The share price of Skechers U.S.A. Inc. was hurt by its most recent quarterly financial release. At least for a time.

The Manhattan Beach footwear manufacturer saw its stock price close at $46.78 on Oct. 26, the day it released its third quarter financials after the market closed, only to drop by 1.5% the following day and close at $46.10.

The overall stock market dropped by 1.1% in the same time period.

The stock performed much differently during its previous earning announcements.

On July 27 when Skechers announced its second quarter financials, its stock was at $51.11 and the following day closed up nearly 10% to $56.11 on the third highest trading volume of the last 52 weeks.

And on April 27, when Skechers released its first quarter earnings, the stock closed at $49.87 and then got a nearly 6.5% boost the next day when it closed at $53.19.

And why did it go up those two quarters but down the most recent one? Perhaps it is because those earnings reports were more positive than the third quarter’s, with net income coming in higher.

The stock. however, recovered fully and closed higher at $49.64 on Nov. 9.

Q3 earnings

Skechers beat Wall Street estimates on earnings but just narrowly missed on revenue for the third quarter.

The company reported on Oct. 26 net income of $145 million (93 cents a share) for the quarter ending Sept. 30, well up from the net income of $86 million (55 cents) in the same period a year earlier. Revenue increased by 8% from the third quarter of the prior year to $2.02 billion.

Analysts on average expected earnings of 79 cents on revenue of $2.03 billion, according to Refinitiv.

John Vandemore, chief financial officer of Skechers, in speaking with analysts about the third quarter results, attributed the revenue increase to a boost in direct-to-consumer sales, both domestically and overseas.

“This sustained momentum highlights the strength of the Skechers brand globally and the successful execution of our long-term growth strategy,” Vandemore said during the conference call.

Direct-to-consumer sales grew 24% year over year to $850 million, driven by increases of 33% internationally and 14% domestically, he continued. Skechers saw continued strong performance in its retail stores globally and meaningful outperformance on its international e-commerce platforms, he said.

“Consistent with what we are seeing across the industry, we experienced a slowdown in our domestic e-commerce channel as consumers shifted to our stores,” Vandemore added.

Abbie Zvejnieks, a senior research analyst with Piper Sandler & Co., said in a research note from Oct. 26 that Skechers was doing well financially. She maintained her previous overweight, or buy, rating on the stock and a price target of $59. 

“While macro uncertainties lie ahead, we think (fiscal year) guidance is conservative, and we feel confident in continued earnings growth in 2024 as U.S. wholesale recovers and innovation (like slip ins) drives demand,” Zvejnieks said in the note.

Zvejnieks explained the share price drop upon the release of the third quarter earnings this way:

“They trimmed the high end of the revenue guidance range, and they didn’t pass through the earnings beat in 3Q which lowered analysts 4Q estimates.”

Among its competitors, Skechers falls squarely in the middle of the pack when it comes to market capitalization, which was $7.6 billion as of Nov. 6. By comparison, Washington footwear giant Nike Inc. had a market cap of $160 billion, while Deckers Outdoor Corp. in Goleta had a market cap of $16 billion.

Crocs Inc., the footwear manufacturer in Broomfield, Colorado, had a market cap of $5.1 billion as of Nov. 6, while Steven Madden Ltd., a shoe distributor in Long Island City, New York that sells the brands Dolce Vita, Betsey Johnson and Anne Klein, among others, had a market cap of $2.6 billion.

In this year’s Business Journal list of largest local public companies ranked by market cap as of June 30, Skechers was No. 17 with a capitalization of $8.1 billion.