Skechers USA Inc. shares are taking a tumble in after-hours trading today after the firm posted second-quarter profits that missed market watchers’ expectations.
As of 4:10 p.m. ET, the casual sneaker maker’s shares were down more than 21 percent to $26.25.
Skechers said its Q2 profits fell 24 percent year-over-year to $45.3 million, or 29 cents per diluted share, missing forecasts for earnings of 41 cents per share as growth during the period was offset by weakness in its domestic wholesale and international distributor businesses.
Sales, however, were in line with analysts’ bets — gaining 10.6 percent to $1.1 billion, driven by a 25 percent increase in the company’s international wholesale business and a 13 percent rise in company-owned global retail sales. (International wholesale and retail sales combined represented 52 percent of the company’s total sales.)
COO David Weinberg also noted that Skechers’ largest international markets — Canada, China, South Korea, Germany, India and the United Kingdom — achieved double-digit revenue growth as domestic wholesale saw a 7 percent decrease.
“[But] our core accounts remained solid,” he added. “Our international distributor business also had [a 6 percent decrease] but performed better than originally anticipated.”
Weinberg said he expects both domestic wholesale and international distributor businesses to be positive in the second half of the year.
“Our focus for the balance of 2018 is to continue to grow our international business while maintaining our strength in the United States,” he said.
Looking ahead, Skechers calls for Q3 sales in the range of $1.2 billion to $1.23 billion and diluted earnings per share of 50 cents to 55 cents.
“With the right product and marketing, we believe there is significant opportunity to further grow our brand and continue to take market share,” said CEO Robert Greenberg. “We are investing in our international business — both in newer and established markets as we continue to experience strong growth overseas. We’re looking forward to the back-to-school season and the remainder of the year as we deliver more new styles backed by impactful marketing.”
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