Factors likely to decide the fate of Skechers (SKX) in Q4 earnings
Skechers USA, Inc. SKX is expected to post revenue and earnings growth when it reports fourth quarter 2021 results on February 3, after the closing bell. Zacks’ consensus estimate for revenue is pegged at $1,534 million, indicating growth of 15.8% over the reported figure for the prior year quarter.
Zacks’ consensus estimate for fourth-quarter earnings per share currently stands at 32 cents, suggesting a 33.3% improvement over the count for the year-ago period. However, we note that the consensus mark is down a penny in the past 30 days.
For 2021, the revenue consensus mark is set at $6.18 billion, implying 34.4% growth over last year’s actual numbers. Additionally, Zacks’ consensus estimate for 2021 earnings per share is pegged at $2.48, indicating a 287.5% increase over the prior year period.
This designer, developer, marketer and marketer of lifestyle and performance footwear has a trailing four-quarter earnings surprise of 18.7%, on average.
Key Factors to Note
Skechers’ focus on a new product line, store renovation plans, careful inventory management and momentum in the direct-to-consumer business likely contributed to SKX’s performance in the fourth quarter. Management has been directing its resources for some time to improve digital capabilities, including increasing website functionality and mobile apps. Initiatives such as “Buy Online, Pick Up In Store” and “Buy Online, Pick Up Curbside” are worth mentioning.
Skechers’ international business remains an important sales driver. Management continues to expand SKX’s global reach in the footwear market through distribution networks, subsidiaries and joint ventures. Strong wholesale and direct-to-consumer businesses thanks to the easing of pandemic-related restrictions have helped the business for some time.
In its last earnings call, management expected sales of between $1.51 billion and $1.56 billion and earnings in the range of 28 to 33 cents per share for the quarter under review. Skechers forecast 2021 sales of $6.15 billion to $6.20 billion and earnings per share of $2.45 to $2.50.
While the aforementioned factors give cause for optimism, we cannot ignore global supply chain issues and port congestions. Additionally, any deleveraging of G&A and operating expenses could have been a deterrent. Any increases in labor costs as well as warehousing and distribution expenses could have weighed on margins in the quarter to report.
What the Zacks Model Reveals
Our proven model predicts an earnings beat for Skechers this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.
Skechers USA, Inc. Price and EPS Surprise
Skechers USA, Inc. price-eps-surprise | Quote from Skechers USA, Inc.
Skechers has an ESP on Earnings of +1.05% and a #2 Zacks rank at present.
More stocks set to beat earnings estimates
Here are a few other companies worth considering, as our model shows they have the right combination of elements to beat on earnings this season:
Macy’s M currently has an Earnings ESP of +7.71% and a Zacks Rank of 1. M will likely see improved earnings when it releases Q4 FY2021 numbers. The consensus estimate of Zacks for quarterly earnings per share of $1.97 suggests a substantial improvement from the 80 cents reported in the year-ago quarter. You can see the full list of today’s Zacks #1 Rank stocks here.
Macy’s revenue is expected to increase from the figure reported a year ago. Zacks’ consensus estimate for quarterly revenue is pegged at $8.44 billion, indicating a 24.5% improvement over the figure reported in the year-ago quarter. M has a surprise on earnings for the last four quarters of 313.5% on average.
Gildan Sportswear GIL currently has a +9.57% Earnings ESP and a Zacks Rank of 2 at present. GIL will likely see an increase in net income when it releases fourth quarter 2021 numbers. Zacks’ consensus estimate for quarterly earnings per share of 58 cents suggests a 29% increase from the number reported a year ago. a year.
Gildan Activewear revenue is expected to increase from the number reported in the prior year quarter. Zacks’ consensus estimate for quarterly revenue is pegged at $731 million, suggesting 5.9% growth from the year-ago quarter tally. GIL has an earnings surprise for the last four quarters of 85%, on average.
Quoted COTY currently has an Earnings ESP of +37.14% and a Zacks rank of #3. Zacks consensus for Coty’s quarterly revenue is set at $1.6 billion, indicating a 13.3% improvement over the figure reported in the year-ago quarter.
Zacks’ consensus estimate for Coty’s bottom line has been flat for the past seven days at 12 cents a share. However, the consensus earnings estimate suggests a decline of 29.4% from the figure published a year ago. COTY has posted a 66.4% profit beat, on average, over the past four quarters.
Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.
Zacks names ‘only one best choice for doubling up’
From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.
As one investor put it, “curing and preventing hundreds of diseases…what should this market be worth?” This company could rival or surpass other recent Zacks stocks that are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in a year.
Free: See our best stock and our 4 finalists >>
Click to get this free report
Macy’s, Inc. (M): Free Stock Analysis Report
Skechers USA, Inc. (SKX): Free Stock Analysis Report
Gildan Activewear, Inc. (GIL): Free Inventory Analysis Report
Coty (COTY): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.