The Dicks Sporting Goods sss report up 5% bodes well for SKX. Other retailers also reporting strong sales, so Xmas looking promising.
The ‘end of toning’ thesis is being systematically dispelled by the Sportscan weekly reporting. Matt Powell’s Oct report showed toning was up 5x y/y and is still growing and will exceed $1 billion for 2010 with SKX at 56% share in Oct and Reebok 35%. Given the still rising y/y comps this could grow to a $1.5B business in 2011. Yes there will be seasonality issues, but now there is a history, buyers (and investors) will understand.
Famous Footwear.com are starting to show missing sizes in toning styles, so their inventory problem may be waning as holiday season sales ramp up.
The only heavy discounting out there now is Zappos with some year and a half old models at $64. They were the last to promote Shape-ups and were around $99 for most of the year so they were losing share to other retailers. They have faster fashion than Famous and want to make room for more of the new models. Interesting that the work shoe Shape-up is still at $99 to $105, it’s become a classic / basic with many repeat purchases by satisfied customers.
Zappos carries an incredible 782 Skechers styles.
SKX is much more than toning, Zappos carries three times as many Skechers kids styles as Shape-ups. Lights will be a huge gift item this Xmas along with Shape-ups for mom.
The inventory cloud over SKX will be lifted by a strong Xmas season and the Sportscan reporting. This is a $2B co. priced as a $1B co. Tiger Asset management invested $65million recently because they ‘get it’.
ICSC forecasts a strong November sales month, and expects the full-month Y/Y gain to come in at 4-5%
Costco share price spike on rumours of buyout. Follows BJ spike. All cash rich cos now in play for buyouts with cheap financing available.
Disclosure: long SKX
Disclosure: long skx