Skechers U.S.A. Inc. lost almost a third of its value after quarterly sales trailed analysts’ estimates for the first time in two years, raising concern that the shoemaker’s growth streak is waning.
While revenue rose 27 percent to $856.2 million in the third quarter, that fell short of analysts’ $876.6 million average estimate. The last time Skechers’ sales missed projections was in the quarter that ended in October 2013.
Skechers had been on a roll, with surging sales of its shoes helping the shares more than double this year. That hot streak made the miss especially disappointing for investors. Chief Operating Officer David Weinberg said in a statement Thursday that the "sluggish" economic environment in the U.S. affected domestic sales, while the dollar’s strength restrained its growth abroad. Net income rose 30 percent to $66.6 million, or 43 cents a share.
The shares tumbled 32 percent, or $14.55, to $31.64 at the close in New York, the biggest one-day decline since December 2002. The drop wiped out $2.31 billion of Skechers’ market value, which now stands at $5.02 billion.
The stock, which had traded at an average of about 27.6 times earnings during the past 12 months, is now at about 22 times profit. That’s a 5 percent premium to the Standard & Poor’s Midcap 400 Index and a 35 percent discount to Nike Inc., the world’s largest shoe seller.