But the company has resisted the temptation of signing big-name pros to hawk its products, nor has it expanded in any meaningful way into the apparel market.

"Our game plan is not to be everything to everybody," Nichols said.

Although he characterizes K-Swiss shoes as high-end, pointing out that they aren't sold in middle-market retail stores like Big Five or Sears, his core consumers come from the urban youth of both the East Coast and West Coast. Those customers have until recently tended to buy thick-soled athletic shoes, but are apparently after a new look.

"The direction is changing, and K-Swiss is moving in," said Merrill Lynch & Co. analyst Brenda Gall. "We'll see how successful they are."

The company is also trying to expand its overseas base, having recently reorganized its European operations and branched into India, moves it can afford to make because it has almost no debt and $70 million of cash on hand. And although fourth-quarter earnings are expected to be much lower than the year-ago quarterly earnings, analysts said the numbers might be a bit better than expected.

The mean consensus estimate is for fourth-quarter earnings to come in at 26 cents per share, compared with 44 cents a year ago, but analyst Shanley expects an EPS of 29 cents and Gall is projecting 30 cents. Shanley said that while the holiday season was hardly a barn-burner for the overall apparel industry, athletic shoes in general and K-Swiss shoes in particular sold relatively well.

Where the two analysts differ, however, is on their recommendations on the stock. Shanley has a "buy" rating on the stock and sees the recent pullback from $28 to $20 a share as a significant buying opportunity, with a 12-month target price of $30 a share. Gall has a "neutral" rating on the stock, and while long term thinks it's a good investment, she isn't comfortable touting it just yet.

"They have some tough (year-on-year) comparisons until after the first quarter, then it gets easier," she said. "It gets much easier after the second quarter. But I like the management. I think they've done a good job."


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