QUOTE AND NEWS
Reuters  Jul 10  Comment 
Sports shoe maker Skechers USA Inc said it filed a lawsuit against Fila U.S.A. Inc, claiming Fila Amazen Memory Moc shoes infringed patents related to its Go Walk line.
Motley Fool  Jul 6  Comment 
Why did investors flock to Hillshire Brands, Hanesbrands, and Skechers in the second quarter?
Motley Fool  Jun 24  Comment 
JAKKS Pacific's stock has been climbing back from a low point over the past few months. Is this a toy company built to survive the technological revolution?
Wall Street Journal  Jun 19  Comment 
Skechers USA filed a lawsuit claiming that Adidas's Reebok brand is selling footwear that infringes the patent on the its Skechers Go Walk products.
Forbes  Jun 12  Comment 
MAY 2014 Based on my analysis of the data from SportsOneSource, Sport Footwear Sales for May gained in the low singles. Basketball sales grew more than 25%, but in May, Basketball contribution is lower than in Q1, so the leverage was not...
Market Intelligence Center  Jun 6  Comment 
After Thursday’s trading in Skechers U.S.A. Inc (SKX) MarketIntelligenceCenter.com's option trade-picking algorithms uncovered a trade that offers a 7.78% or 21.20% (for comparison purposes only), while providing 8.94% downside protection. The...
TheStreet.com  Jun 5  Comment 
NEW YORK (Real Money) -- It's tough to come in and buy a stock that's up 40% for the year, especially one that's in the boom-bust business of apparel. It's doubly difficult to think about it today: One of the most consistent players in the apparel...
TheStreet.com  Jun 5  Comment 
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. NEW YORK (TheStreet) -- Here are some of the hot stocks Jim Cramer talked about on Wednesday's Mad Money on CNBC: PVH data by YCharts PVH...
SeekingAlpha  Jun 5  Comment 
By SA Editor Miriam Metzinger: Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday June 4. CEO Interview: Robert Greenberg and COO and CFO David Weinberg, Skechers (SKX). Other stock mentioned: Nike...
DailyFinance  Jun 4  Comment 
Skechers Performance Division announced today that seven-time PGA TOUR champion Matt Kuchar—currently ranked 5th in the world—will be the first brand ambassador and face of the Skechers GOgolf line. The multi-year...




 

Skechers USA (NYSE:SKX) is a footwear company based in Manhattan Beach, California. In addition to producing footwear under a number of Skechers brands such as Skechers Active and Skechers Cali, the company has eight separately marketed "fashion and street" brands targeted at different demographics. Skechers makes money by selling its products to department and specialty stores, sports retailers, and boutiques. However, the company also sells directly to consumers through its website and its own retail stores. These include: 70 concept stores, 72 factory outlets, and 35 warehouse outlets in the US, as well as 14 concept stores and 2 factory outlets internationally. The company earned $1.4 billion in revenue and $55 million in net income in 2009.[1]

Skechers has a stated focus on growing its company-owned retail business, and it increased its number of stores. By expanding its retail sales business, Skechers hopes to boost profit margins by bypassing traditional retailers and charging customers the full retail (as opposed to wholesale) price. If successful, this will also decrease the significance of Skecher's five largest customers, which account for 25% of all sales.[2]

Company Overview

Skechers USA makes money by selling its footwear to department stores and other retailers, or directly to the consumer via its website or in its own stores. The company produces footwear of all kinds for men, women, and children, though the company's core consumers are 12- to 24-year-olds. Skechers makes an effort to maintain a trendy and stylish brand image by using celebrity-driven advertising.[3]

Business Segments[4]

Skechers Lines

Skechers offers multiple branded product lines for men, women and children as well as other products sold under established names not associated with Skechers. Under this line is Skechers USA which offers all types of shoes ranging from casual to dress for men and women. Skechers Sport includes include running and jogging shoes. Skechers Active provide a fusion of sport and casual shoes for females. Skechers Kids provides shoes for infants, toddlers, boys, and girls. Skechers Line also includes Shape-Ups, Tone-Ups and Skechers Work products.

