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Stock Alert: Skechers U.S.A. Inc. (SKX) Hits New 52-week High

Shares of footwear maker Skechers U.S.A. Inc. (SKX) hit a new 52-week high of $41.70 on December 12, and closed its Thursday's trading session at $41.64, up 89 cents or 2.18%. The company has nearly doubled sales to $4.64 billion in 2018 from $2.38 billion in 2014, while growing operating income to $438 miilion from $209 million, and expanding gross margins above 45%.

Why it may be a good idea to put SKX on your stock watchlist?

* Highly agile business model with the ability to quickly adapt products in response to changing trends

* Growing International wholesale business - recording 31% Compound Annual Sales Growth between 2014 and 2018

* Expanding direct-to-consumer foorprint with a store count exceeding 3000, in more than 170 countries - registering 18% Compound Annual Sales Growth between 2014 and 2018.

Recently, the company reported strong Q3 results reflecting comprehensive increase in sales and improved profitability.

Recent Quarterly Performance

The company's Q3 net income was $103.1 million or $0.67 per share versus $90.7 million or $0.58 per share last year. Adjusted earnings per share was $0.71 per share for the quarter.

Sales for the quarter amounted to $1.35 billion, 15.1% higher than the previous year's sales of $1.18 billion, driven by continued growth in its international business reflecting wholesale sales increases of 21.7% and direct-to-consumer sales growth of 22.3%.

Comparable same store sales grew 7.7%, including increases of 6.8% domestically and 9.9% internationally.

"Our extremely strong third quarter results reflect both the success of our product and the strength of our global execution capabilities," said John Vandemore, chief financial officer of Skechers. "This quarter's comprehensive increase in sales and improved profitability are a testament to the soundness of our strategy and a validation of the investments in global infrastructure we have made to drive that strategy. We will continue to invest in our business to grow our brand across the globe and to increase our direct-to-consumer reach."

Q4 Guidance

Citing continued growth in each of the company's three segments in the fourth quarter, and a full-year effective tax rate of between 17% and 19%, the company sees Q4 sales in the range of $1.225 billion - $1.250 billion, and earnings per share of $0.35 - $0.40.

In an effort to meet the growing demand, the company said it would invest in both of its logistics and inventory, with the strength of its international business as well as the growth of its direct-to-consumer channel—with more than 3,300 Skechers stores worldwide, of which 779 are Company-owned. "Based on feedback from recent meetings with our international partners and domestic accounts, as well as our incoming order rate, we believe the momentum will continue in the fourth quarter and into 2020."

Last month, SKECHERS closed a new $500 million, five-year, senior unsecured credit facility, replacing the $250 million asset-backed credit facility that Skechers entered into in 2015, which was due to expire in June 2020.

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