Footwear firm Skechers (NYSE: SKX) stock jumped 9% after the bell as the company posted better-than-expected results. Third-quarter outlook also came in line with the estimates, which is a good sign for investors. The shoemaker believes the latter half of 2019 would be better backed by back-to-school and holiday season.
The company’s stock price has jumped about 52% this year and it touched a new 52-week high range in April. Due to the muted Q1 results, the stock price had plunged, but has recovered gradually and is back to the $35 mark.
Solid Headline Numbers
International sales retained its mojo in the second quarter, improving 19.8% while domestic segment grew modestly by 1.5%. Thanks to solid international performance, sales grew 10.9% surpassing street consensus. Earnings per share jumped 69% due to improving margins and tight control on expenses, beating estimates.
Analysts were expecting revenues of $1.22 billion, up 7.4% over last year and adjusted earnings of 34 cents compared to 29 cents in the prior-year period. On the flip side, Skechers last quarter provided Q2 outlook. Revenue was expected to be between $1.200-1.225 billion, and diluted EPS of $0.30-0.35.
Reviving Fortunes
Comp-store sales is one of the key metrics tracked by the street to gauge the performance in the retail industry. For the Q2 period, Skechers reported 4.9% growth in same-store sales backed by solid performance in all its segments. It reversed the past three quarters declining trend, which should give a huge relief for shareholders.
Commenting on the second quarter results, COO David Weinberg said: “Skechers’ record second quarter sales are a testament to the demand and strength for our brand and products. We experienced growth in every region, with the biggest dollar increases coming from India, the Middle East, and China, as well as in Mexico with the conversion of the business to a joint venture. As we look forward to the back-to-school and holiday selling seasons, we believe our momentum will continue worldwide.”
Bullish Outlook
Third quarter sales is expected to be in the range of $1.325-1.350 billion vs. $1.31 billion expected by the street. On the EPS front, the company’s guidance of $0.65 to $0.70 is in line with the 65 cents anticipated by analysts, which is at the low-end of the guidance provided by the firm.