Fashion and Street Brands

The Fashion and Street brands are marketed individually and separately from Skechers. These brands include: Zoo York, Mark Nason, and Unltd by Marc Ecko. The reason they are marketed separately is because each of these brands has a distinct target audience. For example, Zoo York targets skateboarders and those who embrace skate fashion; SoHo Lab targets trend-conscious 18 to 34 year-olds.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net sales fell less than 1% to $1.4 billion. The company attributes the stagnant growth to the weak global economy.
  • Net income fell 1.2% to $55 million.

Trends and Forces

Skechers relies on a small group of customers for 25% of sales

Skechers' top five customers account for 25% of net sales.[2] These clients are not obligated to purchase products from Skechers, and the loss of one of them could significantly reduce the company's sales. The company's plans to expand its retail business will decrease its dependency on these customers and mitigate some of the risk they pose to sales. As Skechers gains more sales from its own stores, these five customers will become less important to the welfare of the company.

Certain investors hold the majority of the stock, which could affect issues put to a shareholder vote

Robert Greenberg (Chairman and CEO) and his family own almost 60% of class B common stock. Because class B stockholders are allowed 10 votes per share, Mr. Greenberg alone holds 28.1% of total votes. Including his family's voting power, he controls 46.7% of all votes.[5] Therefore, any issue that is put to vote will be significantly influenced by Mr. Greenberg, regardless of whether or not his views are in line with the rest of the shareholders.

Skechers, already with a strong presence outside the US, has a stated goal to continue expanding internationally

Skechers, which already operates in more than 100 countries, has grown revenue from its international wholesale business. The company will continue to expand internationally, in part to take advantage of rapid economic growth in certain parts of the world. For example, Skechers expanded its distribution network in China via a joint venture in 2008, which has generated between $10-$15 million more in revenue.[6]

Competition

Skechers produces a very wide range of footwear and that it does not compete with each of these companies in the same way. For example, Skechers competes with Wolverine World Wide (WWW) mainly in the casual and work footwear categories, but Wolverine does not make athletic footwear as Skechers does.

  • Nike (NKE): Nike competes with Skechers in the sports footwear market. Nike has a sizable advantage when it comes to economies of scale and financial resources.
  • Adidas AG (ADDYY): The adidas Group competes in the overall sporting goods market. It makes sports footwear, apparel, accessories, and equipment. Skechers competes with the adidas Group via the group's two brands adidas and Reebok. Like Nike, the adidas Group also has big advantages in economics of scale and financial resources.
  • Puma AG: Puma AG is a Germany-based competitor in the sporting goods market, designing and producing sports footwear, apparel, accessories, and equipment. It operates through two brands, Puma and Tretorn.
  • Wolverine World Wide (WWW): Wolverine World Wide is a maker of casual footwear, rugged footwear (outdoor and work), and a limited line of accessories. It operates through several brands including Wolverine, Patagonia, and Hush Puppies. The company also has tanning and pig-skin procurement operations.
  • Crocs (CROX): Crocs manufactures casual footwear for men, women, and children. In addition to operating in the US, Crocs sells its products in more than 90 countries worldwide. In addition to selling to domestic and international customers, the company also sells directly to the consumer via company-owned retail stores and its website. Crocs has diversified its product lines through company acquisitions.

References

  1. 1.0 1.1 SKX 2009 10-K "Selected Financial Data" pg. 25
  2. 2.0 2.1 SKX 2009 10-K pg. 17
  3. SKX 2009 10-K "General" pg. 2
  4. SKX 2009 10-K pg. 2-5
  5. SKX 2009 10-K pg. 21
  6. Yahoo! Finance, "Should You Buy It? Step Into Skechers"
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