Fossil Group (NASDAQ: FOSL) and Skechers U.S.A. (NYSE:SKX) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitabiliy, risk, valuation, institutional ownership and dividends.

Valuation & Earnings

This table compares Fossil Group and Skechers U.S.A.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fossil Group $2.96 billion 0.16 $210.54 million $0.51 19.45
Skechers U.S.A. $3.67 billion 1.24 $440.41 million $1.54 18.73

Skechers U.S.A. has higher revenue and earnings than Fossil Group. Skechers U.S.A. is trading at a lower price-to-earnings ratio than Fossil Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.2% of Fossil Group shares are held by institutional investors. Comparatively, 65.6% of Skechers U.S.A. shares are held by institutional investors. 12.8% of Fossil Group shares are held by company insiders. Comparatively, 21.7% of Skechers U.S.A. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Fossil Group has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Skechers U.S.A. has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Fossil Group and Skechers U.S.A., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fossil Group 3 10 2 0 1.93
Skechers U.S.A. 1 4 7 0 2.50

Fossil Group currently has a consensus price target of $19.58, indicating a potential upside of 97.41%. Skechers U.S.A. has a consensus price target of $29.73, indicating a potential upside of 3.04%. Given Fossil Group’s higher probable upside, research analysts clearly believe Fossil Group is more favorable than Skechers U.S.A..

Profitability

This table compares Fossil Group and Skechers U.S.A.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fossil Group 0.84% 7.59% 3.41%
Skechers U.S.A. 6.56% 14.20% 10.30%

Summary

Skechers U.S.A. beats Fossil Group on 10 of the 14 factors compared between the two stocks.

Fossil Group Company Profile

Fossil Group, Inc. is a design, marketing and distribution company that specializes in consumer fashion accessories. The Company’s segments include Americas, Europe and Asia. Each segment includes sales to wholesale and distributor customers, and sales through the Company-owned retail stores and e-commerce activities based on the location of the selling entity. The Americas segment includes sales to customers based in Canada, Latin America and the United States. The Europe segment includes sales to customers based in European countries, the Middle East and Africa. The Asia segment includes sales to customers based in Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. The Company’s principal offerings include a line of men’s and women’s fashion watches and jewelry, handbags, small leather goods, belts, sunglasses and soft accessories.

Skechers U.S.A. Company Profile

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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