Sketchers Considers Stake in LA Clippers - Analyst Blog
May 05 2014 - 7:00PM
Zacks
Skechers USA Inc. (SKX) hinted that it is
seeking to acquire a stake in the Los Angeles Clippers basketball
team, which is expected to be up for sale after it was involved in
a controversy following racist remarks made by its owner, Donald
Sterling. Shares of this footwear retailer dropped roughly 5%
Friday.
Manhattan Beach, CA-based Skechers has been renowned in the
athletic performance footwear market, and a stake in Clippers would
help augment its brand value. The company in 2011 introduced
Skechers Performance Division and line of Skechers GO footwear, and
brought on board Olympic medalist Meb Keflezighi, who triumphed the
2014 Boston Marathon and became the first American to do so since
1985.
In the past, Skechers has signed other great icons and
personalities like Joe Montana, Larry Bird, Wayne Gretzky, Evander
Holyfield, Karl Malone, Mark Cuban, Tommy Lasorda and Rick Fox for
its product endorsements.
Skechers kick-started 2014 as its top and bottom lines for the
first quarter surpassed the Zacks Consensus Estimate and recorded
year-over-year growth as well. Furthermore, the company set records
of reporting the highest sales ever for the first quarter and
second highest quarterly sales in its 22-year history of
operation.
First-quarter earnings of 61 cents a share was favorable when
compared to the Zacks Consensus Estimate of 33 cents. Moreover, the
reported figure rose over fourfold from 13 cents in the prior-year
quarter.
Increased demand for products, product innovation across
multiple categories and healthy performance across all revenue
channels led to a 21% rise in revenues to $546.5 million in the
first quarter, which surpassed the Zacks Consensus Estimate of $507
million.
With increased focus on the new line of products, cost
containment, inventory management, global distribution platform,
healthy Apr 2014 order rates and backlogs, the company is confident
of sustaining the growth momentum throughout 2014.
Skechers currently has a Zacks Rank #1 (Strong Buy). Other
attractive stocks in the shoe and related apparel industry include
Brown Shoe Co. Inc. (BWS), Carter's,
Inc. (CRI) and Rocky Brands, Inc. (RCKY)
all holding a Zacks Rank #2 (Buy).
BROWN SHOE CO (BWS): Free Stock Analysis Report
CARTERS INC (CRI): Free Stock Analysis Report
ROCKY BRANDS (RCKY): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
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