Skechers U.S.A., Inc.
A Skechy Investment
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Skechers U.S.A., Inc.
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Research Overview

INDEX:
S&P 500
Sector:
Consumer Discretionary
Position:
Short
Date:
Jul 19, 2022

After conducting a forensic financial and accounting review, Spruce Point believes Skechers U.S.A., Inc (NYSE: SKX), a “fast follower” known for offering comfortable shoes at a reasonable price, has long embodied many of the stereotypical attributes of a family-run company: nepotism, self-enrichment, rampant related party transactions, and remarkably poor corporate governance. Based on our investigation, we estimate 30% to 50% downside risk, or $18.60 - $26.00 per share.

The report highlights several key concerns with the company, including:

  • We believe that Skechers will likely experience a material revenue slowdown
  • The Company’s sales in China have significantly weakened and we believe its market position in Asia-Pacific is under threat We contend that Skechers will likely suffer another inventory episode
  • We believe Skechers’ management team and board have fostered poor corporate governance
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