(Removes reference to revenue miss in first and last paragraphs in July 19)
July 19 (Reuters) - Skechers USA Inc missed estimates for quarterly profit on Thursday, hit by a drop in sales at its domestic wholesale business and international distributor unit, sending the shoe maker’s shares down nearly 27 percent after market.
The company’s shares were trading at $24.77 after it also forecast disappointing third-quarter profit and revenue.
Skechers said it expects third-quarter sales between $1.20 billion and $1.23 billion, missing analysts’ estimate of $1.26 billion, according to Thomson Reuters I/B/E/S.
Like other big national brands, Skechers has been scaling back inventories at department stores and other retail outlets, because of their discount-heavy promotional strategies.
At the same time, Skechers has been struggling to wow shoppers with its new styles, compared with Nike and Adidas who have poured millions into sportswear innovation.
“In the U.S. they struggle to compete with the cool factor of brands like Nike and Adidas across wholesale channels where they overlap. They haven’t managed to create a cool factor around the brand,” Jane Hali & Associates’ retail analyst Jessica Ramirez said.
Skechers’ domestic wholesale business saw a 7 percent drop in sales in the reported quarter, while it fell about 6 percent at its international distributor unit due to a slowdown at a large Middle East distributor.
The company, however, said it expects both those businesses to return to growth in the second half of the year.
The Manhattan Beach, California-based company also said the recent strengthening of the U.S. dollar could continue to reduce earnings in the second half of 2018 as it did in the second quarter.
Skechers forecast profit in the range of 50 cents to 55 cents per share for the third quarter, missing estimates of 68 cents.
Same-store sales at company-owned stores was up 4.5 percent for the second quarter, missing analysts’ estimate of 5.20 percent, according to Consensus Metrix.
Net earnings attributable to Skechers fell to $45.3 million, or 29 cents per share, in the second quarter ended June 30, from $59.5 million, or 38 cents per share, a year earlier.
Excluding items, the company earned 36 cents per share, missing Wall Street estimates. (Reporting by Nivedita Balu in Bengaluru)