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.
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.
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.
any thoghts on RETL
I have never thought chasing retail trends was a good strategy.
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.
Well to me that’s reasonable. All it takes is a youth trend and companies can freak out like that.
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.
still on fire
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.
Reminds me of Tommy Hilfiger mid 90’s