NEW YORK, NY / ACCESSWIRE / April 23, 2018 / While shares of Pinnacle foods exploded on the news that an activist hedge fund took a big stake in the company, shares of Skechers collapsed on weak guidance and a downgrade from Wedbush analysts.

RDI Initiates Coverage on:

Skechers U.S.A., Inc.
https://www.rdinvesting.com/report/?ticker=SKX

Pinnacle Foods Inc.
https://www.rdinvesting.com/report/?ticker=PF

Skechers U.S.A., Inc. shares were trading deep in the red on Friday and closed down 27.04%. The retail shoe company saw trading volume skyrocket at about 37 million shares compared to an average trading volume of almost 2.8 million shares. Skechers reported solid first quarter results but offered weak second quarter guidance last week that resulted in a downgrade from Wedbush. Wedbush analysts have downgraded the stock from "outperform" to "neutral" and lowered their price target from $46 to $34. For the first quarter Skechers reported earnings per share of 75 cents and sales of $1.25 billion. Both beat analysts' expectations as they had waited for earnings of 74 cents and sales of $1.20 billion. Despite beating on both the top and bottom line, it was guidance that didn't sit well with Wall Street. For the second quarter, Skechers is waiting for sales of $1.120 billion to around $1.145 billion and earnings per share of 38 cents to 43 cents. Analysts had been waiting for sales of $1.13 billion and earnings per share of 41 cents. Wedbush analyst Christopher Svezia wrote, "Our issue is growth at any price now seems the narrative, which significantly increases the range of outcomes on margins and earnings and adds a higher level of uncertainty in the stock. Against this, sales and gross margin comparisons do become increasingly more difficult in the second half of 2018."

Access RDI's Skechers U.S.A., Inc. Research Report at:
https://www.rdinvesting.com/report/?ticker=SKX

Pinnacle Foods Inc. shares closed up nearly 10% this past Friday as Wall Street digested the idea of a possible buyout of the company. Pinnacle shares headed higher after activist hedge fund Jana Partners LLC said that it has taken a 9.1% stake in the company. Pinnacle, which owns the Birds Eye brand, is being urged by the hedge fund to sell the company. Jana said it intends to discuss with Pinnacle's management improvements that could be made to the company's operations and ways to lower costs. Stifel analyst Christopher Growe gave his take on the news and wrote, "While we find it surprising an activist investor is approaching Pinnacle Foods, one of a handful of food companies operating at a strong level, we also believe this will stoke the takeout fire with Conagra Brands (CAG, -0.63%)as the likely buyer (these two companies talked around this time last year)." He noted as well that "the company is also executing strongly against its gross margin improvement program designed to add 300-400 basis points of gross margin expansion by 2020." Growe wrote additionally, "We believe a combination of Conagra and Pinnacle would create significant synergies and an acquisition in the $75 per share range for Pinnacle would produce upwards of 25% EPS accretion for Conagra by our estimate and including a strong rate of synergy realization."

Access RDI's Pinnacle Foods Inc. Research Report at:
https://www.rdinvesting.com/report/?ticker=PF

Our Actionable Research on Skechers U.S.A., Inc. (NYSE: SKX) and Pinnacle Foods Inc. (NYSE: PF) can be downloaded free of charge at Research Driven Investing.

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SOURCE: RDInvesting.com