Kimberly-Clark’s Defensive Advantage
Kimberly-Clark (KMB) has established itself as a stalwart in the consumer staples sector, where demand remains steady amid economic fluctuations. The company, sporting a Zacks Rank #2 (Buy), has seen a notable increase in earnings expectations for the current fiscal year following a recent uptick in guidance.
Strategic cost management has significantly bolstered Kimberly-Clark’s profitability, evident in its 20% year-over-year rise in adjusted EPS to $1.96 for the latest quarter. Margin expansion has been a key factor in keeping investors content, as illustrated by the chart below.
Image Source: Zacks Investment Research
Deckers Outdoor and Its Brand Momentum
Deckers Outdoor (DECK) continues to ride the wave of brand success, particularly with UGG and Hoka shoes leading the charge in its recent stellar performance. The company has raised its outlook for the current fiscal year, backed by sustained brand momentum.
Analysts have adjusted their forecasts accordingly, with the Zacks Consensus EPS estimate of $31.52 pointing towards an 8% year-over-year growth. Deckers Outdoor has also witnessed consistent margin expansion, reflected in its gross margin surge to 56.9% from 51.3% in the comparable period last year.
Image Source: Zacks Investment Research
Skechers: Navigating Record Sales
While Skechers (SKX) encountered a less favorable response to its latest quarterly release, reporting a 7% drop in EPS despite a 7% revenue surge, the company did achieve a record sales figure of $2.2 billion. Noteworthy is the impressive growth of 9.2% in its Direct-to-Consumer (DTC) sales.
Despite missing Zacks Consensus estimates, the DTC sales advancement reflects a healthy market presence for Skechers. Similar to Deckers Outdoor, Skechers has benefited from margin expansion, with lower freight and unit costs contributing to a gross margin improvement to 54.9%. Upward revisions for the current fiscal year outlook have boosted investor sentiment, with the stock holding a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In Conclusion
During the ongoing Q2 earnings season, Deckers Outdoor, Kimberly-Clark, and Skechers have demonstrated improved profitability through margin expansions. Despite varied market reactions, each company’s unique strengths have propelled them to navigate the financial landscape successfully.
