Skechers USA Inc. today posted first-quarter sales that were stronger than Wall Street had predicted but in-line profits and a lower-than-expected outlook have sent the firm’s shares tumbling.
As of 4:25 p.m. ET, the casual footwear maker’s shares were down 16 percent to $35.29 in after-hours trading.
Nevertheless — boosted by steadily rising demand in international markets —Skechers posted Q1 sales of $1.3 billion, a gain of 17 percent over the comparable period and better than analysts’ bets for sales of $1.2 billion. Overall comparable store sales advanced 9.5 percent during the period.
Profits were $117.7 million, or 75 cents per diluted share, a gain of 25 percent over the prior year’s same period and in-line with forecasts.
CFO David Weinberg touted strength at the firm’s international businesses — which now represents 54 percent of the company’s total business —but also noted that the brand has been enjoying a solid reception domestically.
“During the first quarter, our North American Distribution Center experienced a record month for shipment volume, a testament to the strength in our wholesale and retail businesses in the United States and Canada,” he said in a release, noting however that the firm continues to see international as its greatest growth opportunity. “Our European Distribution Center experienced a record quarter for shipment volume, an indication of the strength of our operations in that region. Our international subsidiary and joint venture businesses are driving our growth with a combined quarterly increase of 25.7 percent.”
Looking ahead, for the second quarter of 2018, Skechers expects sales in the range of $1.120 billion to $1.145 billion, and diluted earnings per share of 38 cents to 43 cents. Analysts had expected the brand to call for diluted EPS of 57 cents. Skechers said its forecast includes a shift in shipments from the second quarter to the back half of the year for several key international distributors and domestic accounts.