Is The Second Largest Brand Of American Sports Shoes Skechers Gone?

In July 21st, according to Cage The latest report shows that the company's 2016 fiscal year second quarter profit of $74 million 107 thousand, down 7.11% compared to the same period, diluted earnings per share of 48 cents, less than Wall Street analysts forecast earnings per share 51 cents. The next day, Cage slumped 22.34% on a single day, down to a record low of 24.99!

(1) Cage, a "sitting young man"

Skech (Skechers USA) comes from southern California slang, meaning "sitting young people", representing the pursuit. fashion A young group with a distinctive personality. At present, Skech designs, develops and sells more than 3000 styles of men's shoes. Women's Shoes Children's shoes and several other brand products to meet the needs of people of different ages and regions. Now it has become a predator in the footwear brand with sports function and casual footwear as its core. It is also one of the most popular footwear brands in the world. In 2015, it was awarded the 2015 PLUS Award (excellent design and sales) by FOOTWEAR PUS magazine.

In 1.2016 years, it became the second largest sports shoe company in the United States.

Skech US company's total revenue in fiscal year 2015 was US $3 billion 150 million (about 20 billion 660 million yuan), an increase of 32% over the same period last year. In the first three months of 2016, the market share of Skech in the American sports shoes market was 5%, which was 4.6% of Adidas's 4.6%, becoming the second largest sports shoe company in the US after Nike, according to the retail market.

*Source:Bloomberg

2. actively expand overseas and vigorously lay the global market.

If a few years ago, Chinese consumers may be familiar with Nike, Adidas and other international brands, but they don't know much about Cage. In the past two years, Cage's leisure sports shoes have been spread all over China's streets and alleys. As David Weinberg, head of Cage's company, said, "the growth of overseas sales means that our products are getting more and more accepted worldwide."

Since 2013, Cage has stepped up its efforts to expand its international market, set up branches in Japan and Brazil, established a joint venture in China, and gradually established an overseas distributor system. Since the establishment of Cage's overseas marketing channels, overseas sales have increased significantly. In 2015, the proportion of revenue from overseas has reached 37.1%, an increase of 20.2% over the same period last year. In 2015, Skech's number of overseas stores increased to 127, accounting for 24.6% of the total number of stores, an increase of 24.6% over the same period last year.

3. gorgeous list of top 15 institutional investors

According to Bloomberg's latest statistics, Cage's latest list of top 15 institutional investors, including FMR LLC, Vanguard, BlackRock, Morgan Stanley and so on, has recently been released. And most of the institutions chose to increase Cage's stock at that time, so they are very optimistic about the future development of Cage.

Here is a brief introduction to the largest investment Institutional Firms with a share of 14.75%. FMR LLC FMR is the abbreviation of Fidelity Management and Research. The Chinese name is Fidelity International Investment. It is one of the largest financial services and mutual fund companies in the United States and manages assets of over US $2 trillion. The main business includes mutual funds and pensions. It is one of Apple's largest shareholders and one of Google's investors.

(two) what causes Cage's collapse?

Why did the shoe giant Cage, a company with outstanding performance and market share expand year by year, suddenly lose its earnings? Earnings per share were lower than Wall Street's expected earnings, resulting in a sharp fall in share prices, mainly for the following reasons:

1. domestic footwear sales growth trend continues to slow down

Skech optimizes the product line and constantly designs casual sports shoes for young people. Since 2013, the company's income has doubled to 101.7%, while overseas market revenue has increased to 161.5%, which is a major source of revenue growth. But this year, though Skech is strong and thriving in overseas markets, the United States remains the main battleground of the company. In recent years, the growth rate of sales in the US market has been slowing down, resulting in Skech's huge pressure on orders and sales. Bloomberg analysts expect Skech sales to grow by only 19% in 2016.

2. the US footwear unit price has dropped too much, and shoe Brand Company profits are facing pressure.

American consumers are still keen on leisure sports shoes, especially for sports shoes, but because of the decline in unit price of footwear products, sales growth of footwear products may slow down. According to the Bureau of labor statistics, sales of footwear in the US are expected to reach US $69 billion in 2016, down by US $800 million compared to the same period last year. Due to the arrival of the peak season of holiday shopping and the increase of inventory caused by weaker retailer flow, the profits of footwear brands and retailers are facing enormous pressure. This year, Sports Authority, the US sporting goods retailer, is about to close all its 460 stores, which has made a great impact on Skech, who sells products in the shop.

(three) nearly 39.7% of the rising space is a good time to collect the bottom.

The main reason for the stock price slump was Cage's quarterly earnings and earnings per share lower than analysts' expectations, which led to investor panic and oversold stocks, dropping 22.34% on a single day. It is clear that Cage's recent performance has been affected by the domestic market downturn, but I believe that with the help of overseas market sales growth, there will still be more than 15% growth in the future.

According to the latest rating report provided by institutional investors in July 22nd, most agencies rated their holdings and buy ratings, and the target price was significantly higher than the current price, indicating that most analysts were optimistic about Cage's future performance. According to Bloomberg's latest statistics, the total target price of Cage stock is 34, which is nearly 39.7% higher than the current price of 24.33.

Then some people may ask: since there is such a big increase in space, is it a good time to bargain? In fact, from the example of Skech, we can see that the announcement of the company's earnings and whether it can reach analysts' expectations has a greater impact on the stock price, and can cause the stock to go up and down, so the risk of single stock investment is higher. In addition, the continued slowdown in the growth trend of the domestic footwear sales and the weakening of the valuation advantage have brought many uncertainties to the future development of Cage. Therefore, the risk of individual stock investment is large, and it is suggested that investors' portfolio investment in American stocks should be diversified and more conducive to reducing risks.