Skechers: In Fashion

Fashion footwear is hot, and the stock of sneaker-maker Skechers USA is kicking into high gear. Shares of this Manhattan Beach, Cal., company, which deals in casual and active footwear, are up 76% since October 2005, following a post-Katrina sales slump.

The company mainly sells its shoes to department and specialty retail stores, though it also owns 125 stores that peddle Skechers products exclusively. Profits reached $45 million in 2005, a whopping 90% increase from over 2004's net of $27 million. Sales rose 9%, to $1 billion, in 2005.

Skechers has been diligent in its quest to adapt to the changing tastes of its customers by consistently upgrading styles and designs. The company also recently launched three new designer, or "lifestyle," brands, which have seen healthy sales so far this year. Same-store sales -- sales at stores open at least a year -- rose steadily in 2005, with most of the growth occurring in Skechers stores, which carry the company's newest in-season footwear.

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Susquehanna Financial Group analysts John Shanley and Christopher Svezia say the strength of the Skechers brand is "encouraging" and predict that demand will remain strong beyond the fall 2006 shopping season. They maintain a "positive" rating for the stock.

At $22, Skechers shares (symbol SKX) trade at 18 times the average of analysts' 2006 earnings estimates of $1.20 per share, according to Thomson First Call.

--Katy Marquart