Business Overview and Segments
This is a simple company – the parent company of Skechers. This company produces comfortable, affordable sports shoes. They have achieved the near-impossible since becoming a public company all the way back in 1999 – they have successfully competed against the titans in the space – Nike and Adidas. They did have a bit of luck – catching the greater social trend towards healthier lifestyles and increased exercise. They have managed to go from $1billion of sales in 2005, to $5billion of sales in 2019 – a 12% compounded growth rate for 15 years. Along the way they’ve done what every good growth company does – gradually transition towards profitability. Their free cash flow has increased every year – going from just $21m of free cash flow in 2012 to $460m in 2018. This was all done whilst expanding internationally – going from 20% of sales in 2008 to 55% of sales in 2019 – that involved a jump from $300million to $2.9billion. All-in-all, this company has pulled off every part of the perfect growth story – from continuous sales growth, to free cash flow growth, to international expansion.
Brand – consumers know that they are getting value for money with these shoes, which have also become a bit of a trend.
Key Facts and Figures
| Risk of Bankruptcy | Low |
| Last Year’s Growth | 12% (Moderate) |
| ROIC (Company Quality) | 15% (Moderate-High) |
| Free Cash Flow Margin (Company Strength) | 6.5% (Moderate) |
Key Facts