Lower Skechers Profit Exceeds Analysts’ ExpectationsWednesday, October 26, 2011
Skechers USA Inc. late Wednesday said its third quarter net income fell 77 percent as the shoemaker adjusted to the end of its Tone-Up athletic shoe craze. The results were still better than Wall Street expected.
After the markets closed, the Manhattan Beach company reported net income of $8.3 million (17 cents per share), compared with $36.4 million (74 cents) in the same period a year earlier. Sales fell 25 percent to $412 million, reflecting lower demand for its higher-margin toning shoes and lower-than-expected sales for many of its other footwear lines.
Adjusted for restructuring and other one-time items, the company earned 8 cents a share. Analysts surveyed by Thomson Reuters expected adjusted per-share profit of 7 cents.
As demand for the company’s Tone-Up shoes faded, the company has worked to control costs, including reducing inventory levels and consolidating its North American distribution operations into one facility. It also has increased international sales efforts and emphasized new special edition lines linked to celebrities such as Kim Kardashian and Brooke Burke, and athletes such as elite runner Meb Keflezighi.
“Last year we were experiencing record sales growth as the leaders of an explosive new category,” Chief Executive Robert Greenberg said in a statement. “This year we are leveraging that learning – both in product development and distribution.”
Shares earlier closed up 26 cents, or 1.8 percent, to $14.23 on the New York Stock Exchange, and were up 4.7 percent in after-hours trading.