Consumer Discretionary
Cheap for a reason - this slow grower is about to grow even slower. Tom Chanos correctly predicted SKX would miss the bottom line and lower guidance (EPS was cut by 34%) following the release of its third quarter results. Management blamed the miss on issues that they had already accounted for in previous guidance (incl. FX & Covid headwinds), suggesting they are not telling investors the whole story. With several shoe companies facing bloated inventories (SKX inventory was up 45% Y/Y), Tom expects SKX will be forced to cut prices in the fourth quarter. 1-Yr TP $25 (30% downside).
Edition: 148
- 11 November, 2022