Skechers (SKX) Lined Up for Q3 Earnings: What's in Store?
Skechers U.S.A., Inc. SKX is likely to register top-line growth when it reports third-quarter 2023 earnings on Oct 26 after market close. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,007 million, indicating a rise of 6.9% from the prior-year quarter’s reported figure.
The consensus estimate for third-quarter earnings per share is pegged at 77 cents, suggesting an increase of about 40% from the year-ago period’s tally. This estimate has remained stable over the past 30 days, underscoring the market's confidence in Skechers' performance.
This designer, developer, marketer and distributor of lifestyle and performance footwear stunned analysts with an earnings surprise of 88.5% in the last reported quarter. SKX has a trailing four-quarter earnings surprise of 39.1%, on average.
On its last earnings call, management guided sales between $1.95 billion and $2 billion and earnings in the band of 70 cents-75 cents a share for the third quarter.
Key Factors to Note
Skechers’ strategic emphasis on expanding the direct-to-consumer business, enhancing the brand's global presence and delivering innovative and high-quality products to consumers stands out as a pivotal driver for its revenues. The company’s focus on expanding the retail network, advancing its omnichannel presence and strengthening distribution capabilities has been instrumental in fortifying its market position and ensuring sustained growth.
We anticipate direct-to-consumer revenues to increase 14.5% in the third quarter. This growth is fueled by expected improvements of 11.7% and 17.1% in the domestic and international direct-to-consumer businesses, respectively.
SKX’s international business remains a significant sales driver. The company's success in diverse regions, such as the Asia-Pacific and Europe, the Middle East, and Africa, can be attributed to its unwavering commitment to delivering innovative, high-quality products tailored to regional preferences. We expect the international wholesale business to increase 7.9% in the third quarter. This is in sharp contrast with the domestic wholesale business, which is expected to decline 8.1% year over year.
Apart from the aforementioned factors, Skechers' disciplined approach to managing operating expenses is likely to have contributed to the company’s bottom-line performance. Despite higher general and administrative expenses in the last reported quarter, these investments have supported the company's volume-driven growth in the direct-to-consumer segment and international markets. We foresee an operating margin expansion of 150 basis points in the third quarter.
Skechers U.S.A., Inc. Price, Consensus and EPS Surprise
Skechers U.S.A., Inc. price-consensus-eps-surprise-chart | Skechers U.S.A., Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t 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.
Although Skechers currently has a Zacks Rank #3, its Earnings ESP of 0.00% makes the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Build-A-Bear Workshop BBW currently has an Earnings ESP of +3.62% and carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2023 earnings per share is pegged at 51 cents, flat year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Build-A-Bear Workshop’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $107.6 million, which indicates an increase of 3% from the figure reported in the prior-year quarter. BBW has a trailing four-quarter earnings surprise of 21.6%, on average.
Ulta Beauty ULTA currently has an Earnings ESP of +4.92% and a Zacks Rank of 2. The company is likely to register a decrease in the bottom line when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $5.00 suggests a decline of 6.4% from the year-ago reported number.
Ulta Beauty’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.48 billion, which suggests an increase of 6.2% from the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 12.9%, on average.
The Home Depot HD currently has an Earnings ESP of +0.63% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.80 suggests a drop of 10.4% from the year-ago quarter.
Home Depot’s top line is anticipated to decline year over year. The consensus mark for revenues is pegged at $37.7 billion, indicating a decline of 3% from the figure reported in the year-ago quarter. HD has a trailing four-quarter earnings surprise of 2.2%, on average.
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The Home Depot, Inc. (HD) : Free Stock Analysis Report
Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
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