with short interest for SKX from another site, I'd love to see it.

        specsit.

        I am long SKX.

    • Excellent research job.

      Many thanks for sharing.

      I will add to my position.

      specsit.

      I am long SKX.

    • u are a clown, yes

 
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