SKX

Water Cooler Investing
#1

I haven’t followed this stock but its earnings have growth dramatically. Anyone know how a shoe brand that has been around like 25 yrs can suddenly make a comeback? I haven’t followed the story at all so I was hoping someone that has can enlighten me.

#2

I looked at this as a short in January around $55 and thankfully passed. It’s really hard for a shoe manufacturer to sustain a substantial multiple of TBV. I think it was around 3x before and the stock has tripled since then. It’s just not possible for a shoe company to generate enough ROE or have a large enough moat to justify that multiple over a long time period. That said, SKX appeared to be going through a very successful product launch with rapidly growing LatAm sales. I passed on the short because it seemed like EPS might explode. In hindsight I should have bought some but I avoid stocks where there is no valuation margin of safety. Would have been a great long though apparently. The product has great reviews though and appears to be legit, but will be copied eventually. SKX will be an amazing short at some point.

#3

I’ve been meaning to look into it as a case study. I remember glancing at it a few months ago thinking wow that has been on a tear. Up another 15% today.

#4

any thoghts on RETL

#5

I have never thought chasing retail trends was a good strategy.

#6

I’m not considering going long. I’m basically puzzled b/c I don’t know how a shoe company could have their EPS grow as quickly as it did in what I thought was a mature shoe retailer like SKX.

#7

Well to me that’s reasonable. All it takes is a youth trend and companies can freak out like that.

#8

its like pogs. they were around since the early 1900s. then they exploded in the 1990s. i wouldn’t want to own any pog stocks now. maybe another 10-20 years they’ll have virtual pogs or something. pogs were sweet.

#9

still on fire

#10

They had a product cycle + large international rollout that has been successful. Considering it wasn’t much of a growth company before that, the comparisons were really easy, allowing them to blow out the numbers to the upside. Eventually the stock will likely “pull a CROX” and get smacked around hard but it’s a freight train until the inflection hits the numbers.

#11

Reminds me of Tommy Hilfiger mid 90’s