Even though the footwear design and development is done in-house, it’s worth noting the entire footwear range is manufactured in factories located in China and Vietnam by contractors. The brewing trade war between China and the US could play spoilsport to the growth of Skechers.
With China being the largest exporter of footwear to the US which was worth $14 billion last year, many companies are keeping a close tab on the ongoing development between the US and its trading partners. With no signs of trade wars getting over, the list of goods which fall under the tariffs levied by both the countries could grow. If footwear also comes under the list, Skechers and its peers would be on tenterhooks.
Skechers forecasts its third-quarter sales to come in the range of $1.200 billion to $1.225 billion and earnings to be between $0.50 and $0.55 per share, far below the analyst consensus. The footwear giant’s stock is down more than 12% in 2018, even though it rose 17% in the last 12 months.