If you held Skechers (SKX) into its quarterly earnings report, which was delivered after the bell on Thursday, congratulations! It was truly a blowout report, like so many others. Wall Street, however, has chosen to reward SKX and its shareholders with the stock up more than 16% at last check. Here were the numbers:
- Revenues: $1.43 billion (actual) vs. $1.34 billion (estimate)
- EPS: $.63 (actual) vs. $.49 (estimate)
In addition to the blowout quarterly results, SKX hit the trifecta as it raised revenue and EPS guidance on a forward-looking basis.
That's the good news! (actually great news!)
SKX isn't without its obstacles, though, so let's first look at its seasonality chart for the past 20 years:
Over the past two decades, SKX averages gaining 18.5% during the first four months of the year. But over the last eight months of the year, it averages gaining just 5.3%. We're now within a week of the end of April, so if SKX is to make a huge gain during the balance of 2021, it'll have to do it into historical headwinds.
And then there's long-term price resistance, as evidenced by the 2015 price top:
While SKX definitely has its work cut out for it, I'd keep a very close eye on this chart. SKX is part of the footwear group ($DJUSFT), which is rapidly approaching key relative trendline support (relative to the S&P 500). If this trendline holds and footwear outperforms during the balance of 2021, a breakout in SKX above price resistance should absolutely be respected. While I follow seasonal patterns, they take a back seat to price action. A breakout to an all-time high on SKX would very likely lead to further strength in the weeks and months ahead.
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