XLY - Skechers: Jumping Forward With Top- And Bottom-Line Growth

2024-06-25 10:29:15 ET

Summary

• Consumer Discretionary stocks struggle against S&P 500, but there have been a few winners that have big earnings growth.
• Skechers is expected to post double-digit EPS gains in the years ahead as stock buybacks appear ongoing.
• With high free cash flow, and strong international and DTC revenue, I see fundamental strength with SKX.
• Ahead of earnings in July, I highlight key price levels to monitor.

Consumer Discretionary-sector stocks have struggled against the S&P 500 in the past year. The Consumer Discretionary Select Sector SPDR Fund ( XLY ) is up 11% in total return over the last 12 months, which is solid, but when compared to the SPX, the consumer ETF sports negative alpha of more than 12 percentage points. It’s been a tough go of it for many makers of goods as consumers focus on travel and other services. And we’ve seen volatility in shares such as Nike ( NKE ) and Lululemon ( LULU ). ...

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