What Happened?
Shares of footwear company Skechers (NYSE:SKX) fell 14% in the afternoon session after the company reported weak fourth-quarter results. Its EPS missed significantly, and its EPS guidance for next quarter fell short of Wall Street's estimates. Also, growth was weak, as revenue was only roughly in line with expectations. The company noted ongoing challenges in China, a big consumer market. Overall, this was a softer quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Skechers? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Skechers’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Skechers and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 17.4% on the news that the company reported a rare 'beat and raise' quarter. Skechers blew past analysts' constant currency revenue expectations. Its operating margin also outperformed Wall Street's estimates. Looking forward to the full year, the company raised its revenue and EPS guidance for 2024, and both are comfortably ahead of analysts' expectations. Overall, this quarter's results seemed fairly positive, and shareholders should feel optimistic.
Skechers is down 2.8% since the beginning of the year, and at $65.43 per share, it is trading 16.4% below its 52-week high of $78.24 from January 2025. Investors who bought $1,000 worth of Skechers’s shares 5 years ago would now be looking at an investment worth $1,656.
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