This earnings season has been very good for Kellogg Co. (K) & Skechers U.S.A (SKX). Both companies delighted their shareholders with better than expected results.
For Kellogg Co. (K) it was a case of strong fourth quarter earnings, the company reporting net income of $428M or $1.23 earnings per share. The earnings with allowances made for non-recurring gains was 96 cents, level with the consensus estimate set by analysts. The income comes from revenue of $3.21B. This beat analysts’ expectations who by and large all said that they expected Kellogg to post revenue of $3.11B. The strong numbers were supported by yearly numbers equally as strong. For the year Kellog posted a profit of $1.27B or $3.62 per share.
The revenue recorded for the year at Kellog was $12.92B. In trading on Thursday, February 8, 2018, Kellog saw its shares rise $1.77 or 2.76% to close at $65.98. The company was coming off a previous close of $64.21 and opened the day’s trading at $64.59. Kellog still has some ways to go before it can top its best trading levels over the last 12 months. The current 12-month high is a whopping $76.69, more than $10 above the current level. Strong earnings only managed to move the needle 2.76% so many investors will be looking for something significant in order to send the shares higher. Interestingly the one-year target esti9mate is $71.10.
Skechers U.S.A (SKX) had one of its strongest fourth quarters in a while, reporting revenue of $970.6M or 21 cents per share. The adjusted earnings of 21 cents beat the consensus estimate of 13 cents and the shoe maker actually a strong gross profit for the quarter of $454.1M.
But the biggest surprise for SKX came in the revenue column. The consensus estimate for revenue was $879.07M. By reporting the actual revenue of $970.6M, SKX beat analysts’ expectation in a sound way. The strong revenue represents a 27% year over year growth. Global retail sales also saw an uptick with SKX reporting an increase in this category of 25.8%. The gross margin for the fourth quarter was 46.8%. The strong Q4 performance has set the stage for potentially stronger 1st quarter in 2018. SKX has projected sales between $1.175B and $1.2B for the Q1 2018; the company has also projected diluted EPS of 70 to 75 cents..
Both companies have managed to dodge the tumble that has engulfed the markets, which is a good thing as it means strong earnings and stronger fundamentals are good things to have in a market downturn.