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Skechers Hits The Ground, Down 28%

|Includes: Skechers USA Inc. (SKX)

Skechers (NYSE:SKX) traded 28% lower on Friday morning, catching investors by surprise, after lowering Q2 guidance to below that of Wall Street analysts.

Overall, SKX managed a decent earnings call, reporting earnings per share of $0.75 and revenue of $1.25 billion, compared to analyst expectations of $0.74 and $1.20 billion. For Q2 earnings, SKX provided guidance ranging between $0.38 and $0.43, compared to $0.55 expectations. For sales, the company provided the range of $1.12 and $1.14 billion, compared to $1.16 billion expected.

Frankly, this one caught us by surprise as well. Before today’s action, the market cycles and positive momentum in the weekly chart below suggested a rally to $46. But the relatively weak rising phase in its current cycle may have been a signal of risk ahead. The stock is currently trading just above $30, which is a support that could hold. However, clearly, anything is possible. The declining phase points to a low in June, and there are support levels around $30 and $24. With that much time left in this negative phase, the risks are still high.

Skechers (SKX) Stock Chart with Weekly Bars

For an introduction to cycle analysis, check out our Stock Market Cycles video, or watch the askSlim Market Week show every Friday on our YouTube channel.