Shares for Skechers USA Inc. are slipping in premarket trading after the firm posted first-quarter earnings that modestly missed expectations and offered softer-than-expected guidance for the fiscal year.
As of 9 a.m. ET, the stock was in the red more than 13% to $30.65.
The casual sneaker-maker said its sales during the period ended March 31 improved 2.1% to $2.28 billion, just shy of the $2.3 billion market watchers predicted.
Profits, meanwhile, fell 8% year over year to $108.8 million, or 71 cents per share, missing analysts’ expectations for earnings of 72 cents per share.
Nevertheless, Skechers COO David Weinberg touted ongoing strength in the firm’s international business — which grew 15 percent on a constant-currency basis in Q1 — as a bright spot during the period. He also pointed out that the brand was up against tough year-over-year comparisons as well as an Easter timing shift. (International has recently grown to account for more than half of the company’s overall sales.)
“Achieving a new quarterly sales record, especially given our record first quarter last year, which also had the benefit of Easter and positive currency, is a noteworthy accomplishment,” Weinberg said in a statement. “In the quarter, we also shipped a record number of pairs from our distribution centers in Japan and Europe, and we saw strong growth within our international distributors and joint ventures, including China.”
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Weinberg added that the brand continues to place a larger focus on building its international business — converting its joint venture in India to a wholly owned subsidiary during the period and finalizing a joint venture agreement with its distribution partner in Mexico this month.
“We expect these investments to be accretive in 2019, and for international, which now stands at 57.8 percent of our total business, to continue to drive growth,” he noted.
For the second quarter of 2019, Skechers expects sales in the range of $1.2 billion to $1.23 billion, and diluted earnings per share of 30 cents to 35 cents. Analysts had expected the company to forecast EPS of 39 cents on sales of $1.23 billion.
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