In what appears to be one of ICR’s big news names today there is actually little by way of change to note here. Taking into account yesterday’s head fake, the stock is up a more pedestrian 5% prior to Tuesday’s preannouncement. That’s not to diminish the 30%+ top-line growth management announced for Q4, but it is worth noting.
As I sit here in the presentation, here are a few highlights from the earlier breakout:
- DC transition progressing - with the company expecting to break ground in March, the timing of the transition in 2H of F10 or 1Q of F11 unchanged
- Backlogs remain strong with men’s up vs. ’08, but still below ’07 levels
- Men’s Shape-Up sales beginning to take hold now roughly 15%-20% of women’s domestic sales
- Expect to see low single-digit increase in G&A in F10 (most leverageable line in the model)
- Shape-Ups hasn’t necessarily resulted in new channels of distribution or retail relationships, but it’s enabling SKX to gain significant penetration in key players (i.e. Foot Locker, FINL, DKS, TSA, etc.)
- When asked if we’re going to see them during the Super Bowl, I got a smile - not a definitive ‘no,’ but my sense is the company is happy with their exposure during the College Bowls over the last few weeks
