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Friday, Sep 22, 2023

Slowing Tone-up Shoe Sales Hurt Skecher’s First Quarter

Shares of Skechers USA Inc. fell in after-hours trading Wednesday after the shoemaker reported a smaller first-quarter profit on slower sales of its once trendy Tone-up shoes, and warned that the current quarter might also be challenging.

After the markets closed, the Manhattan Beach company reported net income of $11.8 million (24 cents a share), compared with net income of $56.3 million ($1.15) a year earlier. Sales fell 3 percent to $476 million. Analysts surveyed by Thomson Reuters on average were expecting per-share profit of 30 cents on revenue of $465 million.

The athletic toning shoes feature rounded, thick soles that force the wearer to work harder while walking. Skechers said that to reduce inventory it was discounting prices for the line, which has suffered from adverse publicity about the products’ effectiveness as well as increased competition from other shoemakers. The company does plan to introduce new styles to revitalize the line and its other casual shoes.

“We believe the toning market is stabilizing as we continue to clear inventory and deliver fresh fitness styles,” said Chief Financial Officer David Weinberg in a statement. “We do expect a difficult comparison to continue as we are again against a record second quarter 2010, especially given international sales are historically stronger in the first quarter.”

Shares earlier closed up 10 cents, or less than 1 percent, to $20.57 on the New York Stock Exchange. They fell 5 percent in after-market trading.

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