Share prices of Manhattan Beach-based footwear and apparel manufacturer Skechers U.S.A. Inc. have grown but not as quickly as some other shoe and clothing companies.
Abbie Zvejnieks, a research analyst with Piper Sandler & Co. based in New York City, wrote in a research report Feb. 2 that the firm was keeping a neutral rating on the company while raising the target price to $47.
Shares of the company’s stock closed at $44.34 on March 22.
“While we acknowledge that comfort at a reasonable price continues to resonate with consumers, we remain on the sidelines given likely unfavorable dynamics in U.S. wholesale and China in the (first half of the year),” Zvejnieks said in her report.
Raymond James & Associates Inc. analyst Rick B. Patel, however, gave Skechers shares an outperform, or a buy, rating in a research note from March 7.
Patel pointed out Skechers is investing in both China and India.
After a difficult second half of last year due to the country’s Covid policy, China appears to be gaining traction, Patel wrote in the report.
“Skechers continues to see China as an attractive long-term opportunity and is investing in its second distribution center in the region,” Patel said.
As for India, the company sees an opportunity there amid changes in population trends and a growing middle, he said.
“It’s planning owned and franchise stores, and its first distribution center is planned for later this year,” Patel wrote.
Despite challenges from temporary store closures in China and rising freight and logistic costs, Skechers still managed to hit record revenue last year.
David Weinberg, chief operating officer of Skechers, said that the shoemaker also experienced supply-chain disruptions.
“We overcame those challenges and achieved record annual sales due to the flexibility, creativity and dedication of the global Skechers organization, offices and distribution centers, our sales teams in the field and our retail associates throughout our global network of Skechers stores,” Weinberg said.
Compared to other footwear and apparel companies, Skechers is falling short in terms of its stock’s growth.
Deckers Outdoor Corp., based in Goleta, has increased its stock value by 11% since the start of the year, while Crocs Inc., based in Broomfield, Colorado, has jumped 8.5%. Steven Madden Ltd., based in Long Island City, New York, has risen 12% since Jan. 3, the first day of trading in the new year. By comparison, Skechers’ stock has increased 6% since Jan. 3.
