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Sketchers shares extend declines after sales, earnings forecast misses estimates

The shares of the company tumbled in extended trading yesterday on the news
Back on running shoe
Footwear maker had 'some positives' in first-quarter earnings report

Shares of Sketchers U.S.A. Inc. (NYSE:SKX) extended their declines after plunging in post-market trading yesterday as the company forecast second-quarter sales and earnings below analysts’ estimates.

The stock fell 27% to US$30.70 at 10:08 a.m.

That extends a drop of as much as 19% yesterday after the market close when Sketchers said it expects second-quarter sales in the range of US$1.12bln to US$1.145bln, and diluted earnings per share of US$0.38 to US$0.40. That was lower than consensus estimates of US$1.16bln in revenue and US$0.54 per share, according to Zachs.

Still, the footwear company did post gains in earnings and revenue in the first quarter. Net income rose 25% to US$117.7mln, or US$0.75 a share, from US$94mln, or US$0.60 a share, a year earlier. That matched estimates of US$0.75 a share from analysts polled at Sales climbed 17% to US$1.25mln.

Wedbush analyst Christopher Svezia cuts his rating on the stock to Neutral from Outperform following the earnings report, reported, citing a research note. He also reduced his share-price target to US$34.00 from US$46.00, saying that while there are "some positives" in the results, there are still inefficiences in Sketchers global supply chain.

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