Skechers USA Inc. (NYSE: SKX) shares climbed 20.2% to $17.18 after the sneaker maker late Wednesday reported larger-than-anticipated second-quarter losses. Volume for the stock topped 2.7 million shares, surpassing a daily average of 1.1 million.
A news release out July 27 showed that second-quarter 2011 net sales were $434.4 million compared to $504.9 million for the second quarter of 2010. Second-quarter 2011 net loss was $29.9 million or a loss of $0.62 per diluted share based on 48,341,000 weighted average common shares outstanding compared to net earnings of $40.2 million or earnings of $0.82 per diluted share based on 49,130,000 weighted average common shares outstanding for the second quarter of 2010.
“Second-quarter results were impacted by several factors,” the release quoted COO David Weinberg as saying. “First, we were up against a record second quarter in 2010, and we aggressively reduced our excess toning inventory during the second quarter by selling two million pairs of our original Shape-ups for a loss of $21.0 million. We also recorded a $4.4 million reserve for additional product, which we believe reflects net realizable value. We made a decision to accelerate the clearance on early generation Shape-ups product in order to eliminate the overhang of excess inventory.
“We believe this will expand the sales of our new toning and performance product, which are showing positive results at retail.” Weinberg concluded.
Gross profit for the second quarter of 2011 was $143.3 million or 33%of net sales compared to $237.6 million or 47.1 percent of net sales in the second quarter of last year.
Skechers USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the Skechers name, as well as under several uniquely branded names.