Last week's Sportscan data indicated Shape-ups weekly sales increased by over 40%, but there was no analyst commentary on this bounce since the BTS seasonal slow down. The stock was up in a down mkt yesterday, yet is down big today.
This stock is totally manipulated, witness the 30% short interest.
You can verify the Sportscan data by calling your broker. The data is proprietary and cannot be copied. It is purchased by all the retail companies and many brokerages and hedge funds. The report usually comes out Wednesdays. My source is one of the 5 analysts who cover SKX. I’ll get last weeks Shape-up trends this evening I hope. Keep in mind that weekly retail data is quite volatile, but Shape-up trends have improved for several weeks since the BTS low.
You can also validate this data by visiting stores and asking the right questions, as I do.
I understand that there are several hedge funds who:
a) Believe that toning is a fad which will soon fizzle.
b) SKX is facing a big inventory write down, due to high inventories of Shape-ups.
I disagree and have explained at length why on this board. That’s what makes a mkt. 4 of the 5 analysts agree with my thesis, based on frequent discussion with management and retail customers of SKX.
Frankly, you only have to look at the plethora of copy cat ‘rocker sole’ shoes in stores to understand that toning / comfort walking is a huge new category here to stay, led by SKX with their typically aggressive advertising and sponsorship programs.
I’ve explained why (in retail accounting terms) no material inventory write down is needed on shoes still selling well and holding their price (and incredible gross margin on a $15 ex factory cost shoe).
Management could help a lot by announcing a big buyback, endorsing the company prospects through thereby increasing the Greenberg family % ownership.
The stock will likely remain volatile until the conference call next week. (By the way, there is confusion on the date with Bloomberg and Factset who were indicating eps tonight, that’s nonsense and as I’ve consistently indicated, the eps and conference call will be Oct 27th). Maybe the 30% short interest is pushing the stock down today to create a cheaper short covering opportunity. I anticipate mgt will paint a very bullish outline of SKX prospects for next year.
As investors like Buffet have taught us, do your own deep research and develop a thesis. The biggest returns come from investing , based on your own research, when others are losing their heads and panicking, not from investing when all of the evidence is in. Keep in mind that SKX will have $8.80 per share of cash on Dec 31st!
And, people have lost sight of the fact that SKX, with $1.6B sales has become the number two footwear brand in America, after Nike, which has $8B of footwear sales.
Bye the way, Sketchersoe on the Yahoo Finance board forecasting sales off 87% for the quarter is laughable. The analyst consensus is for a 44% y/y increase for 3rd qtr, and keep in mind that they talk constantly to SKX management.