Author Topic: pay a dividend. Nike trades at  (Read 159 times)


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pay a dividend. Nike trades at
« on: September 25, 2018, 11:07:26 PM »
Skechers is Nike Air Vapormax Femme the third largest athletic-footwear maker in the U.S. by annual revenue after Nike and adidas. Over half of its revenue came from the Nike Air Odyssey Femme U.S. and Canada last year, but it's been expanding (mainly through joint ventures) into other markets like China, South Korea, Japan, and Latin America.
Skechers' revenue rose 17% to $4.2 billion last year, supported by robust demand for its walking, work, casual-lifestyle, casual-dress, and athletic footwear in the U.S. New styles for children performed well during last year's holiday season, and its brand achieved "record sales" during Singles Day (Nov. 11) in China. Wall Street expects Skechers' sales to rise 14% this year.Skechers was widely considered a better growth play than Nike last year,  but its growth hit a brick wall this year. After beating estimates during Nike Roshe Run Homme the first quarter with 17% sales growth, Skechers warned that its sales would rise only 9% to 11% during the second quarter -- which would be its slowest growth in five quarters. Analysts had expected 13% growth.
Skechers also guided for flat to 13% earnings Nike Air Presto Damen growth for the quarter, which was well below expectations for 42% growth. Skechers attributed that abrupt slowdown to an "expected shift" of some shipments from the second quarter to the second half of the year, but investors fled and the stock plunged nearly 30% in a single day. However, analysts still expect Skechers' full-year earnings to rise 19%.
Meanwhile, Nike impressed investors last quarter by growing its North American market again. Sales in North America -- which had been tough due to tough competition and the bankruptcies of major footwear retailers -- rose 2.8% Nike Air Max 2017 Womens year over year, crushing estimates for 1% growth. Nike's gross margins are also rebounding as Skechers' are slipping -- but it's still too early to tell if this is a long-term trend.Nike's recovery, combined with its constant-currency sales growth of 25% in Greater China, 13% growth in Asia Pacific and Latin America, and 10% growth in the EMEA (Europe, Middle East, and Africa) region, lifted Nike's sales by 13% from the prior-year period last quarter -- Nike Air Max 90 Damen Pink marking its strongest growth in 14 quarters. Nike didn't provide precise guidance for the current quarter, but it boosted its full-year sales forecast from a mid-to-high-single-digit range to a high-single-digit rate.
Wall Street expects Nike's earnings to grow 11% this year. The company also announced a new $15 billion buyback program, which would be enough to repurchase 12% of its outstanding shares Nike Air Max 90 Femme Fleur at current pricesSkechers Nike Air VaporMax Dame currently trades at 15 times this year's earnings, and it doesn't pay a dividend. Nike trades at 29 times this year's earnings, but it pays a forward dividend yield of 1.1%.
It's tempting to consider Skechers "cheaper" than Nike at current levels, but its decelerating sales and earnings growth cast a dark cloud over its future. Nike is generating better growth and brushing off concerns about Adidas, but the stock's premium valuation isn't really justified -- especially when there are plenty of other cheaper stocks with better growth.
I don't plan to buy either stock, but I'd pick Nike over Skechers as a long-term investment. Skechers still has great growth potential, but the market can be brutal to companies that abruptly lose Nike Air Max 1 Mujer their momentum.