Lifestyle footwear maker Skechers USA Inc. (SKX) said late Wednesday that its profit marginally declined in the second quarter, as higher expenses offset higher margins and an increase in quarterly revenues, which were boosted by strong international sales. Earnings per share for the quarter declined by a penny and also missed analysts' estimate by three cents.
The company also provided earnings and revenue guidance for the third quarter, which was below consensus. Following the announcement, the company's stock was down over 13% in Wednesday's after hours trading.
The Manhattan Beach, California-based company reported second quarter net earnings of $14.64 million or $0.31 per share, marginally lower than $14.95 million or $0.32 per share in the prior-year quarter.
On average, five analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.34 per share for the second quarter.
Net sales for the quarter marginally increased to $354.6 million from $352.2 million in the same quarter last year, but missed consensus estimate of $360.34 million. Royalty income dropped to $0.23 million from $1.19 million in the comparable quarter a year ago.
Gross profit for the second quarter was $157.2 million or 44.3% of net sales, higher than $152.0 million or 43.2% of net sales, in the prior-year quarter. Total operating expenses was $137.45 million, higher than $131.42 million in the year-ago quarter.
Commenting on the results, chief financial officer Fred Schneider said, "We are especially pleased with our continued strong international sales, and believe that we will continue to see growth in key areas around the world. While we did not experience domestic wholesale growth in the quarter, Skechers wholesale sales in the U.S. were slightly better than anticipated, which we feel is meaningful given the very soft retail environment.
The company noted that its company-owned retail business has also been impacted by the weak domestic economy, with sales essentially flat on an increased store base. The company added that it's profitability is also in line with expectations, and the balance sheet remains extremely strong, allowing it to continue to execute growth plans both domestically and internationally.
For the half-yearly period, the company reported second quarter net earnings of $47.49 million or $1.02 per share, higher than $38.85 million or $0.84 per share in the prior-year period.
Net sales for the six-month period increased 6.1% to $739.50 million from $697.11 million in the same period last year.
Looking ahead to the third quarter, the company now expects earnings of $0.57 to $0.65 per share, on net sales between $425 million and $440 million, which was forecast below analysts' earnings expectations of $0.66 per share and revenue anticipation of $447.24 million.
SKX closed Wednesday's regular trading session at $23.74, up $0.43 or 1.84% on a volume of 1.57 million shares. However, in the after hours, the stock plunged $3.14 or 13.23% to $20.60.
For comments and feedback: editorial@rttnews.com