Skechers Misses Wall Street’s Forecasts Again in Q3
Sheena Butler-Young
Deputy Editor
Skechers USA Inc.’s shares were in the red in after-market trading today, with the brand reporting third-quarter results that were less than analysts had predicted.
The Manhattan Beach, Calif.-based brand said its Q3 net income slipped 2.2 percent year-over-year, to $65.1 million, or 42 cents per diluted share — missing market watchers’ forecasts for diluted EPS of 47 cents. Skechers said its Q3 diluted EPS were negatively impacted by foreign currency translation and exchange losses of $8.1 million, 4 cents per diluted share.
Revenues advanced 10 percent year-over-year, to $942.4 million, but missed analysts’ estimates for revenues of $954.4 million.
Skechers COO and CFO David Weinberg attributed most of the sales growth in the quarter to an 18.3 percent rise in the brand’s international wholesale business. Skechers’ finance chief said the company will continue to look to international — which now comprises 40.1 percent of total sales, or 47.9 percent including international retail — as the main growth driver in the future.
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“We believe the domestic market remains challenging and is continuing to adjust to the changing retail landscape with retailers managing inventory with more caution and ordering much closer to season,” Weinberg added. “We believe the decrease in our wholesale business in the United States will continue in the fourth quarter, but are cautiously optimistic about the first quarter.”
For the fourth quarter of 2016, Skechers expects net sales in the range of $710 million and $735 million, assuming single-digit increases and comps in its international wholesale business and total retail business, respectively, as well as a single-digit decrease in its domestic wholesale business.
As of 4:38 p.m. ET, Skechers’ shares had slid nearly 14 percent, to $22.94.
Following multiple quarters of consistent earnings beats, Skechers also missed estimates in the second quarter, reported in July.
