Analyst says Skechers USA unlikely to raise outlook due to eurozone hurdles – Skechers USA (NYSE:SKX)

wedbush Analyst Tom Nikic reiterated his Outperform rating on the stock. Skechers USA Inc (NYSE:SKX) price target is $68.

Nike Co., Ltd. (NYSE:NKE) and Levi Strauss & Company (NYSE:LEVI) recently released its February quarter results, and both analysts noted that trends in EMEA continue to worsen.

Europe is a significant part of SKX's business, accounting for more than 20% of sales, and although management counts Europe in its conservative guidance, macro challenges in Europe mean The upside to the quarter and guidance is likely to be limited, analysts said.

According to the analyst, the first half of 2023 was a very strong period for U.S. DTC, with strong demand trends, especially among new slip-in innovations.

Analysts expect the trend to slow in the second half of 2023, further normalizing to mid-single-digit growth in the first quarter and the rest of the year.

Based on the strength of the US dollar since SKX announced its Q4 results, analysts estimate net EPS headwinds of $0.10 to $0.15.

While the short-term story looks difficult, compelling points to remain bullish include a strong product innovation and marketing engine, momentum in Asia, which is larger for SKX than Europe, and a recovery in the U.S. wholesale channel. possibilities, and a strong balance. sheet.

Given the more challenging macro environment, analysts estimate that a repeat of the guidance is the most likely scenario.

price action:SKX stock is trading 0.33% lower at $56.67 at last check on Friday.

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