Skechers Gets a Lift from Backlog
Shares of Skechers USA Inc. rose 20% on Tuesday after the maker of sneakers, boots and other shoes said its order backlog as of Dec. 31 had risen 82% from a year earlier.
The stock rose $3.69 to close at $22.25 in New York Stock Exchange trading.
Manhattan Beach-based Skechers shares had risen more than fivefold in the last year as its profit beat estimates and its sales climbed.
The backlog orders, which indicate orders five to six months out, relieved some concerns that investors might have about the company’s sales prospects this year, analysts said.
“Investors are starting to believe that the stock is not a fad,” said David Turner, an analyst at Ferris Baker Watts. “Wall Street was waiting for some signal that the sales trend could continue in 2001. The press release supports that.”
Casual-shoe makers in general have benefited in the last year from strong consumer demand. Skechers said orders by retailers, a measure of future sales, rose to $221.6 million as of Dec. 31, from $121.7 million a year earlier. Sales at stores open at least a year rose more than 20% in 2000, the company said in a statement distributed by Business Wire.
Sales climbed 55% to $503 million in the first nine months of 2000 compared with the year-earlier period. Skechers expected to increase sales to more than $600 million in 2000 from about $425 million a year earlier, President Michael Greenberg said in November.
The company was expected to earn 14 cents a share in the fourth quarter, $1.06 in 2000 and $1.31 in 2001, Turner estimated. He forecast sales to reach $145 million in the fourth quarter, $648 million in 2000 and $795 million this year. He said he is considering increasing his sales and profit forecasts.
Skechers spokeswoman Christine Greany and Chief Financial Officer David Weinberg weren’t available for comment.
Skechers was founded in 1992 by Robert Greenberg, who built L.A. Gear into a footwear giant that in 1990 was third only to Nike and Reebok. But subsequent losses of more than $140 million caused by a recession and shifting consumer tastes pushed Greenberg out of L.A. Gear.
By 1993, his Skechers venture was importing the clunky Doc Martens shoes into the U.S. Then Greenberg decided to go after the same teenage and young-adult market with his own brand, taking the company public in a $115-million offering in June 1999.
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Sprinting Shoe Stocks
Most casual-shoe makers’ stocks surged in 2000 as investors hunted for “value” stocks amid the technology sector’s crash, and as shoe sales in general remained strong. The sector is off to a strong start this year as well.
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Ticker Tues. close Pctg. change: Stock symbol and change 2000 YTD* Skechers USA SKX $22.25, +$3.69 +307% +44% Brown Shoe BWS 17.50, +1.00 -8 +35 Wolverine WW WWW 18.56, +0.94 +39 +22 Stride Rite SRR 7.75, +0.94 +8 +11 Vans VANS 18.50, +1.50 +38 +9 Timberland TBL 69.00, +2.19 +152 +3 Nike NKE 55.69, -0.75 +13 0 K-Swiss KSWS 24.00, +0.13 +35 -4 Reebok RBK 25.52, -0.58 +234 -7 S&P; 500 1,326.65, +8.33 -10 +1 Nasdaq composite 2,618.55, -7.95 -39 +6
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* Year-to-date
Sources: Bloomberg News, Times research
