Skechers shares fall as CFO issues warning on China outlook

(Bloomberg) — Shares of Skechers USA Inc . posted their worst daily performance since February after the footwear company’s chief financial officer told an industry conference that sales in China would be under pressure for the rest of the year.

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Shares fell 9.6% to close at $61.56 on Thursday, the lowest level since early August. Footwear peers, including Nike Inc. and Under Armor Inc., saw their shares fall briefly on the comments, then rebounded. The stock of competitor On Holding AG fell 2.4%.

“We certainly saw worse conditions in China than we expected for the second half of the year, so I would expect the end of the year to be more disappointing than we originally thought,” Skechers CFO John Vandemore said at the Conference for Wells Fargo consumers. “I think this is a market that’s still reforming post-Covid.”

China is a major market for global retailers, and concerns about the purchasing power of Chinese consumers have long been in the spotlight. The Asia Pacific region accounted for more than a quarter of Skechers’ sales in 2023, according to a filing.

Thursday’s drop put Skechers stock in negative territory for the year. Still, Wall Street is bullish on the company.

Wall Street analysts give Skechers 17 buy ratings and one hold, according to data compiled by Bloomberg. The average target price of around $81 is more than 30% higher than where the stock is currently trading.

–With help from Janet Freund.

(Updates stock movement at market close)

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