Skechers U.S.A., Inc. SKX stands out as a compelling value play within the Zacks Shoes and Retail Apparel industry. It is trading at a forward 12-month price-to-sales ratio of 0.76, down from the industry and the Consumer Discretionary sector’s average of 1.52 and 1.68, respectively. This undervaluation highlights its potential for investors seeking attractive entry points. Moreover, Skechers’ Value Score of A underscores its value appeal. In the past month, the SKX stock has lost 9.1%. However, the stock has comfortably outperformed the industry’s 25.9% decline.
SKX Looks Attractive From a Valuation Standpoint
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Skechers’ Strategic Expansion & Innovation
Skechers continues to thrive on its diversified portfolio that spans fashion, athletic, non-athletic and work footwear. This multi-brand strategy enables the company to launch new products without cannibalizing existing offerings and to appeal to a broad demographic. In line with consumers’ shift toward a more relaxed lifestyle, Skechers has ramped up its focus on comfort-based footwear and apparel, blending style with all-day ease.
To support its growth, Skechers is making significant infrastructure investments globally, especially in retail stores, e-commerce platforms and distribution centers. These efforts are aligned with its strategic priorities, expanding omnichannel capabilities, growing the Direct-to-Consumer (“DTC”) business and enhancing the global brand presence.
Skechers’ wholesale business remains a strong growth engine. In the fourth quarter of 2024, the segment recorded a 17.5% year-over-year increase in sales, reaching $1.13 billion. This growth was fueled by a 31.2% surge in domestic sales and a 10.4% rise internationally. The impressive performance highlights strong demand for Skechers’ comfort technologies across men’s, women’s and children’s categories.
The DTC segment also delivered solid performance, reflecting Skechers’ push for direct consumer engagement and improved shopping experiences. In the fourth quarter, DTC sales rose 8.4% year over year to $1.08 billion. Both in-store and e-commerce platforms showed strong traction, especially during the holiday season. International DTC sales climbed 9.3%, while domestic DTC rose 6.8%, underscoring the effectiveness of the company’s marketing and product innovation.
SKX Gains on International Operations & Store Expansion
International operations continue to be a key growth driver. In the fourth quarter, international sales rose 9.8% year over year. Europe, the Middle East and Africa led with a 24.8% increase, while Asia-Pacific (“APAC”) sales grew 3.3%, excluding China. APAC posted a 26% jump, with India showing particularly strong growth. Skechers’ ability to tailor strategies to local markets and trends has helped it excel globally.
Store expansion remains central to its strategy. By the end of the fourth quarter, Skechers operated 5,296 branded stores globally, including 1,787 company-owned locations. New markets such as the Philippines and Prague have been added, with plans to open 180-200 stores in 2025. This global footprint underscores Skechers’ evolving identity as a tech-savvy, consumer-first and internationally-driven brand.
SKX Stock Past-Month Performance
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SKX’s Optimistic FY25 Outlook
Looking ahead, Skechers plans to accelerate DTC and international growth by investing in store expansion and omni-channel enhancements. For 2025, the company plans to invest $600-$700 million in capital expenditures, mostly for the U.S. and China distribution networks.
Skechers’ management projects revenues in the range of $9.70 billion to $9.80 billion in 2025, reflecting an increase from $8.97 billion achieved in 2024. Earnings per share (EPS) are anticipated to fall between $4.30 and $4.50 compared with $4.16 in the previous year. In the first quarter of 2025, the company expects to generate sales between $2.40 billion and $2.43 billion, with EPS projected to range from $1.10 to $1.15.
Challenges in China & Currency Headwinds of Skechers
Skechers experienced an 11.5% year-over-year sales decline in China, dropping to $333.5 million. This dip was caused by ongoing macroeconomic challenges and reduced consumer spending. As China is a critical market for Skechers' global growth strategy, the shortfall raises concerns about its near-term recovery. Management has set cautious expectations for upcoming periods, reflecting limited optimism for a quick turnaround.
Skechers’ global footprint leaves it to currency fluctuations. In the fourth quarter, foreign exchange (“FX”) negatively impacted earnings by 21 cents per share, with total FX-related losses reaching $34.7 million. Looking ahead to 2025, the company anticipates a 200-basis-point drag on organic sales from FX, potentially reducing revenues by around $200 million. Continued dollar strength could further pressure Skechers’ both top and bottom lines.
Final Thoughts on SKX
Investors may find Skechers stock due to its consistent performance across core business segments and strategic global expansion efforts. The company continues to deliver growth in wholesale and DTC channels, supported by comfort-driven product innovations and enhanced digital and retail capabilities. Skechers’ international footprint, particularly in high-growth markets, combined with ongoing store expansion, positions it well for long-term growth. Although recent challenges in China and currency fluctuations present near-term risks, Skechers’ adaptability, operational efficiency and focus on consumer trends reinforce confidence in its performance. The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks are The Gap, Inc. GAP, Stitch Fix SFIX and Deckers Outdoor Corporation DECK.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.6%, respectively, from fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Stitch Fix’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Deckers’ fiscal 2025 earnings and revenues implies growth of 21% and 15.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.
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