Image Source: Pixabay

The 2024 Q2 earnings season has been positive so far, with results reflecting resilience. Earnings growth is on pace to be positive again, with the trend expected to continue in the coming periods

The Tech sector has been a big contributor, similar to what we’ve seen in previous quarters. Several companies have reported margin expansion, which has provided higher profitability

Deckers Outdoor (DECK - Free Report), Kimberly-Clark (KMB - Free Report), and Skechers (SKX - Free Report) all posted higher margins. All three sport a favorable Zacks Rank, reflecting bullishness among analysts.

Kimberly-Clark Boasts Defensive Nature
 

KMB shares carry a defensive nature thanks to their placement in the consumer staples sector, as these companies’ products have an advantageous ability to generate consistent demand in the face of many economic situations.

The stock sports a Zacks Rank #2 (Buy), with earnings expectations for its current fiscal year drifting notably higher over the last month following its recent guidance upgrade.

Cost management practices have aided the company’s profitability in a big way, with adjusted EPS of $1.96 throughout its latest quarter seeing a 20% climb year-over-year. Margin expansion has also kept investors happy, as we can see illustrated below.

Please keep in mind that the chart below is on a trailing twelve-month basis.

Image Source: Zacks Investment Research

Deckers Outdoor Enjoys Brand Momentum
 

Continued brand momentum among UGG and Hoka shoes aided the company’s latest set of robust results again, leading the company to up its current fiscal year outlook.

Analysts have updated their outlook for the company’s current fiscal year accordingly following the print, with the $31.52 Zacks Consensus EPS estimate suggesting 8% growth year-over-year.

The company has also been enjoying margin expansion for some time, aiding its profitability picture nicely. And it enjoyed the same throughout its latest release, with its gross margin expanding to 56.9% vs 51.3% in the year-ago period.

Please note that the chart below is on a trailing twelve-month basis.

Image Source: Zacks Investment Research

Skechers Posts Record Sales
 

Skechers didn’t see the same positive reaction to its quarterly release, with the company seeing a 7% EPS decline on a 7% sales increase. Both items missed relative to Zacks Consensus estimates, snapping a long streak of positive surprises.

Still, sales of $2.2 billion reflected a quarterly record, with its Direct-to-Consumer (DTC) sales improving an impressive 9.2% year-over-year. The DTC sales growth is undoubtedly positive, reflective of a healthy market position.

Like DECK, Skechers enjoyed margin expansion throughout the period thanks to lower freight and lower costs per unit, reporting a gross margin improvement of 220 basis points to 54.9%. The company’s margins have been historically strong, as illustrated below.

Positive revisions for its current fiscal year hit the tape following the print, with the stock carrying a favorable Zacks Rank #2 (Buy).

Image Source: Zacks Investment Research

Bottom Line
 

Several companies have enjoyed higher profitability throughout the Q2 earnings season, including Deckers Outdoor, Kimberly-Clark, and Skechers.

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