NEW YORK (TheStreet) -- Shares of Skechers USA Inc. (SKX) are lower by 9.98% to $52.29 on heavy volume in mid-afternoon trading on Wednesday, after analysts noted the shoe retailer's sales are falling, as the back-to-school shopping season finishes up, Bloomberg reports.
Sales dropped almost 3% for the week ended Sept. 20, as the company's offerings for children have started to slow down, a Sterne Agee analyst said in a note today, Bloomberg added.
Almost 8% of Skechers' revenue is driven by the sale of children's shoes, which dropped 42% last week, Bloomberg said.
Separately, TheStreet Ratings team rates SKECHERS U S A INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SKECHERS U S A INC (SKX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 37.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SKX's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SKX has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 385.71% and other important driving factors, this stock has surged by 101.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- SKECHERS U S A INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SKECHERS U S A INC increased its bottom line by earning $1.08 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($2.54 versus $1.08).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 390.6% when compared to the same quarter one year prior, rising from $7.09 million to $34.80 million.
- You can view the full analysis from the report here: SKX Ratings Report