Mixed Day for Footwear Stocks

Many footwear stocks were slightly in the red Thursday after major indexes opened sharply lower on signs of global economic weakening.

Shortly after the opening bell, stocks slumped on weak economic data from Europe and Asia, and in response to U.S. jobless claims that were higher than expected.

But major indexes pared their losses around midday after a better-than-expected reading from the Federal Reserve Bank of Philadelphia and statements supporting recent U.S. central-bank action from three regional Fed leaders.

A basket of industry counters tracked by Footwear News ended the day a median of 0.44 percent lower.

Comparatively, the Standard & Poor’s 500 opened with its steepest drop in a week, losing 10.9 points, or 0.7 percent, to 1,450.12. By day’s end, it had climbed back to 1,460.26, registering a slip of just 0.05 percent.

The Dow Jones Industrial Average first receded 52 points, or 0.4 percent, to 13,526 points, then pared back losses to end in the black, gaining 0.14 percent to 13,596.93 points.

Within the industry, Deckers Outdoor Corp. lost the most ground after analysts from Sterne Agee, Susquehanna Financial and Stifel Nicolaus lowered their estimates on recent price reductions of Ugg Australia product.
“Retailers just received a letter from Deckers saying that based on visibility into 2013 sheepskin prices, they are lowering prices on Ugg Classics [including the] Classic Tall, Classic Short and Bailey Button,” said Sam Poser, analyst at Sterne Agee. “Deckers may finally be reading the writing on the wall and realizing that given the extremely high level of inventory and the price resistance occurring at retail, they had to finally act to address this problem.”

Susquehanna Financial analyst Christopher Svezia added, “This adjustment mid-quarter was a surprise.”

Deckers’ stock slid 18.6 percent to close at $39.04 a share on Thursday.

Other notable losers included Iconix Brand Group Inc., which declined 4.6 percent, and Under Armour Inc., which shed 3.4 percent.

European and Asian markets had also slipped earlier, after data showed business activity in the euro zone contracted at the fastest pace since June 2009, and after HSBC Bank said Chinese manufacturing output fell to a 10-month low in September.

The Stoxx Europe 600, an index representing large-, mid- and small-cap companies across 18 countries of the European region, was down 0.15 percent; China’s Shanghai Composite slid 2.1 percent to its lowest point since Feb. 2, 2009; and Japan’s Nikkei Stock Average lost 1.6 percent.

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