Skechers U.S.A., Inc. (NYSE: SKX)
A class action has been commenced on behalf of purchasers of Skechers U.S.A., Inc. (NYSE: SKX) stock during the period between April 23, 2015 and October 22, 2015 (the “Class Period”).
The complaint charges Skechers and certain of its officers with violations of the Securities Exchange Act of 1934. Skechers designs, develops and markets footwear for men, women and children. From 2013 through 2015, Skechers’ Domestic Wholesale reporting segment, which includes department stores, athletic footwear retailers and specialty shoe stores, was the Company’s primary driver of growth, accounting for higher net sales than its other two reporting segments. For example, during 2015, the Domestic Wholesale segment accounted for approximately 39% of Skechers’ total nets sales.
The complaint alleges that during the Class Period, defendants repeatedly touted the strength of customer demand within the Domestic Wholesale segment, which they claimed would spur continued sales growth, frequently emphasizing that Skechers’ Domestic Wholesale segment growth would continue into the second half of 2015 based on pending orders and meetings with key customers. However, defendants’ Class Period statements pertaining to customer demand in the back-half of 2015, and the sales growth related thereto, were materially false and misleading because defendants failed to disclose that the Company’s Domestic Wholesale customers had taken early receipt of fall 2015 inventory, causing them to delay receipt of and, in some cases, cancel pending orders scheduled for delivery in the second half of 2015. As a consequence, the Company’s Domestic Wholesale growth rate was unsustainable. As a result of defendants’ false statements and omissions, Skechers common stock traded at artificially inflated prices during the Class Period, reaching highs of more than $50 per share.
The Company’s slowing sales growth was revealed after the market closed on October 22, 2015, when Skechers issued a press release announcing its financial results for the third quarter ended September 30, 2015, which included disappointing net sales that fell short of analysts’ consensus estimates. According to defendants, $20 million in net sales had shifted from the third quarter of 2015 into the second quarter of 2015 due to early customer deliveries. Defendants blamed the sales miss on the Company’s inability to make up this shortfall due to a weaker-than-expected retail environment in the third quarter of 2015. On news of the Company’s disappointing net sales and diluted earnings per share, Skechers common stock fell $14.55 per share, or more than 31%, to close at $31.64 per share on October 23, 2015.
If you are a current shareholder and purchased stock between April 23, 2015 and October 22, 2015 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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