On the flip-side, Crocs’ multiple appears high, keeping in mind the fact that the company’s revenues and margins are at a higher risk compared to Skechers’. However, we believe Skechers’ multiple is appropriate at its current level. There is little to separate the two, as both companies have witnessed a similar contraction of the multiple. Skechers’ P/E based on 2019 earnings has declined from 19x in 2019 to 16x currently, while Crocs’ multiple has contracted from 25x to about 21x. A larger retail footprint will help Skechers achieve faster growth once the things return to normal as the outbreak of virus subsides. On the other hand, Crocs primarily offers footwear products and accessories.įinally, Skechers has a larger retail footprint with the company operating more than 1,150 stores as of 2019 while Crocs’ store count stood at less than 370. Moreover, Skechers has a stronger balance sheet, with the company having a comfortable $1.2 billion in cash reserves as per the latest report, while Crocs’ cash reserves stood at a mere $100 million.Īdditionally, Skechers has a wider product portfolio, which ranges from footwear and apparel to eyewear and accessories. Skechers derives roughly 40% of its revenues from North America, while Crocs makes more than 50% of its sales from the region. Crocs? ’ wherein we compare trends in key metrics for the two apparel companies over the years to determine their relative valuations under the current circumstances. Our conclusion is based on our detailed dashboard analysis, ‘Is Skechers U.S.A. However, we believe Skechers has the edge over Crocs and is likely to fare better over the coming months because of its stronger brand presence (geographical diversification), robust digital network, and a diversified business model as compared to Crocs. ![]() Moreover, fading consumer demand, reduced discretionary spending, and stay-at-home orders resulting in store remaining closed continue to take their toll on the apparel industry. ![]() The lockdown in various parts of the world has hurt the apparel industry worldwide, with more weakness to come over the coming months. Skechers’ stock (NYSE: SKX) has remained flat since early February after the WHO declared the Coronavirus a global health emergency, while Crocs’ stock (NASDAQ: CROX) hasn’t done too bad either with a decline in value of just around 5%.
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