Shares in K-Swiss Inc. fell nearly 6 percent Thursday after the company warned investors that its third quarter and annual guidance will not meet expectations due to lower demand and investments in international expansion.

The Westlake Village-based shoe and apparel maker said it now expects third quarter earnings of 28 cents to 38 cents per share on revenue of $113 million to $123 million. Analysts polled by Thomson Financial expected profit of 42 cents per share on sales of $122 million.

For the year, K-Swiss said it expects profit of $1.10 to $1.25 per share on revenue of $410 million to $430 million. Analysts forecast profit of $1.37 per share on revenue of $434 million for 2007.

K-Swiss said it expects “significant” declines in domestic revenue and “substantial” investments in product development and marketing. The company also plans continued expansion of international operations and will continue to invest in its Royal Elastics brand.

Shares in K-Swiss fell $1.45, or 5.5 percent, to $24.95 during afternoon trading on the Nasdaq.