Skechers (SKX) Stock off -15 Percent After Disappointing 2Q Earnings Results
Shares of Skechers USA Inc. (SKX) were trading down -4.93 or -15.32 percent to $27.25 in Friday’s premarket after the company reported second quarter earnings that failed to meet analyst expectations yesterday after the market close. Skechers stock closed at $32.18 per share, down -0.10 or -0.31 percent in Thursday’s regular trading session.
Based in Manhattan Beach, California, Skechers Inc. was founded in 1992 by former LA Gear founder and Chief Executive, Robert Greenburg and his son Michael.
For the company’s fiscal second quarter, Skechers reported net earnings of $74.1 million or $0.48 per diluted share compared with $79.8 million or $0.52 per share in the same period one year ago. Revenue for the quarter came to $877.8 million versus $800.5 million in 2015’s second quarter. Analysts expected the company to report $0.52 per share on revenue of $888.9 million.
Skechers reported a gross profit of $416.3 million or 47.4 percent of net sales. Earnings from operations were $100.4 million or 11.4 percent of net sales. This compares to $112.3 million or 14 percent of net sales for 2015’s second quarter.
Skechers’ Chief Operating and Financial Officer, David Weinberg told a conference after the earnings release that, “International wholesale continues to be a key growth driver for Skechers and now represents 34.6% of our total sales in the quarter and 39% for the first six months. Combined with international Company-owned retail stores, it represents 41.9% and 45% respectively, bringing it close to our short-term goal of international representing 50% of our total business. We believe there is a tremendous opportunity to continue to grow the Skechers brand around the world as we build our presence through market, retail expansion and gaining shelf space within our wholesale accounts.”
Diluted earnings per share were negatively impacted in the quarter by several factors that included foreign currency translation and exchange losses of $8.3 million, or $0.05 per diluted share. Also, the company had additional VAT taxes of $2.7 million in Brazil and a fire at Skechers’ warehouse in Malaysia resulting in a pretax loss of approximately -$0.9 million, which impacted diluted earnings per share for another -$0.02.
Skechers’ company owned stores reported a retail sales increase of +15.4 percent in the quarter, with a +35 percent increase for the company’s international subsidiary and a +41 percent increase for internationally owned company stores. Skechers stock has fallen significantly since trading over $53.00 per share in August of 2015. With today’s losses, which have increased in todays premarket, the stock is only a few points from its yearly low of $24.56.
Other News About SKX
Adidas sues Skechers, claiming 'Springblade' shoe knockoff
Adidas claims that Skechers’ “Mega Flex” shoe is a knock off of its “Springblade” design.
Skechers Wins a Decisive ITC Ruling Over Nike
Skechers beat Nike’s Converse unit in court over claims of trademark infringement.
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