Thursday, February 22, 2007

K-Swiss Sales Continue to Tank

I've been procrastinating like a pro all week, but I GOTTA get some work done today so I'm just gonna do a quick analysis of K-Swiss's fourth-quarter results, which it reported today. If you yourself are looking for ways not to work today, check out my sister site, ChicksWithKicks, where I posted up a couple things yesterday as did my mighty partner, Samia.

So, K-Swiss....

The brand's fourth-quarter sales in the United States were way down, but if you inculde in its international sales, overall sales were up 1.7%. The amount of money that K-Swiss earned compared to the same period last year, however, was down.

I've said it before when doing this analysis and I'll say it again, when it comes to how a stock moves, a lot depends on what the company reported versus what Wall Street THOUGHT it would report. In the case of its sales and earnings, Wall Street was okay, hunky dorey with K-Swiss's results. Happy even.

But then K-Swiss dropped the bomb on Wall Street that came in the form of how much the money the company expects it will stacking over the next six months. Worldwide orders for its shoes are down over 22 percent, but as grim as that number looks, Wall Street could have dealt with it if it was in line with its own predictions. Unfortunately for K-Swiss, its outlook for future sales and earnings was waaaay below what Wall Street was hoping for and because of that, as we speak, K-Swiss's stock is doing a full-on tank.

I think what is happening is that the brand didn't grow as fast internationally in its fourth-quarter as it has in prior quarters and thus, what it made overseas wasn't enough to cover the sales its been hemorrhaging in the United States for stubbornly sticking with an all-white classic play book for far too long.

It's funny cause at the WSA, every time I passed the K-Swiss booth, there were a ton of people milling in and around the entrance, much more so than some competing brands. And that should be a lesson for anyone who visits these trade shows and likes to make predictions on a brand's health based on the number of people they see in the booth. Buzz doesn't necessarily mean sales are following behind.

1 comment:

Anonymous said...

That bites, but those K-Swiss x Logan Hicks X Evil Monito were really nice.