Skechers shares rise on upbeat outlook
MANHATTAN BEACH, Calif. (AP) — Shoe designer and retailer Skechers USA Inc. said Wednesday that its net income rose 39 percent as revenue from its wholesale division and its own stores grew.
Results missed expectations, but the company gave an upbeat outlook and shares rose 9 percent in aftermarket trading.
Skechers grew in popularity as casual sports shoes were fashionable, but as demand for that category has faded, it has introduced new, more athletic-oriented shoes. During the quarter marathon runner Meb Keflezighi wore its new GOrun running shoes to compete in the 2012 London Olympics. The American finished fourth.
Skechers added that new products have garnered a positive response and predicted all of its operating divisions would be up in the mid-double digits in the fourth quarter.
Net income for the three months ended Sept. 30 rose to $11.6 million, or 22 cents per share, from $8.4 million, or 17 cents per share, last year. Revenue rose 4 percent to $429.4 million from $412.2 million last year. The company said sales improved at its U.S. wholesale division, which sells products to stores, its own retail stores, and its international distributor business.
The only area that revenue didn't rise was in its international division, which the company said was hurt by the "very challenging" economic retail environment in Europe and the euro exchange rate, as well as declining toning sales in comparison to the prior-year period.
"However, we are now seeing an overall positive trend within our largest international subsidiaries," said David Weinberg, chief operating officer and chief financial officer of the Manhattan Beach, Calif., company.
Analysts had expected profit of 26 cents per share on revenue of $427.7 million, according to FactSet.
"The combination of our recent growth, the coming holiday season, and the reaction to our new product divisions, gives us confidence that Skechers is experiencing a resurgence on a global basis and we are on target to continue to grow profitably in 2013," Weinberg added.
Shares rose $1.54 to $18.15 during aftermarket trading, having closed the regular session at $16.61 before the report.