Skechers posts 1Q profit on improved sales
Skechers posts 1Q profit; revenue exceeds market expectations and shares rise after hours
MANHATTAN BEACH, Calif. (AP) -- Skechers USA Inc. on Wednesday posted a profit for its first quarter on greatly improved sales.
The shoe company's profit fell short of market expectations but its revenue for the period far exceeded analyst forecasts, sending its shares up almost 3 percent in after-hours trading.
Skechers, based in Manhattan Beach, Calif., earned $6.7 million, or 13 cents per share, for the period that ended March 31. That is compared to a loss of $3.7 million, or 7 cents per share, in the same quarter last year.
The company said 8 cents were trimmed off the latest quarter's earnings per share due to a pre-tax loss of $3 million tied to foreign currency translation and a $2.5 million pre-tax credit to an account that purchased some of its excess inventory in 2011.
Revenue increased more than 28 percent to $451.6 million from $351.3 million.
Analysts polled by FactSet were expecting earnings of 17 cents per share on revenue of $442 million.
The company invested heavily in the toning shoe trend years ago and as popularity of the style faded, it was weighed down with excess inventory and slower sales. It also faced legal battles over the claims it made in its advertisements about the shoes and recently reached a $40 million settlement in a related class-action case.
Skechers said that the improved sales during the most recent quarter are an indication of increased demand for its products.
The company has since shifted its focus to new, more performance-based styles and updated other products to appeal to consumers.
Skechers said the number of pairs sold through its wholesale business increased 47 percent compared to the period a year ago. Sales in its Skechers stores open at least a year increased 12.2 percent. This last figure is considered a key indicator of a retailer's financial performance as it strips away the impact of recently opened or closed sites.
Skechers reported revenue gains from all of its segments: domestic wholesale, international wholesale, company-owned retail stores and online.
Shares of Skechers rose 59 cents in after-hours trading following the earnings report to reach $22. Its stock fell 29 cents to close regular trading at $21.41.
