Skechers Sinks on Poor Profit

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Shares in Skechers USA Inc. dropped more than 20 percent Tuesday after the company reported poor earnings hit by the rollout costs of a new line of shoes.


Skechers reported second quarter net income of $15 million (32 cents per share), a 15 percent drop from $18 million (40 cents) for the same period a year earlier, falling well short of analysts’ expectations of 43 cents per share, according to a poll performed by Thomson Financial.


Skechers blamed a portion of the dip in profits on increased cost associated with sales support, roll-out, inventory and launch costs associated with its Cali Gear by Skechers shoe line.


Sales for the Manhattan Beach-based shoe and apparel company rose 21 percent to $352 million, which beat Wall Street’s expectations of $350 million.


Shares in Skechers closed down $1.56, or 5.2 percent, to $28.33 and continued to slip another $4.83, or another 17 percent, to $23.50 in after-hours trading Tuesday on the New York Stock Exchange.

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