somrh (91.31)

Skechers' Marketing and Inventory

December 19, 2011 – Comments (2) | RELATED TICKERS: SKX

I've always like Skechers' shoes and I'm a pretty regular customer of their products. But I have to question their email marketing. At one point I purchased shoes through their website and subscribed to their emails for free shipping (what can I say, I'm cheap). Since then they have sent regular emails, several a week. In fact, I received an email yesterday and today. How many emails do I really need?

I have a hard time believing this is a solid marketing campaign. An occassional email from a company for products you like is OK. But I really don't need a new pair of shoes 4 times a week. Needless to say I unsubscribed from their emails. I can't imagine anyone reading all those damned things. 

That said, SKX's DSI number seems to be much lower. Their revenue per pair for the last 9 months has been $20.16 versus $24.81. So there has been some price cuts to clear out that inventory. So perhaps I'm mistaken about their marketing campaign.

Is the worst over? Is Skechers a good buy now? The company still sells at about 2/3 book value. While earnings expectations aren't too high, SKX is trading at about 11 times 10 year average earnings.The tough macro environment might make it difficult for the time being but it might be a reasonable time to buy. Any thoughts?

Disclosure: No position in SKX at the time of this writing.