Skechers Skids 25% As Q2 Guidance Rattles Investors

Shares of Skechers USA Inc SKX were hovering around six-month lows after the open Friday after the footwear retailer reported first-quarter earnings after the close Thursday.

Below-par second-quarter guidance spooked investors, with the company indicating a pushback in shipments to the second half of the year. The stock was down about 25 percent after the open Friday at $31.75. 

Q1 Tops Estimates

The company reported Q1 earnings per share of 75 cents compared to 60 cents per share one year ago.

The result was in line with the 75-cent-per-share consensus estimate.

Sales climbed 16.5 percent to $1.25 billion, with international wholesale sales rising 8.5 percent and domestic wholesale sales jumping 26.4 percent.

Analysts, on average, estimated sales of $1.2 billion.

"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," Skechers COO David Weinberg said in a statement. 

Comps in company-owned stores rose 9.5 percent, with domestic comps up 7 percent and international comps climbing 17.6 percent.

The international segment, accounting for 54 percent of Skechers' total business, is the greatest growth opportunity, the company said in the release.

Guidance Disappoints

For Q2, the company estimates EPS of 38-43 cents and sales of $1.120 billion to $1.145 billion.

The guidance trailed the consensus estimates, which calls for EPS of 54 cents on revenues of $1.16 billion.

"The estimated quarterly sales includes an expected shift in shipments from the second quarter to the back half of the year for several key international distributors and domestic accounts," Skechers said.

The guidance is at odds with the bullishness Buckingham Research expressed in a recent note.

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