Shares of surf wear and sunglasses merchant
were under pressure Friday after the company lowered guidance for the fourth quarter to reflect weaker-than-expected sunglasses sales and a charge for restructuring its European operations.
The Foothill Ranch, Calif.-based company said it now expects fourth-quarter sales to grow about 11% to $100 million, with earnings of break-even to a penny a share. Excluding the charge, Oakley said it would earn 3 cents a share, compared with a profit of 5 cents a share in the year-ago period. In October, Oakley projected fourth-quarter earnings of 10 cents a share, with sales rising 20% to 22% to $108 million to $110 million. Wall Street analysts were projecting the company would earn 10 cents a share on revenue of $108.5 million, according to Thomson Financial/First Call.
In late trading, the shares were down $2.18, or 17.7%, at $10.11 on the
New York Stock Exchange.
The company cited several factors that contributed to the weakness. First, soft consumer spending and challenging retail conditions have persisted and have affected its sunglasses sales more than originally anticipated. Second, deliveries of newly launched sunglasses models were delayed. Last, sneaker store chain Foot Locker said it plans to reduce the number of locations that carry Oakley sunglasses at the end of the year.