The 2024 Q2 earnings season has been positive, indicating resilience and predicting continued growth. The Tech sector, a consistent powerhouse, once more takes the stage, contributing significantly to this trend.
Margin expansion has been the catalyst, fueling higher profitability for numerous companies.
Kick Back with Kimberly-Clark
Known for its defensive play in the consumer staples sector, Kimberly-Clark (KMB) shines with a Zacks Rank #2 (Buy). This sector’s products boast a unique ability to muster steady demand across various economic conditions.
The company’s smart cost management strategies are paying off, with a solid 20% year-over-year rise in adjusted EPS to $1.96 in the latest quarter. Margin expansion further sweetens the deal, as depicted below.
Below chart reflects the trailing twelve-month basis.
Image Source: Zacks Investment Research
Stepping Out with Deckers Outdoor
Deckers Outdoor (DECK) continues its winning streak with strong brand momentum, notably from UGG and Hoka shoes, propelling its fiscal year outlook higher. Analysts anticipate an 8% year-over-year growth, with a positive Zacks Consensus EPS estimate of $31.52.
Consistent margin expansion has been a key driver of profitability for Deckers Outdoor, a trend upheld in the latest release, evident from the expansion of its gross margin to 56.9%, compared to 51.3% in the preceding year.
Below chart shows the trailing twelve-month basis.
Image Source: Zacks Investment Research
Sprinting Forward with Skechers
Skechers (SKX) faced a minor stumble in its latest quarterly performance, witnessing a 7% decline in EPS despite a 7% increase in sales. While missing Zacks Consensus estimates, it still marked a quarterly record with sales hitting $2.2 billion.
The company’s Direct-to-Consumer (DTC) sales painted a brighter picture, climbing a notable 9.2% year-over-year. Margins, a stronghold for Skechers, expanded due to operational efficiencies, showing a gross margin improvement to 54.9%.
The upward revisions for its current fiscal year highlight investor confidence, supported by a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In Conclusion
Amidst the Q2 earnings deluge, profit magnates like Deckers Outdoor (DECK), Kimberly-Clark (KMB), and Skechers (SKX) stand tall, showcasing boosted profitability.
Interested in profitable investments beyond these companies? Zacks dives into the vast potential of hydrogen energy, projecting a market worth $500 billion by 2030. With historical data backing it up, this could be an insightful move for wise investors seeking growth opportunities in the market.
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