5. Skechers USA, Inc. (NYSE:SKX)
No. of Hedge Funds as of Q2 2024: 45
Skechers (NYSE:SKX) designs, manufactures, and markets a wide range of apparel, footwear, and accessories for women, men, and children. It operates through two segments: Direct-to-Consumer and Wholesale. The Direct-to-Consumer segment encompasses product sales made directly by the company to consumers via a combination of channels. These include company-owned e-commerce sites, Skechers-branded stores, digital platforms, and third-party marketplaces.
The Wholesale segment covers sales to a network of partners. These include family shoe stores, specialty athletic and sporting goods retailers, Skechers-branded stores operated by licensees and third-party franchises, big box club stores, department stores, and distributors in particular international markets.
The company’s lifestyle offering manufactures and markets comfort technologies, including Skechers Ai-Cooled Memory Foam, Skechers Arch Fit, Skechers Hands-Free Slip-ins, and others. Sales in Q2 2024 grew by 7.2% to $2.16 billion as compared to last year, making a sales record for the period. This growth translates to an increase of $145 million. It also announced a new $1 billion share repurchase plan, significantly enhancing and replacing its current program. Skechers (NYSE:SKX) boasts a solid operation model, as it was able to drive growth by overruling hurdles such as supply chain disruptions affecting shipments to Europe, a price-driven 618 shopping event in China, and foreign currency headwinds.
Another key reason behind its growth is the strong global demand for the company’s innovative and comfortable products. These products resonated with customers of all ages and interests, driving growth in all segments and regions. The company partnered with industry technology leaders like Goodyear to further diversify and innovate its product offering, and announced a new partnership with John Deere along with a new Skechers football campaign with a team of athletes. It is driving purchase intent and brand awareness by increasing its global product offering. In addition, Skechers (NYSE:SKX) is also focusing on building efficiencies within our business to scale profitable growth.
45 hedge funds hold stakes in the stock, with Anomaly Capital Management holding the highest stake, worth $199.33 million, as of Q2 2024. It ranks fifth on our list of the 11 best fashion stocks to buy now.
Meridian Growth Fund made the following comment about Skechers U.S.A., Inc. (NYSE:SKX) in its Q4 2022 investor letter:
“Skechers U.S.A., Inc. (NYSE:SKX), designs and sells lifestyle and athletic footwear. It is the third-largest footwear company in the U.S. and has a strong and growing international presence. In our view, the market does not fully recognize the growth opportunity represented by Skechers’ international business. During the quarter, the company reported strong gains worldwide, led by a 48% increase in sales in the EMEA region and a 9% rise in the APAC region despite COVID-related slowdowns, as well as 16% growth in the Americas, powered by healthy demand in the U.S. and Canada. The company is still contending with some expense issues, primarily related to ongoing supply chain and distribution channel challenges, but investors are increasingly recognizing management’s success at managing through the issues and setting the company up for potentially strong cash flow growth in 2023. Amid the growing optimism, we maintained our position in the stock.”
