Skechers Cuts Earnings Forecast

Skechers USA Inc. said Thursday it expects fourth-quarter results to be “significantly” below prior forecasts.

Like many other footwear players, the Manhattan Beach, Calif.-based company said the economic crisis is hampering performance. Skechers is now forecasting a loss of 45 cents to 50 cents a share, on sales in the range of $290 million to $300 million. The company had previously predicted a profit of 15 cents to 23 cents.

Skechers said the shortfall in earnings can be attributed to a decrease in gross margin of approximately 1,000 basis points from the same period last year. The company said sales were negatively impacted by the poor results at many U.S. retailers, in addition to store closings and bankruptcies. Looking ahead, the firm expects 2009 buying plans for many key retail partners to be down anywhere from 7 percent to 20 percent across all merchandise categories.

“The global economic environment has resulted in a far more substantial impact to consumer demand than we had previously anticipated,” Skechers COO David Weinberg said in a statement. “Despite the economic challenges, we remain confident that Skechers is well-positioned. … Furthermore, our balance sheet and liquidity remains very strong.”

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