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Skechers U.S.A., Inc. Message Board

  • ospreysailors ospreysailors Feb 11, 2011 4:50 PM Flag


    I'm contemplating taking a position on this stock but I have a question I can't seem to find an answer to. It appears this stock is suffering from nothing more than the presumption that some of their products are a fad and an inventory overhang. Is this correct? Their previous earnings appeared ok.

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    • I checked some of your other post and it appears you try to contribute on the board you hang out on, so I will post a couple of the things I missed when I first came to this stock. I should have done a little better dd, in hindsight.

      You have probably figured out that the earnings did indeed show nice growth, but the analyst had gotten way ahead of themselves and management did not help them out. I have come to the conclusion management really got caught with their pants down the last quarter they reported (Q3), but I do not believe the fad therory about the Shape Ups styles (toning). They will face competition and they will not continue to make the hugh margins they have in the past. IMO, to many other companies are still making efforts to develop category styles, so the whole industry has to be wrong, not just SKX, for the fad therory to have legs, IMO. This is not the first time they have had inventory issues, but they have worked them out in the past. The CEO has a gunslinger style when he hits a winner, but one of his sons is more conservative it appears and they learned something from this mistake, I hope.

      IMO, you must accept that you are investing in a family business that has common stock. There are two classes of stock.
      Class A, one vote per share. Class B, carries 10 votes per share. The family that started the company is the same that started and was forced out of LA Gear, before it went bankrupt (they seem to have learned some lessons from that experience. The Class B shares when sold, immediately convert to Class A shares. The family is in total control.
      The CEO has stated the only reason the stock is listed at all is because his children had not been in a company that was listed and they wanted the experience of a public company. CFO does all public appearances, including cc, alone.

      IR is non-existant. I have yet to see a post here where anyone got a response and many have tried.

      I also noticed on one of your post, you are for the most part an options trader. I doubt I will ever own shares here again, going into earnings without protection, after getting toasted last quarter.
      Sterne Agee is a mm here and they from what I can tell, work it with upgrades and of late downgrades. IMO they move the price at will. They at present have a $16 price target, and with a miss on earnings could be right, quickly, if they want the price there. Three new long hedgies have entered since Nov (one other one lightened up) might well have put in a floor around $19, but if the inventory story is or is not better, we might well see one heck of a battle.

      There is a short position(s) that is dug in at the moment, it appears. Who knows where they entered, but they have had many shots sub $20 to leave and have not.

      As for the inventory story, they claimed by end Q1 it would be fixed, then have since made comments that imply they might well liquidate what is left in Q2, to start clean for back to school season (Q3), which is their most important season. You will find many efforts on this board to guess at what is happening and can draw your own conclusions about the progress they are making.

      GLTU with your decision.

    • If I were you, I would wait until after earnings to see where this stock is headed.

20.08+0.31(+1.57%)Oct 26 4:03 PMEDT