Skechers is a sponsor of the pickleball championships, a sport that will likely attract the attention of more athletic companies
One thing Skechers Inc. and the sport of pickleball have in common: Both extend their appeal to a wider audience.
Pickleball combines parts of badminton, table tennis and tennis, United States Pickleball Website explains, and can be played by a variety of ages and skill levels. According to Road Fifty, a media outlet focused on issues concerning state, county and municipal governments. (Some of these courts are funded by federal COVID assistance, Route Fifty says.)
“Pickleball is becoming a mainstream sport. It’s always wise for brands to respond to emerging trends,” Matt Powell, senior sports industry advisor for NPD Group, told MarketWatch in an email.
In addition to its sponsorship of the pickleball tournament, the company is also a sponsor of the Ladies Professional Golf Association’s Los Angeles Open. He’s also recruited a variety of spokespersons, from Willie Nelson, who was featured in a Skechers Super Bowl commercial, to Martha Stewart and former Rockette and celebrity trainer Amanda Kloots.
“This growing roster of well-known talent and athletes allows us to appeal to an ever-widening consumer base,” said David Weinberg, chief executive of Skechers, during the company’s first-quarter earnings call. this week, according to a FactSet transcript.
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Skechers reported first-quarter earnings and sales that beat expectations. Sales reached a record, surpassing $1.8 billion.
Skechers says it’s not just about meeting consumers’ active lifestyle needs, but a desire for comfort.
“Product and marketing investments continue to drive strong global demand for our comfortable and innovative product,” Weinberg said.
“We introduced several new comfort technology collections during the quarter that improved our fit and function offerings.”
According to NPD’s latest U.S. footwear sales report released Wednesday, U.S. sales revenue fell 3% during the period, but performance footwear outpaced the overall market. footwear, with revenues up slightly. Skechers performance shoes won more than a third.
“While brands have let some retailers down over the past few years, Skechers seems to have stepped into that void,” Powell said.
And reaching out to older buyers could also work for Skechers.
“While older customers are not consuming shoes to the same degree as younger customers, we are seeing good growth among older customers,” Powell wrote.
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UBS analysts say where Skechers was once seen as a ‘counterfeit value brand’, it’s now a brand with enough sales potential to hit the company’s $10 billion goal by 2026 and continue to be the third largest shoe brand in the world. The company’s current focus on convenience allows it to “sell products at higher prices, attract higher-income consumers and capture market share.”
UBS is pricing the Skechers stock buy with a price target of $67.
“The market is worried about macro risks and we agree that the macro outlook is not good for Softlines stocks,” the UBS analysts said. “However, we believe Skechers will generate strong near-term growth, which will allow it to outperform.”
Skechers shares have fallen 11.1% since the start of the year.
Wedbush has an outperform rating on Skechers shares and a price target of $48.
“Given the number of macroeconomic factors that could have potentially tripped up the business in the first quarter[…] we are very encouraged by the company’s ability to beat and raise,” the analysts said.
And Stifel values buying Skechers stock with a target price of $61.
“We see Skechers leveraging a speed-to-market advantage and a scale advantage to gain share in the global footwear market,” the analysts said.
“While investments in growth and currency pressure will dampen near-term operating margin expansion, we believe the business can achieve a normalized operating margin in the teen range at as the business evolves.”