Skechers USA Inc (SKX): New Products Bring Profits

Competition

Skechers faces stiff competition in the footwear industry. NIKE, Inc. (NYSE:NKE) is the largest in the group and has performed very well recently, with its stock reaching new all-time highs last week. NIKE, Inc. (NYSE:NKE)’s new Flyknit created a lot of excitement with consumers. They also advanced three of their most successful shoe franchises in history: Air Jordan, Air Force 1 family and the Air Max. Skechers is trying to push into these markets with its new performance division.

Deckers Outdoor Corp (NASDAQ:DECK) is making a turnaround as well after falling 75% in 2012 when its Uggs boot line fell out of fashion. Crocs, Inc. (NASDAQ:CROX) is still way below its all-time highs after its shoes fell out of fashion in 2008, but the company is attempting to recover and also has diversified its product line. Both Deckers Outdoor Corp (NASDAQ:DECK) and Crocs, Inc. (NASDAQ:CROX) represent an example of turnaround efforts, and can be looked as similar to the recent developments in Skechers. Deckers Outdoor Corp (NASDAQ:DECK) is looking to diversify geographically with increased expansion of its stores in China, which represents a huge market opportunity. Crocs, Inc. (NASDAQ:CROX) is trying to diversify its product mix and bring in all-year growth with products for all seasons.

Bottom Line

Skechers USA Inc (NYSE:SKX) is a compelling turnaround story in the making. It diversified its product line, and is no more dependent on a sole product category like it was prior to its fall in 2011. Revenue and earnings growth are on track, and are expected to continue to grow. If they continue to deliver the growth, the share price is bound to benefit.

The article New Products Bring Profits for Skechers originally appeared on Fool.com and is written by Dusan Jovanic.

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