Head-To-Head Survey: Michael Kors (KORS) versus Skechers USA (SKX)

Michael Kors (NYSE: KORS) and Skechers USA (NYSE:SKX) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Insider & Institutional Ownership

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85.5% of Michael Kors shares are held by institutional investors. Comparatively, 73.1% of Skechers USA shares are held by institutional investors. 6.0% of Michael Kors shares are held by company insiders. Comparatively, 21.7% of Skechers USA shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Michael Kors and Skechers USA’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Michael Kors $4.49 billion 2.07 $552.50 million $3.37 18.15
Skechers USA $4.16 billion 1.46 $179.19 million $1.14 33.37

Michael Kors has higher revenue and earnings than Skechers USA. Michael Kors is trading at a lower price-to-earnings ratio than Skechers USA, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Michael Kors has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500. Comparatively, Skechers USA has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Profitability

This table compares Michael Kors and Skechers USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michael Kors 11.32% 40.86% 24.94%
Skechers USA 4.30% 14.63% 10.69%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Michael Kors and Skechers USA, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michael Kors 1 15 12 0 2.39
Skechers USA 1 2 9 0 2.67

Michael Kors currently has a consensus price target of $64.54, indicating a potential upside of 5.54%. Skechers USA has a consensus price target of $41.10, indicating a potential upside of 8.04%. Given Skechers USA’s stronger consensus rating and higher probable upside, analysts clearly believe Skechers USA is more favorable than Michael Kors.

Summary

Michael Kors beats Skechers USA on 9 of the 14 factors compared between the two stocks.

About Michael Kors

Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.

About Skechers USA

Skechers U.S.A., Inc. is a designer and marketer of Skechers-branded lifestyle footwear for men, women and children, and performance footwear for men and women under the Skechers GO brand name. The Company operates through three segments: domestic wholesale sales, international wholesale sales, and retail sales, which includes e-commerce sales. Its lifestyle brands include Skechers USA, Skechers Sport, Skechers Active and Skechers Sport Active, Skechers Originals, BOBS from Skechers and Mark Nason. Its Performance Brands include Skechers Performance, Skechers Kids and Skechers Work. Its footwear is sold through a range of department stores and specialty retail stores and mid-tier retailers, boutiques, among others. As of February 1, 2017, the Company owned and operated 117 concept stores, 163 factory outlet stores and 134 warehouse outlet stores in the United States, and 101 concept stores, 51 factory outlet stores, and five warehouse outlet stores internationally.

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